# Comprehensive Problem 2: Palisade Creek Co.## OverviewPalisade Creek Co. is a merchandising business using the perpetual inventory system. The figures listed are account balances for the business as of May 1, 2017.### Account Balances- **Cash**: $89,260- **Accounts Receivable**: $265,473- **Merchandise Inventory**: $632,000- **Prepaid Insurance**: $14,800- **Store Supplies**: $9,150- **Store Equipment**: $569,000- **Accumulated Depreciation – Store Equipment**: $56,700- **Accounts Payable**: $53,250- **Customer Refunds Payable**: $18,000- **Lynn Tolley, Capital, June 1, 2016**: $635,300- **Lynn Tolley, Drawing**: $135,000- **Sales**: $3,216,000- **Cost of Merchandise Sold**: $2,873,000### Expenses- **520 Sales Salaries Expense**: $664,800- **521 Advertising Expense**: $281,000- **522 Depreciation Expense**: —- **523 Store Supplies Expense**: —- **529 Miscellaneous Selling Expense**: $12,600- **530 Office Salaries Expense**: $382,100- **531 Rent Expense**: $83,700- **532 Insurance Expense**: —- **539 Miscellaneous Administrative Expense**: $7,800## Unadjusted Trial Balance: May 31, 2017The trial balance provides a summary of all debit and credit accounts before adjustments. Leave entries blank if unnecessary.### Debit Balances- Cash: $89,260- Accounts Receivable: $265,473- Merchandise Inventory: $585,200- Prepaid Insurance: $11,800- Store Supplies: $10,100- Store Equipment: $569,100- **Total Debits**: $1,531,933### Credit Balances- Accumulated Depreciation—Store Equipment: $56,700- Accounts Payable: $45,250- Customer Refunds Payable: $6,150- **Total Credits** **Comprehensive Problem 2****Part B:**You must complete parts 1, 2, 3, 4, 6, and 7 before attempting to complete part B.Note: Part 5 is optional.1. **Prepare an income statement.** **Palisade Creek Co.** **Income Statement** **For the Year Ended May 31, 2017** - **Revenue:** - Net sales: $3,126,250 - Cost of merchandise sold: $3,029,850 - Gross profit: $2,899,255 - **Expenses:** - Selling expenses: - Sales salaries expense: $277,800 - Advertising expense: $50,000 - Depreciation expense: $14,000 - Store supplies expense: $9,800 - Miscellaneous selling expense: $12,600 - Total selling expenses: $1,095,200 - **Administrative expenses:** - Office salaries expense: $417,700 - Rent expense: $88,900 - Depreciation expense: $12,000 - Insurance expense: $7,800 - Total administrative expenses: $526,400 - Total expenses: $1,621,600 - Net Income: $1,582,4002. **Prepare a statement of owner's equity.** **Palisade Creek Co.** **Statement of Owner's Equity** **For the Year Ended May 31, 2017** - Lynn Tolley, capital, June 1, 2016: $685,300 - Net income for the year: $135,000 - Withdrawals: - Increase in owner’s equity: - Lynn Tolley, capital, May 31, 2017:3. **Prepare a balance sheet.** **Palisade Creek Co.** **Balance Sheet** **May 31, 2017** **Assets:** - Current assets: - Accounts receivable: $245,875 - Merchandise inventory: - Store supplies: $4,000 - Total current assets: - Property, plant, and equipment: - Store equipment: $569,500

Name: # Comprehensive Problem 2: Palisade Creek Co.## OverviewPalisade Cree
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: # Comprehensive Problem 2: Palisade Creek Co.## OverviewPalisade Creek Co. is a merchandising business using the perpetual inventory system. The figures listed are account balances for the business as of May 1, 2017.### Account Balances- **Cash**: $

Trial balance means the statement prepared from ledger account where all debit and credit balance are recorded and trial balance always match because of double entry system of accounting. For preparing the trial balance , we need to make some journal entries and prepared ledgers. PALISADE CREEK CO. UNADJUSTED TRIAL BALANCE MAY 31 , 20Y7 Particulars Debit Balances Credit Balances Cash 83,600 - Account receivables 233,900 - Merchandise Inventory 652,400 - Prepaid insurance 16,800 - Store Supplies 11,400 - Store Equipment 569,500 - Acc. Depreciation – Store Equipment - 56,700 Account Payable - 96,600 Customer Refunds payable - 50,000 Salaries payable - - Lyon Tolley , Capital , June 1 , 20Y6 - 685,300 Lyon Tolley , Drawings 135,000 - Sales - 5,069,000 Cost of merchandise sold 2,823,000 - Sales salaries expenses 664,800 - Advertising expenses 281,000 - Depreciation expenses - - Store Supplies expenses - - Miscellaneous selling expenses 12,600 - Office salaries expenses 382,100 - Rent Expenses 83,700 - Insurance expenses - - Misc. Administrative expenses 7,800 - TOTAL 5,957,600 5,957,600