Comprehensive Problem 2Transactions:May 1 Paid rent for May, $5,000.May 2 Sold merchandise on account to Korman Co., terms n/15, FOB shipping point, $68,500. The cost ofthe goods sold was $41,000.May 3 Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.May 4 Paid freight on purchase of May 3, $600.May 10 Sold merchandise with a list price of $61,500 to customers who used VISA and who redeemed$7,500 of point-of-sale coupons. The cost of the goods sold was 32,000.May 13 Paid for merchandise purchased on May 3.May 15 Paid advertising expense for last half of May, $11,000.May 17 Received cash from sale of May 2.May 20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 2. The costof the returned merchandise was $8,000.May 21 Sold merchandise on account to Crescent Co., terms n/eom, FOB shipping point, $110,000. Thecost of the goods sold was $70,000.May 21 For the convenience of Crescent Co., paid freight on sale of May 21, $2,300.May 21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.May 24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.May 28 Paid sales salaries of $56,000 and office salaries of $29,000.May 29 Purchased store supplies for cash, $2,400.May 31 Received cash from sale of May 21 plus freight.May 31 Paid for purchase of May 21, less return of May 24.Required:1. Journalize the transactions for May, the last month of the fiscal year.2. Post the journal entries to the general ledger.3. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet usingthe following adjustment dataAt the end of May, the following adjustment data were assembled:Item Description Amounta Physcial inventory count on May 31 $ 295,000b Insurance expired during the year 12,000c Store supplies on hand on May 31 4,000d Depreciation for the current year 14,000e Accrued salaries on May 31:Sales salaries $ 7,000Office salaries 6,600Total 13,600f The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold.4. Journalize the adjusting entries. Post the adjusting entries to the general Ledger5. Prepare a multiple-step income statement.6. Prepare a statement of stockholders’ equity. Assume that additional common stock of $10,000 was issued in January 20Y6.7. Prepare a balance sheet.8. Journalize the closing entries. Then post the closing entries to the general ledger .9. Prepare a post-closing trial balance. GENERAL LEDGERACCOUNT: Cash ACCOUNT NO: 110POST BALANCEDATE ITEM REF. DEBIT CREDIT DEBIT CREDIT20Y6May 1 Balance Ö 83,600.00ACCOUNT: Accounts Receivable ACCOUNT NO: 112POST BALANCEDATE ITEM REF. DEBIT CREDIT DEBIT CREDIT20Y6May 1 Balance Ö 33,900.00

Comprehensive Problem 2Transactions:May 1 Paid rent for May, $5,000.May 2 Sold merchandise on account to Korman Co., terms n/15, FOB shipping point, $68,500. The cost ofthe goods sold was $41,000.May 3 Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.May 4 Paid freight on purchase of May 3, $600.May 10 Sold merchandise with a list price of $61,500 to customers who used VISA and who redeemed$7,500 of point-of-sale coupons. The cost of the goods sold was 32,000.May 13 Paid for merchandise purchased on May 3.May 15 Paid advertising expense for last half of May, $11,000.May 17 Received cash from sale of May 2.May 20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 2. The costof the returned merchandise was $8,000.May 21 Sold merchandise on account to Crescent Co., terms n/eom, FOB shipping point, $110,000. Thecost of the goods sold was $70,000.May 21 For the convenience of Crescent Co., paid freight on sale of May 21, $2,300.May 21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.May 24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.May 28 Paid sales salaries of $56,000 and office salaries of $29,000.May 29 Purchased store supplies for cash, $2,400.May 31 Received cash from sale of May 21 plus freight.May 31 Paid for purchase of May 21, less return of May 24.Required:1. Journalize the transactions for May, the last month of the fiscal year.2. Post the journal entries to the general ledger.3. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet usingthe following adjustment dataAt the end of May, the following adjustment data were assembled:Item Description Amounta Physcial inventory count on May 31 $ 295,000b Insurance expired during the year 12,000c Store supplies on hand on May 31 4,000d Depreciation for the current year 14,000e Accrued salaries on May 31:Sales salaries $ 7,000Office salaries 6,600Total 13,600f The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold.4. Journalize the adjusting entries. Post the adjusting entries to the general Ledger5. Prepare a multiple-step income statement.6. Prepare a statement of stockholders’ equity. Assume that additional common stock of $10,000 was issued in January 20Y6.7. Prepare a balance sheet.8. Journalize the closing entries. Then post the closing entries to the general ledger .9. Prepare a post-closing trial balance. GENERAL LEDGERACCOUNT: Cash ACCOUNT NO: 110POST BALANCEDATE ITEM REF. DEBIT CREDIT DEBIT CREDIT20Y6May 1 Balance Ö 83,600.00ACCOUNT: Accounts Receivable ACCOUNT NO: 112POST BALANCEDATE ITEM REF. DEBIT CREDIT DEBIT CREDIT20Y6May 1 Balance Ö 33,900.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Comprehensive Problem 2
Transactions:
May 1 Paid rent for May, $5,000.
May 2 Sold merchandise on account to Korman Co., terms n/15, FOB shipping point, $68,500. The cost of
the goods sold was $41,000.
May 3 Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
May 4 Paid freight on purchase of May 3, $600.
May 10 Sold merchandise with a list price of $61,500 to customers who used VISA and who redeemed
$7,500 of point-of-sale coupons. The cost of the goods sold was 32,000.
May 13 Paid for merchandise purchased on May 3.
May 15 Paid advertising expense for last half of May, $11,000.
May 17 Received cash from sale of May 2.
May 20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 2. The cost
of the returned merchandise was $8,000.
May 21 Sold merchandise on account to Crescent Co., terms n/eom, FOB shipping point, $110,000. The
cost of the goods sold was $70,000.
May 21 For the convenience of Crescent Co., paid freight on sale of May 21, $2,300.
May 21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
May 24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
May 28 Paid sales salaries of $56,000 and office salaries of $29,000.
May 29 Purchased store supplies for cash, $2,400.
May 31 Received cash from sale of May 21 plus freight.
May 31 Paid for purchase of May 21, less return of May 24.
Required:
1. Journalize the transactions for May, the last month of the fiscal year.
2. Post the journal entries to the general ledger.
3. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet using
the following adjustment data
At the end of May, the following adjustment data were assembled:
Item Description Amount
a Physcial inventory count on May 31 $ 295,000
b Insurance expired during the year 12,000
c Store supplies on hand on May 31 4,000
d Depreciation for the current year 14,000
e Accrued salaries on May 31:
Sales salaries $ 7,000
Office salaries 6,600
Total 13,600
f The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold.
4. Journalize the adjusting entries. Post the adjusting entries to the general Ledger
5. Prepare a multiple-step income statement.
6. Prepare a statement of stockholders’ equity. Assume that additional common stock of $10,000 was issued in January 20Y6.
7. Prepare a balance sheet.
8. Journalize the closing entries. Then post the closing entries to the general ledger .
9. Prepare a post-closing trial balance.

GENERAL LEDGER
ACCOUNT: Cash ACCOUNT NO: 110
POST BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
20Y6
May 1 Balance Ö 83,600.00
ACCOUNT: Accounts Receivable ACCOUNT NO: 112
POST BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
20Y6
May 1 Balance Ö 33,900.00

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