Answered: ng May, the last month of the fiscal…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

During May, the last month of the fiscal year, the following transactions were completed:

Record the following transactions on page 20 of the journal.

May	1	Paid rent for May, $5,000.
	3	Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
	4	Paid freight on purchase of May 3, $600.
	6	Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the merchandise sold was $41,000.
	7	Received $22,300 cash from Halstad Co. on account.
	10	Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.
	13	Paid for merchandise purchased on May 3.
	15	Paid advertising expense for last half of May, $11,000.
	16	Received cash from sale of May 6.
	19	Purchased merchandise for cash, $18,700.
	19	Paid $33,450 to Buttons Co. on account.
	20	Paid Korman Co. a cash refund of $5,000 for damaged merchandise from sale of May 6. Korman Co. kept the merchandise.

Record the following transactions on page 21 of the journal.

May	20	Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the merchandise sold was $70,000.
	21	For the convenience of Crescent Co., paid freight on sale of May 20, $2,300.
	21	Received $42,900 cash from Gee Co. on account.
	21	Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
	24	Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
	26	Refunded cash on sales made for cash, $800. The defective merchandise was not returned by the customer.
	28	Paid sales salaries of $56,000 and office salaries of $29,000.
	29	Purchased store supplies for cash, $2,400.
	30	Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the merchandise sold was $47,000.
	30	Received cash from sale of May 20 plus freight paid on May 21.
	31	Paid for purchase of May 21, less return of May 24.

Required:

Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the May transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

A.	Enter the May 1 balances of each of the accounts in the appropriate balance column of a four-column account. Enter May 1 in the date column. Write Balance in the item section, and enter “X” in the Posting Reference column.
B.	Journalize the transactions for May, starting on Page 20 of the journal.*

Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. Add the appropriate posting reference to the journal.

Prepare an unadjusted trial balance. Accounts with zero balances can be left blank.

At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

•

Merchandise inventory on May 31, $585,200

•

Insurance expired during the year, $12,000

•

Store supplies on hand on May 31, $4,000

•

Depreciation for the current year, $14,000

•

Accrued salaries on May 31:

Sales salaries, $7,000

Office salaries, $6,600

Total accrued salaries: $13,600

•

The adjustment for customer refunds and allowances is $60,000.

(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. Find a blank end-of-period work sheet in the Excel spreadsheet you previously downloaded.

A.	Journalize the adjusting entries. Record the adjusting entries on Page 22 of the journal.*
B.	Post the adjusting entries. Add the appropriate posting reference to the journal.

Prepare an adjusted trial balance. Accounts with zero balances can be left blank.

*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.