Chapter 5, Problem 1CE

Continuing Exercise

This exercise continues the Sensations Salon, Inc., exercise begun in Chapter 1. Consider the June transactions for Sensations Salon presented in Chapter 4. (Cost data has been removed from the sale transactions.)

June 2	Completed styling services and received cash of $385.
5	Purchased 10 bottles of shampoo on account for inventory, $175. plus freight-in of $5. Freight-in was added to invoice by seller. Credit terms were n/30.
15	Sold 7 bottles of shampoo on account, $196.
17	Performed styling services on account for $435.
20	Purchased 12 bottles of shampoo on account for inventory, $228.
21	Paid on account, $1,950.
25	Sold 5 bottles of shampoo for cash, $140.
30	Recorded the following adjusting entries: Accrued salaries for the month of June equal $240. Depreciation on equipment $53. Supplies used during June were $23. Physical count of shampoo inventory, 9 bottles

Refer to the T-accounts for Sensations Salon, Inc., from the Continuing Exercise in Chapter 3. Use the ending post-closing balances from the T-accounts at May 31.

Requirements

1. 1. Prepare perpetual inventory records for Shampoo Inventory for June for Sensations Salon, Inc., using the FIFO method.
2. 2. Journalize and post the June transactions using the perpetual inventory record created in Requirement 1. Omit explanations. Key all items by date. Compute each account balance, and denote the balance as Bal.
3. 3. Journalize and post the adjusting entries. Denote each adjusting amount as Adj. Compute each account’s ending balance and denote the balance as Bal.
4. 4. Journalize and post closing entries. Denote each closing amount as C/o. Compute each account’s ending balance and denote the balance as Bal. Prove the equality of debits and credits by preparing a post closing trial balance.