80.2K

Verified Solution

Link Copied!

Assume it is Monday, May 1, the first business day of the month, and you have just been hired as the accountant for Colo Company, which operates with monthly accounting periods. All of the companys accounting work is completed through the end of April, and its ledgers show April 30 balances. During your first month on the job, the company experiences the following transactions and events (terms for all its credit sales are 2/10, n/30 unless stated differently):

May.		1			Issued Check No. 3410 to S&P Management Co. in payment of the May rent for $3,870. Charge $3,000 to Rent ExpenseSelling Space, and charge $870 to Rent ExpenseOffice Space. (Use two lines to record the transaction.)
		2		(a)	Sold merchandise on credit to Hensel Company, Invoice No. 8785, for $7,700 (cost is $5,700).
		2		(b)	Issued an allowance (price reduction) of $255 to Knox Co. for merchandise sold on April 28. The total selling price (gross) was $4,805.
		3			Issued a refund of $830 to Peyton Products for the return of merchandise purchased on April 29. Colo's accounts payable was reduced by that amount.
		4			Purchased the following on credit from Gear Supply Co.: merchandise, $37,104; store supplies, $606; and office supplies, $99. Invoice dated May 4, terms n/10 EOM.
		5			Received payment from Knox Co. for the balance from the April 28 ($4,550) sale less the May 2 return and the $91 discount.
		8			Issued Check No. 3411 to Peyton Products to pay for the $7,178 of merchandise purchased on April 29 less the May 3 return and the $158 discount.
		9			Sold store supplies (noninventory) to the merchant next door at their cost of $398 cash.
		10			Purchased $4,170 of office equipment on credit from Gear Supply Co., terms n/10 EOM.
		11		(a)	Received payment from Hensel Company for the May 2 sale less the discount of $154.
		11		(b)	Purchased $10,400 of merchandise from Garcia, Inc., terms 2/10, n/30.
		12			Received a $950 price reduction from Gear Supply Co. for the return of office equipment received on May 10. Colo debited accounts payable by that amount.
		15		(a)	Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,480, and office salaries, $3,310.
		15		(b)	Cash sales for the first half of the month are $59,540 (cost is $38,520). These cash sales are recorded in the cash receipts journal on May 15.
		15		(c)	Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts.
		16			Sold merchandise on credit to Hensel Company, Invoice No. 8786, for $4,150 (cost is $2,050).
		17			Purchased $13,810 of merchandise from Fink Corp., terms 2/10, n/60.
		19			Issued Check No. 3413 to Garcia, Inc., in payment of its May 11 purchase less the discount of $256.
		22			Sold merchandise to Lee Services, Invoice No. 8787, for $7,010 (cost is $5,150), terms 2/10, n/60.
		23			Issued Check No. 3414 to Fink Corp. in payment of its May 17 purchase less the discount of $305.
		24			Purchased the following on credit from Gear Supply Co.: merchandise, $8,440; store supplies, $790; and office supplies, $600. Terms n/10 EOM.
		25			Purchased $3,400 of merchandise from Peyton Products, terms 2/10, n/30.
		26		(a)	Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,370 (cost is $8,550).
		26		(b)	Issued Check No. 3415 to Perennial Power in payment of the May electric bill, $1,315.
		29			The owner of Colo Company, Jenny Colo, used Check No. 3416 to withdraw $7,000 cash from the business for personal use.
		30		(a)	Received payment from Lee Services for the May 22 sale less the discount of $153.
		30		(b)	Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,480, and office salaries, $3,310.
		31		(a)	Cash sales for the last half of the month are $66,180 (cost is $42,580). These cash sales are recorded in the cash receipts journal on May 31.
		31		(b)	Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts. Foot and crossfoot the journals and make the month-end postings.

2-a. Complete the work sheet using the following information for accounting adjustments. Prepare and post adjusting and closing entries. a. Expired insurance, $569. b. Ending store supplies inventory, $2,648. c. Ending office supplies inventory, $520. d. Depreciation of store equipment, $583. e. Depreciation of office equipment, $345. 2-b. Prepare all necessary ledgers for accounting adjustments. 2-c. Prepare a work sheet for the month ended May 31. 3-a. Prepare a May multiple-step income statement. 3-b. Prepare a May statement of owners equity. 3-c. Prepare a May 31 classified balance sheet. 4-a. Prepare a post-closing trial balance. 4-b1. Prove the accuracy of subsidiary ledgers by preparing schedules of accounts receivable. 4-b2. Prove the accuracy of subsidiary ledgers by preparing schedules of accounts payable.

These are all part of the same question, there was a first part I managed to do on my own, I am extremely appreciative of the help.

Journal entry worksheet 1 > Record the expired insurance, $569. Note: Enter debits before credits Date Credit General Journal Insurance expense Prepaid insurance Debit 5691 May 31 569 Record entry Clear entry View general journal Journal entry worksheet Record the ending store supplies inventory, $2,648. Note: Enter debits before credits Date Credit General Journal Store supplies expense Store supplies Debit 2,648 May 31 2.648 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 7 8 9 Record the ending office supplies inventory, $520. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Office supplies expense 520 Office supplies 520 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 6 7 8 9 Record the depreciation of store equipment, $583. Note: Enter debits before credits. Date General Journal Debit Credit May 31 583 Depreciation expenseStore equipment Accumulated depreciationStore equipment 583 Record entry Clear entry View general journal Journal entry worksheet Record the expired insurance, $569. Note: Enter debits before credits Date Credit General Journal Insurance expense Prepaid insurance Debit 5691 May 31 569 Record entry Clear entry View general journal Journal entry worksheet Record the ending store supplies inventory, $2,648. Note: Enter debits before credits Date Credit General Journal Store supplies expense Store supplies Debit 2,648 May 31 2.648 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 7 8 9 Record the ending office supplies inventory, $520. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Office supplies expense 520 Office supplies 520 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 6 7 8 9 Record the depreciation of store equipment, $583. Note: Enter debits before credits. Date General Journal Debit Credit May 31 583 Depreciation expenseStore equipment Accumulated depreciationStore equipment 583 Record entry Clear entry View general journal Journal entry worksheet

Answer & Explanation Solved by verified expert

See Answer