d. Auto Zone uses the "Gross" method of accounting for purchases and sales. The "Net" method assumes that discounts are taken at the point of sale or purchase.

MAY JOURNAL TRANSACTIONS

May 1

Paid $2,100 to LG for utilities bill that was recorded in April as an Account Payable, Check #1000.

May 1

Purchased 3,000 GPS units on Credit from Yamaha for $35.00 per unit.

May 1

Purchases office supplies from Staples on credit for $1,800

May 1

Signed a one-year 15%, $150,000 note payable with Chase Bank.

May 2

Rented part of the warehouse to a new tenant and received $12,000 for three months rent (May, June, July).

May 2

Sold 2,000 Aux Cords on account to Tesla for $85 per units, Invoice #2000.

May 2

Sold 400 USB Ports for $70 per unit and 1,200 GPS units for $75 per unit on account to Dodge, Invoice #2001.

May 3

Received a bill from the law firm of Davenport Associates for $6,300, payable upon receipt, for bond consulting fees, Check #1001.

May 4

Sold 500 Aux Cords on credit to Buick for $77 per unit, Invoice #2002.

May 4

Purchased 2,100 USB Ports on credit from Shure for $45 per unit.

May 5

Paid for office supplies purchased at Staples on May 1st, Check #1002.

May 7

Sold 200 GPS units on account to Chevrolet for $49 per unit, Invoice #2003.

May 8

Issued 4,750 shares of common stock for $13 per share

May 11

Purchased 1,875 GPS units on credit from Sony for $25 per unit.

May 11

The Board of Directors declared a cash dividend of $7 per share for shareholders of record on May 13th, payable on May 17th.

May 12

Paid in full for the May 1 purchase from Yamaha, Check #1003.

May 13

Received and paid expense reports for travel and entertainment totaling $1,500, Check #1004.

May 13

Took advantage of a special deal to purchase 1,500 Aux Cords on account from Panasonic for $42 per unit.

May 15

Received payment in full from Tesla for the May 2nd sale.

May 15

Sold 1,050 USB Ports on credit to Chevrolet for $57 per unit, Invoice #2004.

May 16

Received payment from Buick for $125,000 of the $300,000 owed from April 5.

May 17

Paid the dividend that was declared on May 11th, Check #1005.

May 17

Check # 1006 was issued for payroll: $14,900 for salaries and $5,100 for wages.

May 20

Issued a credit to Chevrolet for the return of 150 defective units from the May 7th sale. These units has a cost basis of $35 per unit.

May 20

Returned the 150 defective units received from Chevrolet to Yamaha.

May 22

Purchased a $500 international phone card for one of the sales representative's upcoming European business trip, Check #1008.

May 23

Issued bonds payable at face value for $420,000

May 23

Purchased 2,080 USB Ports from Shure for $41 per unit paying in cash, Check #1009

May 24

Check #1010 was issued for payroll: $14,900 for salaries and $5,100 for wages.

May 25

Hired and paid a consultant $50,000 to devise a marketing plan. Auto Zone's management felt this was necessary to develop brand awareness. Check #1011.

May 26

While inspecting the May 11th purchase, it was discovered that the GPS units were programmed for Asia instead of North America. Auto Zone returned the entire order to Sony.

May 27

A bankruptcy judge disallowed Auto Zone's claim for $25,000 due from Jeep. Management Decided to write off this accounts receivable.

May 27

Sold 500 USB Ports on credit to GMC for $61 per unit, Invoice #2005.

May 29

Paid in full for the purchase from Panasonic on May 13, Check #1012.

May 29

Received payment in full from GMC for the May 27th transaction.

May 30

Auto Zone is behind in its mortgage payments to Fifth Third Bank. Paid a total of $20,000 ($5,000 principal and $15,000 interest), Check #1013.

May 31

Paid the first month's principal payment of $12,500 on the note payable. In addition, paid one month's interest, Check #1007

*All purchases on account terms of 2/15, n/30

**All credit sales have terms of 2/30, n/45

May Month-end Adjustments:

( A )

The Company took a physical count of Office Supplies on May 30 and found the following the value of inventory on hand to be $2,500. The beginning inventory was $3,200. Write the adjusting journal entry.

( B )

Auto Zone estimates bad debt expense on a monthly basis rather than waiting until year-end. The company uses the allowance method. Based on recent industry estimates, Auto Zone estimates that the allowance account should be 7.5% of accounts receivable. The ending AR balance is $850,000. At the end of the month (prior to this journal entry) there is a CREDIT balance of $19,000 in the Allowance for Doubtful Accounts account. Write the necessary adjusting entry.

( C )

The Balance of $23,000 in the prepaid insurance account at the beginning of May represents 5 months of coverage. Record the amount of insurance for May.

( D )

The Company took a physical inventory count on May 30 and found the following inventory on hand to be $100,641. The ending balance in the Inventory account (before this adjusting entry) was $128,947. Write the necessary adjusting entry.

( E )

Auto Zone has earned two months of the prepaid rent received from their tenant at the beginning of May.

( F )

Depreciation on the company's fixed assets for the month of May is as follows:

1. The furniture and equipment for the office was purchased last year for $7,350. these assets have a 5 year life, an expected salvage value of $500, and are depreicated using straight-line method.

2. The furniture and equipment for the warehouse was purchased a few years ago for $30,000. These assets have a 8-year life, an expected salvage value of $5,000, and are depreciated using the straight-line method.

Shoe:

GPS

Beginning Inventory (BI)

Purchases

Sales

Ending Inventory (EI)

Beginning Inventory (BI)

Purchases

Sales

Ending Inventory (EI)

Beginning Inventory (BI)

Purchases

Sales

Ending Inventory (EI)

Palisade Creek Co. is a merchandising business that uses theperpetual inventory system. The account balances for Palisade CreekCo. as of May 1, 2016 (unless otherwise indicated), are asfollows:

110	Cash	$ 83,600
112	Accounts Receivable	233,900
115	Merchandise Inventory	624,400
116	Estimated Returns Inventory	28,000
117	Prepaid Insurance	16,800
118	Store Supplies	11,400
123	Store Equipment	569,500
124	Accumulated Depreciation-Store Equipment	56,700
210	Accounts Payable	96,600
211	Salaries Payable	â
212	Customers Refunds Payable	50,000
310	Lynn Tolley, Capital, June 1, 2015	685,300
311	Lynn Tolley, Drawing	135,000
312	Income Summary	â
410	Sales	5,069,000
510	Cost of Merchandise Sold	2,823,000
520	Sales Salaries Expense	664,800
521	Advertising Expense	281,000
522	Depreciation Expense	â
523	Store Supplies Expense	â
529	Miscellaneous Selling Expense	12,600
530	Office Salaries Expense	382,100
531	Rent Expense	83,700
532	Insurance Expense	â
539	Miscellaneous Administrative Expense	7,800

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

Record the following transactions on page 20 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.

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 merchandisesold 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 $13,230 for returnedmerchandise from sale of May 6. The invoice amount of the returnedmerchandise was $13,500 and the cost of the returned merchandisewas $8,000.

Record the following transactions on page 21 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.

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 ofMay 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 of damaged merchandise purchased on May 21, receivinga credit memo from the seller for $5,000.
	26	Refunded cash on sales made for cash, $7,500. The cost of themerchandise returned was $4,800.
	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 May21.
	31	Paid for purchase of May 21, less return of May 24.

Required:

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

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

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

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

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

â¢

Merchandise inventory on May 31, $570,000

â¢

Insurance expired during the year, $12,000

â¢

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

â¢

Depreciation for the current year, $14,000

â¢

Accrued salaries on May 31:

Sales salaries, $7,000

Office salaries, $6,600

Total accrued salaries: $13,600

â¢

The adjustment for customer returns and allowances is $60,000for sales and $35,000 for cost of merchandise sold.

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

A.	Journalize the adjusting entries. Record the adjusting entrieson Page 22 of the journal.*
B.	Post the adjusting entries. Add the appropriate postingreference to the journal.

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

* Refer to the Chart of Accounts for exact wording of accounttitles.

sapphirecod7

Record each business transaction, in sequence by date, in theappropriate special journal or the general journal. Also,immediately record any transaction involving inventory, a customer,or a vendor in the appropriate subsidiary ledger record. Availablejournals & ledgers: Sales Journal, Purchase Journal, CashReceipts Journal, Cash Payment Journal, General Journal, GeneralJournal ADJ, General Journal CLOSING, General Ledger, AR Ledger, APLedger: - **I need to know which of the journals each transactionbelongs to as well of the above mentioned options**

JUNE JOURNALTRANSACTIONS

June 1	Signed a 3 year 7.1% , $210000 notepayable with First Bank.

June 1	Purchased 3100 GPS units on credit from Navistar for $35.5 perunit.

June 1	Issued 5,000 shares of common stock for$10 per share (Refer to General ledger for description of commonstock).

June 1	Sold 1983 DVD players on account to Toyotafor $75 per unit, Invoice #5555

June 2	Sold 3400 GPS units on account to Kia for$58 per unit, Invoice #5556.

June 2	Purchased office supplies from Office Maxon credit for $1150

June 2	Sold 975 docking stations for $66 per unitand 1925 GPS units for $82 per unit on account to Nissan, Invoice#5557.

June 3	The Board of Directors declared a cashdividend of $5 per share for shareholders of record on June 5th,payable on June 12th.

June 4	Received payment from Toyota for May 11thsale.

June 4	Rented part of the warehouse to a newtenant and received $5400 for three months rent starting inJune

June 5	Paid $2,100 to Michigan Utility Co. forutilities bill that was recorded in May as an Account Payable,Check #5278.

June 7	Received and paid expense reports fortravel and entertainment totaling $900 , Check#5279.

June 8	Paid for office supplies purchased on June2nd, Check#5280.

June 11	Paid in full for the June 1 purchase fromNavistar, Check#5281.

June 11	Received a bill from the law firm ofLarry, Moe & Curly for $5400 , payable upon receipt, for bondconsulting fees, Check#5282.

June 12	Paid the dividend that was declared onJune 3, Check #5283.

June 13	Took advantage of a special deal topurchase 3250 DVD players on account from JVC for $48 perunit.

June 13	Purchased 850 GPS units on credit fromMagellan for $33 per unit.

June 15	Sold 2000 DVD players on credit to FordMotor Co. for $89 per unit, Invoice5558.

June 15	Check # 5284 was issued for payroll:$14500 for salaried and $4750 for wages (wageexpense)

June 16	Purchased 1800 docking stations on creditfrom Samsung for $42 per unit.

June 17	Issued a credit to Kia for the return of350 defective units from the June 2nd sale. These units has a costbasis of $36 per unit.

June 17	Returned the 350 defective units receivedfrom Kia to Navistar.

June 18	Received payment in full from Toyota forthe June 1stsale.

June 20	While inspecting the June 13th purchase,it was discovered that the GPS units were programmed for SouthAmerica instead of North America. AC Speed returned the entireorder to Magellan.

June 20	A bankruptcy judge disallowed AC Speed'sclaim for $5,000 due from General Motors. Management Decided towrite off this accounts receivable.

June 22	Sold 1650 docking stations on credit toKia for 64.5 per unit, Invoice #5559.

June 23	Paid $75000 of the $162500 owed to JVCfrom May 25, Check #5285.

June 23	Received payment from Ford Motor Co. for$175000 of the $300000 owed from May5.

June 24	Purchased a $100 international phone cardfor one of the sales representative's upcoming European businesstrip, Check #5286.

June 25	Paid in full for the purchase from JVC onJune 13, Check#5287

June 26	Purchased 1250 docking station from Samsung for $41 per unitpaying in cash, Check #5288

June 27	Sold 1500 docking stations on credit toHonda for $61 per unit, Invoice 5560.

June 27	Hired and paid a consultant $75000 todevise a marketing plan. AC Speed's management felt this wasnecessary to develop brand awareness. Check#5289.

June 28	AC Speed is behind in its mortgagepayments to Bank of America. Paid a total of $10000 ( $2000principal and $8000 interest), Check #5290.

June 29	Received payment in full from Honda forthe June 27thtransaction.

June 29	Paid in full for the purchase fromMagellan on May 31st, Check#5291.

June 29	Check # 5292 was issued for payroll:$14500 for salaried and $4750 for wages (wageexpense)

June 30	Paid the first month's principal paymentof $15,000 on the note payable. In addition, paid one month'sinterest, Check #5293

June 30	Issued bonds payable at face value for$450,000

*All purchases on accountterms of 2/15, n/30

**All credit sales have termsof 2/20, n/30

June Month-endAdjustments:

( A )	AC Speed has earned one month of theprepaid rent received from their tenant at the beginning ofJune.

( B )	The Company took a physical count ofOffice Supplies on June 30 and found the following to be on hand:Office Supplies - $2500

( C )	AC Speed estimates bad debt expense on amonthly basis rather than waiting until year-end. The company usesthe allowance method. Based on recent industry estimates, AC Speedestimates that the allowance account should be 2% of accountsreceivable.

( D )	The Company took a physical inventorycount on June 30 and found the following inventory on hand:Merchandise Inventory - $120000


( E )	The Balance in the prepaid insuranceaccount at the beginning of June represents 4 months of coverage.Record the amount of insurance for June.

( F )	Depreciation on the company's fixed assets for the month ofJune is as follows:
	1. The furniture and equipment for thewarehouse was purchased a few years ago for 10000. These assetshave a 4-year life, an expected salvage value of 1000 and aredepreciated using the straight-line method.
	2. The furniture and equipment for theoffice was purchased last year for 8500. these assets have a 7 yearlife, an expected salvage value of 1500 and are depreicated usingstright-line method.

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Accounting 580,000

Trans.	Date	Description
1	May 1	Sell 50,000 shares of common stock for $50,000 to obtain thefunds necessary to start your business.
2	May 1	Borrow $20,000 from the local bank and sign a note promising torepay the full amount of the debt in 5 years.
3	May 1	Issue 1,500 shares of $2 par value preferred stock at$30/share.
4	May 1	Purchase equipment necessary for business operations for$15,000.
5	May 1	Pay one year of rent in advance, $12,000 ($1,000 per month.)
6	May 3	Purchase supplies on account, $800.
7	May 3	Purchase 200 units of inventory with cash.
8	May 6	Provide 40 hours of services to customers for cash (calculateusing your hourly service rate).
9	May 10	Sell 100 units of inventory on account. (Perpetual method = 2entries)
10	May 12	Sell 50 units of inventory to a customer on account with a salesdiscount of 2/10, n/30.
11	May 15	Purchase an additional 300 units of inventory onaccount.
12	May 20	The customer who purchased product on May 12th pays the amountdue (within discount period).
13	May 23	Receive cash in advance for 20 hours of services to be completedin the future.
14	May 31	Sell 200 units of inventory to a customer who signs a 6-monthpromissory note at 10% interest for the balance due.
15	May 31	Pay employee salaries, $1,000.
16	May 31	Pay cash dividends to shareholders, $600.

Adj-1	May 31	Record the portion of the Prepaid Rent used in May.
Adj-2	May 31	The company has $300 of supplies left at month end
Adj-3	May 31	Record one month of depreciation on the equipment. The equipmenthas a useful life of 10 years
Adj-4	May 31	Provide 10 hours of services that were paid in advance on May23^rd.
Adj-5	May 31	Record the receipt of a $300 utilities bill due on June5^th.
Adj-6	May 31	Record accrued interest on the $20,000 â 5 year note payable.The annual interest rate is 10%.

Clo-1	May 31	Close out revenues/income
Clo-2	May 31	Close out expenses/losses
Clo-3	May 31	Close out dividends