In 2018, Skip Slider launched a curling supplies company called “Curling Rocks,”
ID: 2532408 • Letter: I
Question
In 2018, Skip Slider launched a curling supplies company called “Curling Rocks,” which buys and sells a variety of curling supplies.
With the recent Olympic Gold Medal win by the men’s team, Skip Slider has reached out to you and asked if you could analyze the entries for the month of May and prepare the company’s first set of financial statements as of May 31, 2018. Here are some company details:
Needed items include:
1) General Journal Entries - transactions for May, Adjusting Journal Entries, and Closing Entries
2) General Ledger - complete with everything posted out to the individual accounts
3) Worksheet - complete and tied out
May 1 - Issued Check No. 5200 to L&J Management Co. in payment of the May rent, $5,000. (Use two lines to record the transaction. Charge 80% of the rent to Rent Expense – Selling Space and the balance to Rent Expense – Office Space.)
May 2 – Sold merchandise on credit to Yellow Rock Company, Invoice No. 9501, for $4,500 (cost is $ 2,000)
May 3 - Issued a $150 credit memorandum to Yellow Rock Company for defective (worthless) merchandise sold on May 2 and returned for credit.
May 4 – Purchased the following on credit from Jerry’s Curling Supply Co. Invoice dated May 4, terms n/10 EOM.
Merchandise $27,027.00
Store supplies $754
Office supplies $38
Total $27,819.00
May 8 – Issued Check No. 5201 to Jerry’s Curling Supply Company for merchandise purchased on May 4th.
May 9 – Sold store supplies to the merchant next door at their cost of $220 cash. (Hint – what are we selling to the next door neighbor, it is not Merchandise Inventory and does not have a cost associated with it) May 10 – Purchased $2,047 of office equipment on credit from Jerry’s Curling Supply Co., invoice dated May 10, terms n/10 EOM.
May 11 – Purchased $6,200 of merchandise from Red Rock, Inc., invoice dated May 10, terms 2/10, n/30.
May 12 – Received a $97 credit memorandum from Jerry’s Curling Supply for the return of defective office equipment received on May 10. May 15 – Issued Check No. 5202, payable to Payroll, in payment of sales salaries, $3,230, and office salaries, $1,510. Cashed the check and paid the employees.
May 15 – Cash sales for the first half of the month are $31,280 (cost is $13,200). (Cash sales are recorded daily but are recorded in a lump sum format through two entries May 15 and May 31)
May 16 – Sold merchandise on credit to House Curling Company, Invoice No. 9502, for $3,990 (cost is $1,890)
May 17 – Purchased $23,650 of merchandise from Olympics Gold, invoice dated May 17, terms 2/10, n/60.
May 19 – Issued Check No. 5203 to Red Rock, Inc. in payment of its May 11 invoice less the discount.
May 22 – Sold merchandise to Sweep Services, Invoice No. 9503, for $8,650 (cost is $4,990), terms 2/10, n/60.
May 23 – Issued Check No. 5204 to Olympics Gold in payment of its May 17 invoice less the discount.
May 24 – Purchased the following on credit from Jerry’s Curling Supply Company Invoice dated May 24, terms n/10 EOM.
May 25 – Purchased $3,080 of merchandise from Burned Stone Curling, invoice dated May 25, terms 2/10, n/30.
May 26 – Sold merchandise on credit to Draw Weight, Invoice No. 9504, for $21,315 (cost is $12,230).
May 26 – Issued Check No. 5205 to Pebble Power in payment of the May electric bill, $983.
May 29 – The owner of Curling Rocks, Skip Slider, used Check No. 5206 to withdraw $4,800 cash from the business for personal use.
May 30 – Received payment from Sweep Services for the May 22 sale less the discount.
May 30 – Issued Check No. 5207, payable to Payroll, in payment of sales salaries, $3,230, and office salaries, $1,510. Cashed the check and paid the employees.
May 31 – Cash sales for the last half of the month are $46,025 (cost is $22,500)
Explanation / Answer
In the books of Curling Rocks:
Contd.
Date General Journal Debit Credit 2018 $ $ May 1 Rent Expense: Selling Space 4,000 Rent Expense: Office Space 1,000 Cash 5,000 May 2 Accounts Receivable: Yellow Rock Company 4,500 Sales 4,500 May 2 Cost of Goods Sold 2,000 Inventory 2,000 May 3 Sales Returns and Allowances 150 Accounts Receivable: Yellow Rock Company 150 May 3 Inventory 66.67 Cost of Goods Sold 66.67 May 4 Inventory 27,027 Store Supplies 754 Office Supplies 38 Accounts Payable: Jerry's Curling Supplies Co. 27,819 May 8 Accounts Payable: Jerry's Curling Supplies Co. 27,819 Cash 27,819 May 9 Cash 220 Store Supplies 220 May 10 Office Equipment 2,047 Accounts Payable: Jerry's Curling Supplies Co. 2,047 May 11 Inventory 6,200 Accounts Payable: Red Rock Inc. 6,200 May 12 Accounts Payable: Jerry's Curling Supplies Co. 97 Office Equipment 97 May 15 Sales Salaries Expense 3,230 Office Salaries Expense 1,510 Cash 4,740 May 15 Cash 31,280 Sales 31,280 Cost of Goods Sold 13,200 Inventory 13,200 May 16 Accounts Receivable: House Curling Co. 3,990 Sales 3,990 May 16 Cost of Goods Sold 1,890 Inventory 1,890 May 17 Inventory 23,650 Accounts Payable : Olympics Gold 23,650 May 19 Accounts Payable: Red Rock Inc. 6,200 Inventory 124 Cash 6,076 May 22 Accounts Receivable: Sweep Services 8,650 Sales 8,650 May 22 Cost of Goods Sold 4,990 Inventory 4,990 May 23 Accounts Payable: Olympics Gold 23,650 Inventory 473 Cash 23,177