In 2018, Skip Slider launched a curling supplies company called “Curling Rocks,”
ID: 2532410 • 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:
4) Multiple Step Income Statement
5) Statement of Owner's Equity
6) Balance Sheet
7) Post Closing Trial Balance
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
Looks like some information is missing regarding May 24 transaction, please provide the information to complete the financial statement
1. Journal entries for May 2018 transaction Date Account Titles & Description Debit Credit 1-May Rent Expense-Selling Space $4,000 Rent Expense-Office Space $1,000 Bank $5,000 (To record payment of rent to L&J management co.) 2-May Accounts Receivable $4,500 Sales $4,500 (To record merchandise sold on credit to Yellow Rock Company) 2-May Cost of Sales $2,000 Inventory $2,000 (To record cost of sales) 3-May Sales Return $150 Accounts Receivable $150 (To record Credit memo issued for defective merchandise) 4-May Inventory $27,027 Store Supplies $754 Office Supplies $38 Accounts Payable $27,819 (To record purchases made on credit from Jerry's Curling supply company) 8-May Accounts Payable $27,819 Bank $27,819 (To record check issued to Jerry's curling supply company) 9-May Cash $220 Store Supplies $220 (To record store supplies sold to next door neighbour) 10-May Office Equipment $2,047 Accounts payable $2,047 (To record office equipment purchased from Jerry's curling supply company) 11-May Inventory $6,200 Accounts payable $6,200 (To record merchandise purchased from Red Rock, Inc) 12-May Accounts payable $97 Office Equipment $97 (To record credit memo received from Jerry's curling supply company) 15-May Sales Salaries $3,230 Office Salaries $1,510 Cash $4,740 (To record salaries paid to employees) 15-May Cash $31,280 Sales $31,280 (To record cash sales for period from May 1 to May 15) 15-May Cost of sales $13,200 Inventory $13,200 (To record cost of sales for cash sales) 16-May Accounts receivable $3,990 Sales $3,990 (To record credit sales to House Curling company) 16-May Cost of sales $1,890 Inventory $1,890 (To record cost of sales for sales to House Curling company) 17-May Inventory $23,650 Accounts payable $23,650 (To record merchandise purchased from Olympics Gold) 19-May Accounts payable $6,200 Purchase discount $124 Bank $6,076 (To record check issued to Red Rock, Inc less 2% discount) 22-May Accounts receivable $8,650 Sales $8,650 (To record merchandise sold to Sweep Services) 22-May Cost of sales $4,990 Inventory $4,990 (To record cost of sales for sales to Sweep Services) 23-May Accounts payable $23,650 Purchase discount $473 Bank $23,177 (To record check issued to Olympics Gold less 2% discount) 25-May Inventory $3,080 Accounts payable $3,080 (To record purchase of merchandise from Burned stone curling) 26-May Accounts receivable $21,315 Sales $21,315 (To record merchandise sold to Draw Weight) 26-May Cost of sales $12,230 Inventory $12,230 (To record cost of sales for sales to Draw Weight) 26-May Utility expenses $983 Bank $983 (To record payment to Pebble Power for electricity bill) 29-May Drawings $4,800 Bank $4,800 (To record cash withdrawn for personal use) 30-May Cash $8,477 Sales discount $173 Accounts receivable $8,650 (To record payment received from Sweep Services less 2% discount) 30-May Sales Salaries $3,230 Office Salaries $1,510 Cash $4,740 (To record salaries paid to employees) 31-May Cash $46,025 Sales $46,025 (To record cash sales for period from May 16 to May 31) 31-May Cost of sales $22,500 Inventory $22,500 (To record cost of sales for cash sales)