Assume it is Monday May 1 2011 the first business day of the month and you hav

Assume it is Monday May 1 2011 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 company%u2019s 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):

Issued Check No. 3410 to S&P Management Co. in payment of the May rent $2970. (Use two lines to record the transaction. Charge 70% of the
rent to Rent Expense-Selling Space and the balance to Rent Expense-Office Space.)

Sold merchandise on credit to Hensel Company Invoice No. 8785 for $6300 (cost is $4300).

Issued a $200 credit memorandum to Knox Co. for defective (worthless) merchandise sold on April 28 and returned for credit. The total selling
price (gross) was $5000.

Received a $800 credit memorandum from Peyton Products for the return of merchandise purchased on April 29.

Purchased the following on credit from Gear Supply Co.: merchandise $36372; store supplies $590; and office supplies $92. Invoice dated May
4 terms n/10 EOM.

Received payment from Knox Co. for the balance from the April 28 sale less the May 2 return and the discount.

Issued Check No. 3411 to Peyton Products to pay for the $7000 of merchandise purchased on April 29 less the May 3 return and a 2% discount.

Purchased $4600 of office equipment on credit from Gear Supply Co. invoice dated May 10 terms n/10 EOM.

Purchased $9700 of merchandise from Garcia Inc. invoice dated May 10 terms 2/10 n/30.

Received an $850 credit memorandum from Gear Supply Co. for the return of defective office equipment received on May 10.

Issued Check No. 3412 payable to Payroll in payment of sales salaries $4520 and office salaries $2250. Cashed the check and paid the
employees.

Cash sales for the first half of the month are $59220 (cost is $41600). (Cash sales are recorded daily but are recorded only twice here to
reduce repetitive entries.)

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. (Such items are posted daily but are posted only twice each month because they are few in number.)

Sold merchandise on credit to Hensel Company Invoice No. 8786 for $4400 (cost is $2300).

Purchased $13600 of merchandise from Fink Corp. invoice dated May 14 terms 2/10 n/60.

Issued Check No. 3413 to Garcia Inc. in payment of its May 10 invoice less the discount.

Sold merchandise to Lee Services Invoice No. 8787 for $7200 (cost is $5340) terms 2/10 n/60.

Issued Check No. 3414 to Fink Corp. in payment of its May 14 invoice less the discount.

Purchased the following on credit from Gear Supply Co.: merchandise $8620; store supplies $700; and office supplies $265. Invoice dated May
24 terms n/10 EOM.

Purchased $3250 of merchandise from Peyton Products invoice dated May 23 terms 2/10 n/30.

Sold merchandise on credit to Crane Corp. Invoice No. 8788 for $14900 (cost is $8920).

Issued Check No. 3415 to Perennial Power in payment of the May electric bill $1269.

The owner of Colo Company Jenny Colo used Check No. 3416 to withdraw $6100 cash from the business for personal use.

Received payment from Lee Services for the May 22 sale less the discount.

Issued Check No. 3417 payable to Payroll in payment of sales salaries $4520 and office salaries $2250. Cashed the check and paid the
employees.

Cash sales for the last half of the month are $66450 (cost is $42050).

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.

Following accounting adjustments are also available:

Assume that Colo Co. uses the perpetual inventory system. Following opening balances are available for
the month of May 2011.

Required:

1. Enter these transactions in a sales journal a purchases journal a cash receipts journal a cash disbursements
journal.Prepare the general journal.Prepare the adjusting entries.Prepare the closing entries.Prepare a trial balance in the Trial Balance columns of the work sheet form provided below
using the information for accounting adjustments for the month ended May 31 2011.

Post the entries into the following ledger accounts.

Prepare a May 2011 multiple-step income statement.Prepare a May 2011 statement of
owner%u2019s equity.

Prepare a May 2011 classified balance sheet.

Prepare a post-closing trial balance for the month ended May 31 2011.Prepare a schedules of accounts
receivable.Prepare a schedules of accounts payable.