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GENERAL INSTRUCTIONS FOR MAY

Journalize the transactions listed below.

Prepare an unadjusted trial balance.

Prepare an adjusted trial balance.

Prepare a schedule of accounts receivable.

Prepare an income statement

Prepare a retained earnings statement

Prepare a balance sheet as of May 31, 20--.

TRANSACTIONS FOR MAY

General Entries

May 2 Issued Check No. 132 for $21,500 for this months advertising.

4 Purchased furniture and fixtures for $16,000, plus sales tax of $1,040, by issuing a 10% short-term note payable due in monthly installments of $2,840.00 principal plus interest for six months.

May 6 Issued Check No. 133 for $3,000 for May office rent. The company expanded its office space to accommodate its new furniture business. No additional moneys were requested as prepayments.

Received $13,600 from Marble Tile Co. for decorating services.

Issued Check No. 134 for $1,800 on account to A & D Inc. for the purchase of supplies on April 7.

Purchased supplies on account from A & D Inc. for $3,200 (net 30).

Purchased merchandise on account from Golden Antiques for $55,000 (net 60).

Performed services on account for Maries Boat Shop for $28,000 (net 60).

Received $18,000 cash from the sales of an antique office table and a chair. The cost of the merchandise was $11,250.

Received $10,800 cash on account from Adelles Gift Shop.

20 Sold an antique dining room set on account to Romi Architect, P.A. for $21,000 (terms 2/15, net 60). The cost of the merchandise was $13,125.

25 Performed decorating services on account for Haute Couture Dresses for $15,000 (net 60).

30 Issued Check No. 135 for $240 to pay the utilities bill for the month.

30 Issued Check No. 136 for $320 in payment of the telephone bill for the month.

30 Issued Check No. 137 for $350 for postage.

30 Issued Check No. 138 for $600 for business automobile expenses.

30 Issued Check No. 139 to Sophia LeBron for salary: gross amount $7,500, withholding income tax of $1,500, and FICA (Medicare and Social Security) at 7.5%.

30 Recorded the payroll tax expenses: FICA at 7.5% (employer), SUTA at 3%, and FUTA at 0.8%. (Ignore the salary limit amount for SUTA and FUTA.)

30 Issued Check No. 140 to replenish petty cash. The expenditures were for supplies used, $85, and auto expenses, $150.

Adjusting Entries

Expired insurance for the period, $500.

Supplies on hand at the end of the month, $3,375.

Provision for uncollectible accounts estimated at 3.0% of May credit sales, $1,290.

(Note: This estimate applies only to the service part of the business.)

Monthly depreciation on plant (fixed) assets is based on an 8-year life, no salvage value, and the straight-line method of depreciation.

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