At the beginning of the current season on April 1, the ledger of Five Pines Pro Shop showed Cash $3,000; Merchandise Inventory $4,000; and Irene Tiger, Capital $7,000.These transactions occurred during April 2010.
|
Apr. 5 |
Purchased golf bags, clubs, and balls on account from Mickelson Co. $1,200,FOB shipping point, terms 2/10, n/60. |
|
7 |
Paid freight on Mickelson Co. purchases $50. |
|
9 |
Received credit from Mickelson Co. for merchandise returned $100. |
|
10 |
Sold merchandise on account to members $600, terms n/30. |
|
12 |
Purchased golf shoes, sweaters, and other accessories on account from Dagger Sportswear $340, terms 1/10, n/30. |
|
14 |
Paid Mickelson Co. in full. |
|
17 |
Received credit from Dagger Sportswear for merchandise returned $40. |
|
20 |
Made sales on account to members $600, terms n/30. |
|
21 |
Paid Dagger Sportswear in full. |
|
27 |
Granted credit to members for clothing that had flaws $35. |
|
30 |
Received payments on account from members $650. |
The chart of accounts for the pro shop includes Cash; Accounts Receivable, Merchandise Inventory; Accounts Payable; Irene Tiger, Capital; Sales; Sales Returns and Allowances; Purchases; Purchase Returns and Allowances; Purchase Discounts, and Freight in.
Instructions
(a) Journalize the April transactions using a periodic inventory system.
(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April transactions.
(c) Prepare a trial balance on April 30, 2010.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,726.