At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Angie Wilbert, Capital $4,200.The following transactions were completed during April.
|
Apr. 4 |
Purchased racquets and balls from Denton Co. $740, terms 3/10, n/30. |
|
6 |
Paid freight on Denton Co. purchase $60. |
|
8 |
Sold merchandise to members $900, terms n/30. |
|
10 |
Received credit of $40 from Denton Co. for a racquet that was returned. |
|
11 |
Purchased tennis shoes from Newbee Sports for cash $300. |
|
13 |
Paid Denton Co. in full. |
|
14 |
Purchased tennis shirts and shorts from Venus’s Sportswear $600, terms 2/10, n/60. |
|
15 |
Received cash refund of $50 from Newbee Sports for damaged merchandise that was returned. |
|
17 |
Paid freight on Venus’s Sportswear purchase $30. |
|
18 |
Sold merchandise to members $1,000, terms n/30. |
|
20 |
Received $500 in cash from members in settlement of their accounts. |
|
21 |
Paid Venus’s Sportswear in full. |
|
27 |
Granted an allowance of $30 to members for tennis clothing that did not fit properly. |
|
30 |
Received cash payments on account from members $500. |
The chart of accounts for the tennis shop includes Cash; Accounts Receivable; Merchandise Inventory; Accounts Payable; Angie Wilbert, 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 $2,296.