A 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 Common Stock $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; Common Stock; 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, 2011.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,726.