In: Accounting
At the beginning of the current season on 1 April, the ledger of Tri-State Pro Shop showed Cash $2 500; Inventory $3 500; and Graham Woods, Capital $6 000. These transactions occurred during April 2012.
April | 5 | Purchased golf bags, clubs, and balls on account from Balata Company $1 700, FOB delivery point, terms 2/10, n/60. |
7 | Paid freight on Balata purchase $80. | |
9 | Received credit from Balata Company for inventory returned $200. | |
10 | Sold inventory on account to members $950, terms n/30. | |
12 | Purchased golf shoes, sweaters, and other accessories on account from Arrow Sportswear $660, terms 1/10, n/30. | |
14 | Paid Balata Company in full. | |
17 | Received credit from Arrow Sportswear for inventory returned $60. | |
20 | Made sales on account to members $700, terms n/30. | |
21 | Paid Arrow Sportswear in full. | |
27 | Granted credit to members for clothing that did not fit properly $75. | |
30 | Received payments on account from members $1 100. |
The chart of accounts for the pro shop includes Cash; Accounts Receivable, Inventory; Accounts Payable; Graham Woods, Capital; Sales; Sales Returns and Allowances; Purchases; Purchase Returns and Allowances; Discount Received; and Freight-in.
Instructions
(a) Journalise 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 30 April 2012.
(d) Prepare an income statement through gross profit, assuming inventory on hand as at 30 April is $4 524.