Question

At the beginning of the current season on April 1, the ledger of Kokott Pro Shop showed Cash $3,800; Inventory $4,300; and Common Stock $8,100. These transactions occurred during April 2017.

Apr. 5		Purchased golf bags, clubs, and balls on account from Hogan Co. $1,300, FOB shipping point, terms 2/10, n/60.
7		Paid freight on Hogan Co. purchases $50.
9		Received credit from Hogan Co. for merchandise returned $100.
10		Sold merchandise on account to customers $880, terms n/30.
12		Purchased golf shoes, sweaters, and other accessories on account from Duffer Sportswear $750, terms 1/10, n/30.
14		Paid Hogan Co. in full.
17		Received credit from Duffer Sportswear for merchandise returned $50.
20		Made sales on account to customers $880, terms n/30.
21		Paid Duffer Sportswear in full.
27		Granted credit to customers for clothing that had flaws $30.
30		Received payments on account from customers $880.

The chart of accounts for the pro shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Purchase Discounts, and Freight-In.

Step 1: Journalize the April transactions using a periodic inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Step 2: Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions. (Post entries in the order of journal entries presented in the previous question.)

Step 3: Prepare a trial balance on April 30, 2017.

Step 4: Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $5,469.

Answer 1

1.

KOKOT PRO SHOP
Journal entries for the month of April 2017
Date	Account title	Debit	Credit
Apr.5	Inventory	1300
	Accounts Payable		1300
	(Purchase of goods on account from Hogan)
Apr.5	Inventory	50
	Cash		50
	(Freight charges on purchases)
Apr.9	Accounts Payable	100
	Inventory		100
	(Credit received for returned goods from Hogan)
Apr.10	Accounts Receivable	880
	Sales		880
	(Sales of goods on account)
Apr.12	Inventory	750
	Accounts Payable		750
	(Purchase of goods on account from Duffer)
Apr.14	Accounts Payable	1200
	Cash		1176
	Inventory		24
	(Payment made to Hogan in full)
Apr.17	Accounts Payable	50
	Inventory		50
	(Credit received for returned goods from Duffer)
Apr.20	Accounts Receivable	880
	Sales		880
	(Sales of goods on account)
Apr.21	Accounts Payable	700
	Cash		693
	Inventory		7
	(Payment made to Duffer in full)
Apr.27	Sales	30
	Accounts Receivable		30
	(Credit granted to customers for flaws in goods)
Apr.30	Cash	850
	Accounts Receivable		850
	(Payment received from custmers on account)

2.

Cash					Inventory					Common Stock
Date	Debit	Credit	Date		Date	Debit	Credit	Date		Date	Debit	Credit	Date
Beg.Bal.	3800	50	Apr.5		Beg.Bal.	4300	100	Apr.9				8100	Beg.Bal.
Apr.30	850	1176	Apr.14		Apr.5	1300	24	Apr.14
		693	Apr.21		Apr.7	50	50	Apr.17			0	8100
	4650	1919			Apr.12	750	7	Apr.21				8100	End.bal.
End.Bal.	2731					6400	181
					End.Bal.	6219
Accounts Payable					Accounts Receivable					Sales
Date	Debit	Credit	Date		Date	Debit	Credit	Date		Date	Debit	Credit	Date
Apr.9	100	1300	Apr.5		Apr.10	880	30	Apr.27		Apr.27	30	880	Apr.10
Apr.14	1200	750	Apr.12		Apr.20	880	850	Apr.30				880	Apr.20
Apr.17	50					1760	880				30	1760
Apr.21	700				End.Bal.	880						1730	End.bal.
	2050	2050
		0	End.bal.

3.

KOKOT PRO SHOP
Trial balance as at April 30, 2017
Account	Debit	Credit
Cash	2731
Accounts Receivable	6219
Inventory	880
Common Stock		8100
Sales		1730
T o t a l	9830	9830

4.

KOKOT PRO SHOP
Income statement for the month ending April 30, 2017
Sales Revenue	1730
Cost of goods sold (6,219 - 5,469)	750
Gross profit	980