Alex Diaz, a former professional tennis star, operates Diaz Tennis Shop at the Cedar Lake Resort. At the beginning of the current season, the ledger of Diaz Tennis Shop showed Cash $2,500, Inventory $1,700, and Owner’s Capital $4,200. The following transactions were completed during April.

Apr. 4 Purchased racquets and balls from Marx Co. $840, FOB shipping point, terms 2/10, n/30.

6 Paid freight on purchase from Marx Co. $40.

8 Sold merchandise to members $1,150, terms n/30. The merchandise sold had a cost of $790.

10 Received credit of $40 from Marx Co. for a racquet that was returned.

11 Purchased tennis shoes from Rupp Sports for cash, $420.

13 Paid Marx Co. in full.

14 Purchased tennis shirts and shorts from Hayley’s Sportswear $900, FOB shipping point, terms 3/10, n/60.

15 Received cash refund of $50 from Rupp Sports for damaged merchandise that was returned.

17 Paid freight on Hayley’s Sportswear purchase $30.

18 Sold merchandise to members $900, terms n/30. The cost of the merchandise sold was $540.

20 Received $600 in cash from customers in settlement of their accounts.

21 Paid Hayley’s Sportswear in full.

27 Granted an allowance of $40 to members for tennis clothing that did not fit properly.

30 Received cash payments on account from customers, $710.

The chart of accounts for the tennis shop includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, and No. 505 Cost of Goods Sold.

Instructions

(a) Journalize the April transactions using a perpetual inventory system.

(b) Enter the beginning balances in the ledger accounts and post the April transactions.

(Use J1 for the journal reference.)

(c) Prepare a trial balance on April 30, 2014.