At the beginning of the current season on April 1, the ledger of Kokott Pro Shop showed Cash $3,000; Inventory $4,000; and Owner’s Capital $7,000. These transactions occurred during April 2014.
Apr. 5 Purchased golf bags, clubs, and balls on account from Hogan Co. $1,200,
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 $600, terms n/30.
12 Purchased golf shoes, sweaters, and other accessories on account from Duffer Sportswear $450, 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 $600, terms n/30.
21 Paid Duffer Sportswear in full.
27 Granted credit to customers for clothing that had flaws $35.
30 Received payments on account from customers $600.
The chart of accounts for the pro shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Owner’s Capital, Sales Revenue, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Purchase Discounts, and Freight-In.
(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, 2014.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,824.