At the beginning of the current season on April 1, the ledger of Tri-State Pro Shop showed Cash $3,000; Inventory $4,000; and Common Stock $7,000. These transactions occurred during April 2014.
Apr. 5 Purchased golf bags, clubs, and balls on account from Balata Co. $1,300, FOB shipping point, terms 2/10, n/60.
7 Paid freight on Balata Co. purchases $70.
9 Received credit from Balata Co. for merchandise returned $100.
10 Sold merchandise on account to members $670, terms n/30.
12 Purchased golf shoes, sweaters, and other accessories on account from Arrow Sportswear $450, terms 1/10, n/30.
14 Paid Balata Co. in full.
17 Received credit from Arrow Sportswear for merchandise returned $50.
20 Made sales on account to members $600, terms n/30.
21 Paid Arrow Sportswear in full.
27 Granted credit to members for clothing that had flaws $55.
30 Received payments on account from members $630.
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.
(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.