Question

At the beginning of the current season, the ledger of Connors’ Tennis Shop showed Cash $3,500; Inventory $1,700; and Common Stock $5,200. The following transactions were completed during April 2014.
Apr. 4 Purchased racquets and balls from Rawlings Co. $980, terms 2/10, n/30.
6 Paid freight on Rawlings Co. purchase $60.
8 Sold merchandise to members $750, terms n/30. The merchandise sold cost $480.
10 Received credit of $130 from Rawlings Co. for damaged racquets that were returned.
11 Purchased tennis shoes from Fast Feet for cash $300.
13 Paid Rawlings Co. in full.
14 Purchased tennis shirts and shorts from Armour Sportswear $1,300, terms 3/10, n/60.
15 Received cash refund of $50 from Fast Feet for damaged merchandise that was returned.
17 Paid freight on Armour Sportswear purchase $60.
18 Sold merchandise to members $660, terms n/30. The cost of the merchandise sold was $440.
20 Received $500 in cash from members in partial settlement of their accounts.
21 Paid Armour Sportswear in full.
27 Granted an allowance of $30 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members $550.
The chart of accounts for the tennis shop includes Cash, Accounts Receivable, Inventory,
Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, and
Cost of Goods Sold.

Instructions
(a) Journalize the April transactions using a perpetual 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 for the month of April 2014.



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  • CreatedApril 07, 2014
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