Newson Hardware Store completed the following merchandising transactions in the month of May. At the beginning of
Question:
Newson Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Newson showed Cash of $10,000 and John Newson, Capital of $10,000.
Newson Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Merchandise Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 John Newson, Capital, No. 401 Sales, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, No. 505 Cost of Goods Sold.
Instructions
(a) Journalize the transactions using a perpetual inventory system.
(b) Enter the beginning cash and capital balances and post the transactions. (Use J1 for the journal reference.)
(c) Prepare an income statement through gross profit for the month of May 2008.
Step by Step Answer:
Accounting Principles
ISBN: 9780471980193
8th Edition
Authors: Jerry J Weygandt, Donald E Kieso, Paul D Kimmel