The following trial balance pertains to Nate's Grocery as of January 1, 2012: Account Title Beginning Balances

Question:

The following trial balance pertains to Nate's Grocery as of January 1, 2012:

Account Title Beginning Balances

Cash .............$26,000

Accounts receivable ....... 4,000

Merchandise inventory ..... 50,000

Accounts payable ........ 4,000

Common stock ......... 43,000

Retained earnings ....... 33,000

Totals ...........$80,000

The following events occurred in 2012. Assume that Nate's uses the periodic inventory method.

1. Purchased land for $9,000 cash.

2. Purchased merchandise on account for $96,000, terms 1y10 ny45.

3. Paid freight of $1,000 cash on merchandise purchased FOB shipping point.

4. Returned $3,600 of defective merchandise purchased in Event 2.

5. Sold merchandise for $86,000 cash.

6. Sold merchandise on account for $90,000, terms 2y10 ny30.

7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.

8. Paid $11,600 cash for selling expenses.

9. Collected $50,000 of the accounts receivable from Event 6 within the discount period.

10. Collected $40,000 of the accounts receivable but not within the discount period.

11. Paid $6,400 of other operating expenses.

12. A physical count indicated that $47,600 of inventory was on hand at the end of the accounting period.

Required

a. Record the above transactions in a horizontal statements model like the following one.

The following trial balance pertains to Nate's Grocery as of

b. Prepare a schedule of cost of goods sold and an incomestatement.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...