Eagle Hardware Store Ltd. completed the following merchandising transactions in the month of May 2015. At the

Question:

Eagle Hardware Store Ltd. completed the following merchandising transactions in the month of May 2015. At the beginning of May, Eagle's ledger showed Cash $7,000; Accounts Receivable $1,500; Merchandise Inventory $3,500; Common Shares $8,000; and Retained Earnings $4,000. Eagle Hardware uses a perpetual inventory system.

May 1 Purchased merchandise on account from Depot Wholesale Supply Ltd. for $5,800, terms 1/10, n/30, FOB shipping point.

3 Freight charges of $145 were paid by the appropriate party on the merchandise purchased on May 1.

4 Sold merchandise on account to Shep Ltd. for $3,500, terms 2/10, n/30, FOB destination. The cost of the merchandise was $2,100.

7 Freight charges of $90 were paid by the appropriate party on the May 4 sale.

8 Received a $200 credit from Depot Wholesale Supply when merchandise was returned.

9 Paid Depot Wholesale Supply in full.

11 Purchased supplies for $400 cash.

14 Received payment in full from Shep Ltd. for merchandise sold on account on May 4.

15 Collected $1,000 of the accounts receivable outstanding at the beginning of the month. All accounts were originally sold on terms of n/30, with no sales discounts.

18 Purchased merchandise from Harlow Distributors Inc. for $2,000, terms n/30, FOB destination.

21 Freight of $50 was paid by the appropriate party on the May 18 purchase of merchandise.

22 Sold merchandise to various customers for $6,500 cash. The cost of the merchandise was $3,900.

29 Paid a $100 cash refund to customers for returned merchandise. The cost of the returned merchandise was $60. It was restored to inventory.

31 A physical inventory count was taken and determined that there was $5,100 of inventory on hand.

Prepare any adjustment required.

Instructions

(a) Prepare T accounts and enter the opening balances.

(b) Record and post the May transactions for Eagle Hardware Store.

(d) Prepare the current assets section of the statement of financial position as at May 31.

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...