Luft Corporation's accounts had the following beginning balances:

During the period, the following transactions occurred:
1. Purchased inventory on account, $ 1,300.
2. Paid employees, $730.
3. Sold goods for cash, $ 1,940.
4. Sold goods on credit, $1,810.
5. Overhead and other expenses paid in cash, $900.
6. Collection of accounts receivable, $1,510.
7. Paid certain accounts payable, $1,720.
8. Received cash for revenue applicable to the next period, $650.
9. Increased the current note payable by $200.
10. Physical inventory showed ending balance of $ 1,750.
11. Depreciation expense, $300.
Required:
a. Journalize the transactions.
b. Set up T accounts and post beginning balances and transactions.
c. Determine the cost of goods sold.
d. Prepare an ending balance sheet.
e. Prepare an income statement for the period (ignore taxes).

Transcribed Image Text:

Account Dr. Cr. 3,070 2,800 Accounts payable Accounts receivable Accumulated depreciation Allowance for doubtful accounts Cash Fixed assets (at cost) Inventories Note payable (current) Owners equity 2,160 70 1,440 6,200 1,730 600 4,990 $11,530 $11,530