Question: Nisson Distributing Ltd. completed the following merchandising transactions in the month of April. At the beginning of April, Nisson's general ledger showed Cash $4,000; Accounts
Nisson Distributing Ltd. completed the following merchandising transactions in the month of April. At the beginning of April, Nisson's general ledger showed Cash $4,000; Accounts Receivable $3,500; Merchandise Inventory transactions $2,500; Common Shares $5,000; and Retained Earnings $5,000. Nisson uses a perpetual inventory system.
Apr. 2 Purchased merchandise on account from Kai Supply Corp. for $8,900, terms 1/15, n/30, FOB shipping point.
3 The appropriate party paid $225 freight on the April 2 purchase from Kai Supply.
5 Sold $11,600 of merchandise on account to Kananaskis Supply Ltd., terms 2/10, n/30, FOB destination. The cost of the merchandise was $7,540.
9 The appropriate party paid $290 freight on the April 5 sale of merchandise to Kananaskis Supply.
10 Issued a $1,600 credit for merchandise returned by Kananaskis Supply. The merchandise originally cost $1,030 and was returned to inventory.
11 Purchased merchandise on account from Pigeon Distributors Limited for $4,200, terms 1/10, n/30,
FOB destination.
12 The appropriate party paid $100 freight on the April 11 purchase from Pigeon Distributors.
13 Received a $300 credit for merchandise returned to Pigeon Distributors.
14 Received the balance owing from Kananaskis Supply.
17 Paid Kai Supply in full.
20 Paid Pigeon Distributors in full.
23 Sold merchandise for $6,400 cash. The cost of the merchandise was $5,200.
24 Made a $400 cash refund for damaged merchandise returned from the April 23 purchase. The cost of the merchandise returned was $260 and it was not restored to inventory.
27 Purchased merchandise from Tipsea Inc. for $6,100 cash.
30 Received a $500 refund for merchandise that was returned to Tipsea from the April 27 cash purchase.
Instructions
(a) Prepare T accounts and enter the opening balances.
(b) Record and post the April transactions for Nisson.
(c) Prepare a partial multiple-step income statement for the month ended April 30, through to gross profit.
(d) Prepare the current assets section of the statement of financial position as at April 30.
Step by Step Solution
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b Apr 2 Merchandise Inventory Accounts Payable 8900 8900 3 Merchandise Inventory Cash 225 225 6 Accounts Receivable Sales 11600 11600 Cost of Goods So... View full answer
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