As of January 1, the ledger of Sparkles Gift Shop showed Cash $3,070, Inventory $4,070, and Owner’s Capital $7,140. The following transactions occurred during January. 

Jan. 6 Purchased t-shirts from Dazzle Co. $1,710, terms 4/10, n/60. 

8 Paid freight on Dazzle Co. purchases $91. 

12 Received credit from Dazzle Co. for merchandise returned $410. 

13 Purchased magnets and other inventory on account from Glitter Corporation Sportswear $946, terms 2/10, n/30. 

15 Paid Dazzle Co. in full. 

20 Received credit from Glitter Corporation for merchandise returned $146. 

23 Paid Glitter Corporation in full. 

The chart of accounts for the store includes the following: No. 101 Cash, No. 120 Inventory, No. 201 Accounts Payable, and No. 301 Owner’s Capital. 

Instructions 

a. Journalize the transactions using a perpetual inventory system. 

b. Enter the beginning balances in the ledger accounts and post the January transactions using T-accounts.