Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $5,000, Inventory of $6,900, and Owner’s Capital of $11,900.
May 2 Sold merchandise on account $2,100, terms 1/10, n/30. The cost of the merchandise sold was $1,300.
9 Received collections in full, less discounts, from customers billed on sales of $2,100 on May 2.
24 Sold merchandise for cash $3,200. The merchandise sold had a cost of $2,000.
29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30.
31 Sold merchandise on account $1,000 terms n/30. The cost of the merchandise sold was $560.
Renner Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Instructions
a. Journalize the transactions using a perpetual inventory system. Omit explanations.
b. Enter the beginning cash and capital balances and post the transactions. (Use J1 for the journal reference.)
c. Prepare an income statement through gross profit for the month of May 2022.