At the beginning of April 2016, the ledger of Racquets ‘R’ Us Tennis Shop showed Cash $3750; Inventory $2550; and Share Capital $6300. The following transactions were completed during April. 

The chart of accounts for the tennis shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Share Capital, Sales, Sales Returns and Allowances, and Cost of Sales and Freight Inwards. 

Required

(a) Journalise the April transactions.

(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April transactions.

(c) Prepare a trial balance on 30 April 2016.

(d) Prepare a statement of profit or loss up to gross profit.

(e) What is the purpose of the chart of accounts? Why is it helpful in recording transactions?

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Apr. 6 78 10 11 13 14 15 17 18 20 21 27 30 Purchased racquets and balls from Robert Ltd $1260, terms 3/7, n/30. Paid freight on Robert Ltd purchase $60. Sold inventory to members $1350, terms n/30. The inventory sold cost $900. Received credit of $60 from Robert Ltd for a racquet that was returned. Purchased tennis shoes from Niki Sports for cash $450. Paid Robert Ltd in full. Purchased tennis shirts and shorts from Martina's Sportswear $750, terms 2/7, n/60. Received cash refund of $75 from Niki Sports for damaged inventory that was returned. Paid freight on Martina's Sportswear purchase $45. Sold inventory to members $1350, terms n/30. The cost of the inventory sold was $795. Received $750 in cash from members in settlement of their accounts. Paid Martina's Sportswear in full. Granted an allowance of $45 to members for tennis clothing that did not fit properly. Received cash payments on account from members $750.