Clucker Poultry Distributing Company completed these inventory transactions in the month of April. At the beginning of April, the ledger of Clucker Poultry’ showed Cash of $4500 and Share Capital of $4500. 

Clucker Poultry Distributing Company’s chart of accounts includes Cash, Accounts Receivable, Inventory, Accounts Payable, Share Capital, Sales, Sales Returns and Allowances, Discount Allowed, Cost of Sales, Freight-in, and Freight-out. 

Required

(a) Journalise the transactions.

(b) Post the transactions to T account. Be sure to enter the beginning cash and share capital balances.

(c) Prepare the statement of profit or loss up to gross profit for the month of April 2016.

(d) Calculate the profit margin ratio and the gross profit ratio. (Assume operating expenses were $450 and ignore the effects of income tax for this question.)  

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Apr. 4 Purchased inventory on account from Leghorn Supply Ltd $2950, terms 2/7, n/30. 6 Sold inventory on account $2500, terms 2/7, n/30. The cost of the inventory sold was $2000. 7 8 11 13 14 16 21 22 23 26 27 29 30 Paid $100 freight on 6 April sale. Received credit from Leghorn Supply Ltd for inventory returned $150. Paid Leghorn Supply Ltd in full, less discount. Received collections in full, less discounts, from customers billed on 6 April. Purchased inventory for cash $2200. Received refund from supplier on cash purchase of 14 April, $250. Purchased inventory from Pigeon Distributors $2100, terms 2/7, n/30. Paid freight on 21 April purchase $50. Sold inventory for cash $3700. The cost of the inventory sold was $3060. Purchased inventory for cash $1150. Paid Pigeon Distributors in full, less discount. Made refunds to cash customers for inventory sold for $45. The returned inventory had a cost of $35. Sold inventory on account $1850, terms n/30. The cost of the inventory sold was $1500.