267 Problems: Set B Received refund for poor quality merchandise from supplier on cash purchase May 15 Purchased merchandise from Sherrick Distributors 1,300, FOB shipping point, terms 2/10, n/30 Paid freight on May 17 purchase 130. Sold merchandise for cash 3,200. The merchandise sold had a cost of 2,000. 17 19 24 25 Purchased merchandise from Herbert, Inc. 620, FOB destination, terms 2/10 n/30. Paid Sherrick Distributors in full, less discount. Made refunds to cash customers for defective merchandise 90. The returned merchandise had a fair value of 40. 27 29 31 Sold merchandise on account E1,000 terms n/30. The cost of the merchandise sold was E560. Norwich Hardware's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 311 Share Capital-Ordinary, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold. InstructioLs (a) Journalize the transactions using a perpetual inventory system. (b) Enter the beginning cash and share capital-ordinary balances and post the transac- tions. (Use J1 for the journal reference.) (c) Prepare an income statement through gross profit for the month of May 2017 PS-38 Lerwick Store Ltd. is located in midtown Metropolis. During the past several years, (c) Gross profit 2,567 Prepere financial statements net income has been declining because of suburban shopping centers. At the end of the and edjusting and closing company's fiscal year on November 30, 2017, the following accounts appeared in two of its tries. trial balances. (LO 4, 5)