1. ABC Co. began operations on January 1. Please prepare journal entries, where appropriate, for the following transactions during January.

Jan 2 Purchased $8,000 merchandise, 2/10, n/30. FOB Shipping Point

Jan 4 The responsible party paid the freight bill of $75

Jan 8 Returned $600 of merchandise purchased on Jan 2 receiving credit memo

Jan 12 Paid amount owed for January 2

Jan 14 Sold $4,000 of merchandise, 1/10, n/30, FOB Destination. The cost of the merchandise was $1,500

Jan 16 The responsible party paid the freight bill of $50

Jan 24 Collected amount owed from January 14

Jan 29 Sold $2,000 of merchandise, n/30, FOB Shipping Point. The cost of the merchandise was $750

Jan 31 The responsible party paid the freight bill of $50

2. Prepare a multi-step Income Statement for the month of January using the above information and the additional information below:

Sales Salaries $800 Property Taxes $300 Interest Expense $200

Insurance $400 Advertising $700

3. What is the balance in the Inventory account on January 31?