At the beginning of the current season, the ledger of Kids Sportstore Ltd showed Cash of $5250;
Question:
At the beginning of the current season, the ledger of Kids Sportstore
Ltd showed Cash of $5250; Inventory of $3570; and Share Capital of $8820. The following transactions were completed in October 2016.
Oct. 4 Purchased bats and balls from Robert & Co. $1974, FOB shipping point, terms 3/7, n/30.
6 Paid freight on Robert & Co. purchases $84.
8 Sold inventory to customers for $1890, terms n/30.
10 Received credit of $84 from Robert & Co. for a damaged bat that was returned.
11 Purchased cricket shoes from Niki Sports for cash $1260.
11 Paid Robert & Co. amount due.
14 Purchased shirts and shorts from Cash's Sportswear $1050, FOB shipping point, terms 2/7, n/60.
15 Received cash refund of $105 from Niki Sports for damaged inventory that was returned.
17 Paid freight on Cash's Sportswear purchase $63.
18 Sold inventory $1680, terms n/30.
20 Received $1050 in cash from customers in settlement of their accounts.
20 Paid Cash's Sportswear amount due.
27 Granted credit of $63 for clothing that did not fit.
30 Sold inventory to customers $1890, terms n/30.
30 Customers paid amounts owing on accounts, $1050.
The chart of accounts for Kids Sports store Ltd includes Cash, Accounts Receivable, Inventory, Accounts Payable, Share Capital, Sales, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Discount Received, and Freight-in.
Required
a. Journalise the October transactions using a periodic inventory system.
b. Using T accounts, enter the beginning balances in the ledger accounts and post the October transactions.
c. a trial balance as of 31 October 2016.
d. Journalise the closing entries.
e. a statement of profit or loss up to gross profit, assuming inventory on hand on 31 October is $3780.
Financial Accounting Reporting Analysis And Decision Making
ISBN: 9780730313748
5th Edition
Authors: Shirley Carlon, Rosina Mladenovic Mcalpine, Chrisann Palm, Lorena Mitrione, Ngaire Kirk, Lily Wong