eBook References Claypool Hardware is the only hardware store in a remote area of northern Minnesota. Some of Claypool's transactions during the current year are as follows. Nov.5 Sold lumber on account to Benidji Construction, $13,390. The inventory subsidiary ledger shows the cost of this merchandi was 59,105. Nov.9 Purchased tools on account from Owatonna Tool Company, $3,800. Dec.s Collected in cash the $13,390 account receivable from Benidji Construction Dec.9 Paid the 53,500 owed to Owatonna Tool Company. Dec. 31 Claypool's personnel counted the inventory on hand and determined its cost to be $182,080. The accounting records, however indicate Inventory of $183,799 and a cost of goods sold of 5695,222. The physical count of the inventory was observed by company's auditors and is considered correct. Assume that an index of key business ratios in your library shows hardware stores of Claypool's approximate size (in total assets) average net sales of $1 million per year and a gross profit margin of 25 percent Required: a. Prepare journal entries to record these transactions and events in the accounting records of Claypool Hardware. (The company us a perpetual inventory system.) b. Prepare a partial income statement showing the company's gross profit for the year. (Net sales for the year amount to $1,024,900.) C. Claypool purchases merchandise inventory at the same wholesale prices as other hardware stores. Due to its remote location, however, the company must pay between $18,000 and $20,000 per year in extra transportation charges to receive delivery of merchandise. (These additional charges are included in the amount shown as cost of goods sold) d. Does the business appear to suffer or benefit financially from its remote location