In a two$-$column general journal, record the accounting entries for the following selected transactions Industrial Supply owned by Johnston Lem. Industrial Supply uses the periodic inventory system and does not use returns and allowances accounts. Choose your own account names. $(7$ marks$)$

Transactions

May

$1$ Sales Invoice

No$.501,$ to Hewitt Construction for the sale of merchandise on account, $$656\mathrm{.}00$ plus HST of $$45\mathrm{.}92,$ total $$701\mathrm{.}92$

$5$ Purchase Invoice

From EMJ Steel Inc., No$.702,$ for merchandise for resale, $$1072\mathrm{.}14$ plus HST of $$75\mathrm{.}05,$ total $$1147\mathrm{.}19$

$8$ Credit Invoice Received

From Great Lakes Wood Products, No$.702,$ allowance for defective goods, $$585\mathrm{.}00$ plus HST of $$40\mathrm{.}95,$ total $$625\mathrm{.}95$

$9$ Sales Invoice

No$.502,$ to Northern Contacting, for sale of merchandise on account, $$846\mathrm{.}00$ plus HST of $59\mathrm{.}22,$ total $$905\mathrm{.}22$

$15$ Credit Invoice Issued

No$.503,$ to Precision Instruments, for unsatisfactory goods returned, $$600\mathrm{.}00$ plus HST of $$42\mathrm{.}00,$ total $$642\mathrm{.}00$

$19$ Cash Sales Slip

No$.12520,$ to Quality Carpeting for the cash sale of merchandise, $$102\mathrm{.}50$ plus HST of $$7\mathrm{.}18,$ total $$109\mathrm{.}68$

$26$ Purchase Invoice

From Pacific Transport, No$.371,$ for transportation charges on incoming merchandise, $$896\mathrm{.}50$ plus HST of $$62\mathrm{.}76,$ total $$959\mathrm{.}26$

The statement on the second sheet of the template shows the operation for two successive years.

In the template, fill in the blanks to complete the statement $(8$ marks$)$

Suppose that, on December $31,20-1,$ the merchandise inventory was miscounted. Instead of $$25000$ as shown it was incorrectly counted as $$21000.$ What effect would this understatement have on the net income figure for $20-1?(1$ mark$)$

What effect, if any, would the above$-$noted error have on the balance sheet for $20-1(1$ mark$)$