Journalize, post, and prepare a

partial income statement.

$(502,3,5,6)$

GLS

P$5-2$B Boone Hardware Store completed the following merchandising transactions in the

month of May. At the beginning of May, the ledger of Boone showed Cash of $$5,000$ and Owner's

Capital of $$5,000.$

May $1$ Purchased merchandise on account from Adewale's Wholesale Supply $$4,200,$ terms

$\frac{2}{10},\frac{n}{30}.$

$2$ Sold merchandise on account $$2,100,$ terms $\frac{1}{10},\frac{n}{30}.$ The cost of the merchandise

sold was $$1,300.$

$5$ Received credit from Adewale's Wholesale Supply for merchandise returned $$300.$

$9$ Received collections in full, less discounts, from customers billed on sales of $$2,100$ on

May $2.$

$10$ Paid Adewale's Wholesale Supply in full, less discount.

$11$ Purchased supplies for cash $$400.$

$12$ Purchased merchandise for cash $$1,400.$

$15$ Received refund for poor quality merchandise from supplier on cash purchase $$150.$

$17$ Purchased merchandise from Agbaje Distributors $$1,300,$ FOB shipping point, terms

$\frac{2}{10},\frac{n}{30}.$

$19$ Paid freight on May $17$ purchase $$130.$

$24$ Sold merchandise for cash $$3,200.$ The merchandise sold had a cost of $$2,000.$

$25$ Purchased merchandise from Somerhalder, Inc. $$620,$ FOB destination, terms $\frac{2}{10},$

$\frac{n}{30}.$

$27$ Paid Agbaje Distributors in full, less discount.

$29$ Made refunds to cash customers for defective merchandise $$70.$ The returned mer$-$

chandise had a fair value of $$30.$

$31$ Sold merchandise on account $$1,000$ terms $\frac{n}{30}.$ The cost of the merchandise sold was

$$560.$

Boone 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$.301$ Owner's

Capital, No$.401$ Sales Revenue, No$.412$ Sales Returns and Allowances, No$.414$ Sales Discounts,

and No$.505$ Cost of Goods Sold.

Instructions

$($a$)$ Journalize the transactions using a perpetual inventory system.

$($b$)$ Enter the beginning cash and capital balances and post the transactions. $($Use J$1$ for the jour$-$

nal reference.$)$

$($c$)$ Prepare an income statement through gross profit for the month of May $2012.$

$($c$)$ Gross profit $$2,379$