Piper Specialty Store Ltd. completed the following merchandising transactions in the month of May 2018. At the beginning of May, Piper Specialty Store’s ledger showed Cash $7,400; Accounts Receivable $1,600; Inventory $3,100; Common Shares $8,700; and Retained Earnings $3,400. Piper Specialty Store uses a perpetual inventory system.
May1Purchased merchandise on account from Depot Wholesale Supply Ltd. for $6,200, terms 1/10, n/30, FOB shipping point.
3Freight charges of $140 were paid by the appropriate party on the merchandise purchased on May 1.
4Sold merchandise on account to Yip Company for $3,100, terms 2/10, n/30, FOB destination. The cost of the merchandise was $2,100.
7Freight charges of $70 were paid by the appropriate party on the May 4 sale.
8Received a $200 credit from Depot Wholesale Supply when merchandise was returned.
9Paid Depot Wholesale Supply in full.
11Purchased supplies for $400 cash.
14Received payment in full from Yip Company for merchandise sold on account on May 4.
15Collected $1,100 of the accounts receivable outstanding at the beginning of the month. All accounts were originally sold on terms of n/30, with no sales discounts.
18Purchased merchandise from Harlow Distributors Inc. for $2,000, terms n/30, FOB destination.
21Freight of $40 was paid by the appropriate party on the May 18 purchase of merchandise.
22Sold merchandise to various customers for $7,200 cash. The cost of the merchandise was $3,900.
29Paid a $100 cash refund to customers for returned merchandise. The cost of the returned merchandise was $60. It was restored to inventory.
31A physical inventory count was taken and determined that there was $4,800 of inventory on hand. Prepare any adjustment required.



Record the May transactions.

Set up T accounts, enter the opening balances, and post the transactions.

Prepare a partial multiple-step income statement for the month ended May 31, through to gross profit.

Prepare the current assets section of the statement of financial position as at May 31 .

Answer rating: 100% (QA)

Merchandising accounting refers to the specialized branch of accounting that focuses on businesses engaged in buying and selling goods for profit Merchandising companies also known as retailers or who... View the full answer