Question 4

Ivanhoe Company commenced operations on July 1. Ivanhoe Company uses a periodic inventory system. During July, Ivanhoe Company was involved in the following transactions and events:

July 2 Purchased $14,200 of merchandise from Suppliers Inc. on account, terms 2/10, n/30, FOB shipping point.

3Returned $1,200 of merchandise to Suppliers Inc. as it was damaged. Received a credit on account from Suppliers.

4Paid $600 of freight costs on July 2 shipment.

8Sold merchandise for $2,500 cash.

11Paid Suppliers Inc. the full amount owing.

15Sold merchandise for $7,000 on account, 1/10, n/30, FOB shipping point.

25Received full payment for the merchandise sold on July 15.

31Ivanhoe did a physical count and determined there was $10,100 of inventory on hand.

a) Make the transactions in Ivanhoe Company's books. (Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

b) Make a partial multiple-step income statement, up to gross profit, for the month of July 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)