Sukulo Stores, Inc. completed the following transactions during the current year, the company’s first year of operations. Sukulo Stores has a December 31 year- end.
1. September 2: Purchased $ 65,000 of merchandise inventory from Texrex Company using a trade note payable. The note is due in three months and carries an 8% annual interest rate.
2. September 21: Purchased $ 391,000 of inventory from various suppliers on account.
3. October 12: Sold merchandise that cost $ 80,000 for $ 128,000 on account.
4. October 16: Sold $ 4,000 of gift cards and received cash.
5. November 16: Paid for all the items purchased on September 21.
6. December 2: Paid off the trade note payable plus interest.
7. December 15: Redeemed gift cards totaling $ 3,500 from customers who purchased merchandise costing $ 2,188.
8. December 31: Used the proportional method to account for breakage. Its estimated breakage rate is 8%.
Required
a. Prepare the journal entries required to record the transactions listed above. Assume a perpetual inventory system is used.
b. Prepare a partial income statement for the current fiscal year.