At the beginning of the current season on April 1, the ledger of Ilana Pro Shop showed Cash $3,000; Inventory $4,000; and Owner’s Capital $7,000. These transactions occurred during April 2012.
Apr. 5 Purchased golf bags, clubs, and balls on account from Zuleikha Co. $1,200, FOB shipping point, terms 2/10, n/60.
7 Paid freight on Zuleikha Co. purchases $50.
9 Received credit from Zuleikha Co. for merchandise returned $100.
10 Sold merchandise on account to members $600, terms n/30.
12 Purchased golf shoes, sweaters, and other accessories on account from Libby Sportswear $450, terms 1/10, n/30.
14 Paid Zuleikha Co. in full.
17 Received credit from Libby Sportswear for merchandise returned $50.
20 Made sales on account to members $600, terms n/30.
21 Paid Libby Sportswear in full.
27 Granted credit to members for clothing that had flaws $35.
30 Received payments on account from members $600.
The chart of accounts for the pro shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Owner’s Capital, Sales Revenue, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Purchase Discounts, and Freight-in.
Instructions
(a) Journalize the April transactions using a periodic inventory system.
(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April transactions.
(c) Prepare a trial balance on April 30, 2012.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,824.