Billy Jean Evert, a former professional tennis star, operates B.J.'s Tennis Shop at the Jackson Lake Resort. At the beginning of the current season, the ledger of B.J.'s Tennis Shop showed Cash \(\$ 2,500\); Merchandise Inventory \(\$ 1,700\); and Common Stock \(\$ 4,200\). These transactions were completed during April:

Apr. 4 Purchased racquets and balls from Robert Co. \(\$ 640\), FOB shipping point, terms \(3 / 10, n / 30\).

6 Paid freight on Robert Co. purchase \(\$ 40\).

8 Sold merchandise to members \(\$ 900\), terms \(n / 30\).

10 Received credit of \(\$ 40\) from Robert Co. for a damaged racquet that was returned.

11 Purchased tennis shoes from Niki Sports for cash \(\$ 300\).

13 Paid Robert Co. in full 14 Purchased tennis shirts and shorts from Martina's Sportswear \(\$ 700\), FOB shipping point, terms \(2 / 10, \mathrm{n} / 60\).

15 Received cash refund of \(\$ 50\) from Niki Sports for damaged merchandise that was returned.

17 Paid freight on Martina's Sportswear purchase \(\$ 30\)

18 Sold merchandise to members \(\$ 800\), terms \(\mathrm{n} / 30\).

20 Received \(\$ 500\) in cash from members in settlement of their accounts 21 Paid Martina's Sportswear in full.

27 Granted credit of \(\$ 30\) to members for tennis clothing that did not fit 30 Sold merchandise to members \(\$ 900\), terms \(\mathrm{n} / 30\).

30 Received cash payments on account from members, \(\$ 500\).

The chart of accounts for the tennis shop includes Cash, Accounts Receivable, Merchandise Inventory, Accounts Payable, Common Stock, Sales, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Purchase Discounts, and Freight-in.

\section*{Instructions}

(a) Journalize the April transactions using a periodic inventory system.

(b) Using \(\mathrm{T}\) accounts, enter the beginning balances in the ledger accounts and post the April transactions.

(c) Prepare a trial balance on April 30, 1998.

(d) Prepare an income statement through Gross Profit, assuming merchandise inventory on hand at April 30 is \(\$ 1,800\).