Chi Chi Ramos, a former professional golfer, operates Chi Chi's Pro Shop at Bay Golf Course. At the beginning of the current season on April 1, the ledger of Chi Chi's Pro Shop showed Cash \(\$ 2,500\); Merchandise Inventory \(\$ 3,500\); and Common Stock \(\$ 6,000\). These transactions occurred during April:

Apr. 5 Purchased golf bags, clubs, and balls on account from Balata Co. \(\$ 1,600\), FOB shipping point, terms \(2 / 10, \mathrm{n} / 60\).

7 Paid freight on Balata Co. purchases \(\$ 80\).

9 Received credit from Balata Co. for merchandise returned \(\$ 100\).

10 Sold merchandise on account to members \(\$ 900\), terms \(n / 30\).

12 Purchased golf shoes, sweaters, and other accessories on account from Arrow Sportswear \(\$ 660\), terms \(1 / 10, \mathrm{n} / 30\).

14 Paid Balata Co. in full.
17 Received credit from Arrow Sportswear for merchandise returned \(\$ 60\).
20 Made sales on account to members \(\$ 700\), terms \(\mathrm{n} / 30\).
21 Paid Arrow Sportswear in full.
27 Granted credit to members for clothing that did not fit \(\$ 30\).
30 Made cash sales \(\$ 600\).
30 Received payments on account from members \(\$ 1,100\).
The chart of accounts for the pro 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 \(\$ 4,200\).