At the beginning of the current season on April 1, the ledger of Watry’s Pro Shop showed Cash $2,500; Merchandise Inventory $3,500; and Common Stock $6,000. The following transactions were completed during April 2001:

Apr. 5 Purchased golf bags, clubs, and balls on account from Balata Co. $1,700, terms 2/10, n/60.

7 Paid freight on Balata purchase $80.

9 Received credit from Balata Co. for merchandise returned $200.

10 Sold merchandise on account to members $900, terms n/30. The merchandise sold had a cost of $630.

12 Purchased golf shoes, sweaters, and other accessories on account from Arrow Sportswear $660, terms 1/10, 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 n/30. The cost of the merchandise sold was $490.

21 Paid Arrow Sportswear in full.

27 Granted an allowance to members for clothing that did not fit properly $60.

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, and Cost of Goods Sold.

Instructions :

(a) Journalize the April transactions using a perpetual 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, 2001.

(d) Prepare an income statement through gross profit.