The following trial balance pertains to Nate's Grocery as of January 1, 2012:

The following events occurred in 2012. Assume that Nate's uses the periodic inventory method.
1. Purchased land for \(\$ 20,000\) cash.
2. Purchased merchandise on account for \(\$ 126,000\), terms \(1 / 10 \mathrm{n} / 45\).
3. Paid freight of \(\$ 1,000\) cash on merchandise purchased FOB shipping point.
4. Returned \(\$ 3,600\) of defective merchandise purchased in Event 2.
5. Sold merchandise for \(\$ 86,000\) cash.
6. Sold merchandise on account for \(\$ 120,000\), terms \(2 / 10 \mathrm{n} / 30\).
7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.

8. Paid \(\$ 11,600\) cash for selling expenses.
9. Collected \(\$ 50,000\) of the accounts receivable from Event 6 within the discount period.
10. Collected \(\$ 60,000\) of the accounts receivable but not within the discount period.
11. Paid \(\$ 6,400\) of other operating expenses.
12. A physical count indicated that \(\$ 27,600\) of inventory was on hand at the end of the accounting period.
Required

a. Record these transactions in a general journal.

b. Post the transactions to ledger T-accounts.

c. Prepare a schedule of costs of goods sold, an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for 2012.

Transcribed Image Text:

Account Title Debit Credit Cash $26,000 Accounts receivable 4,000 Merchandise inventory 50,000 Accounts payable $ 4,000 Common stock 43,000 Retained earnings 33,000 Totals $80,000 $80,000