P5-7B At the beginning of the current season on April 1, the ledger of Four Oaks Pro Shop showed Cash $2,500; Merchandise Inventory $3,500; and Common Stock $6,000. These transac¬

tions occured during April 2008.

Apr. 5 Purchased golf bags, clubs, and balls on account from Hardee Co. $2,200, FOB shipping point, terms 2/10, n/60.

7 Paid freight on Hardee Co. purchases $80.

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

10 Sold merchandise on account to members $950, terms n/30.

12 Purchased golf shoes, sweaters, and other accessories on account from Arrow Sportswear $460, terms 1/10, n/30.

14 Paid Hardee Co. in full.

17 Received credit from Arrow Sportswear for merchandise returned $60.

20 Made sales on account to members $1,000, terms n/30.

21 Paid Arrow Sportswear in full.

27 Granted credit to members for clothing that did not fit properly $75.

30 Received payments on account from members $1,100.

Journalize, post, and prepare trial balance and partial income statement using periodic approach.

(SO 7, 8)

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.

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. , , T . .

(c) Tot. trial

(c) Prepare a trial balance on April 30,2008. balance $8 254

(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand Gross profit $463 at April 30 is $4,524.