E5-14 Memories Company commenced operations on July 1. Memories Company uses a periodic in- Record inventory transac- ventory system. During July, Memories Company was involved in the following transactions and events: tions and calculate gross July 2 Purchased $15,000 of merchandise from Suppliers Inc. on account, terms 2/10, n/30, FOB ship- profit-periodic system. ping point. (SO 7) AP 3 Returned $1,200 of merchandise to Suppliers Inc. as it was damaged. Received a credit on account from Suppliers. Paid $500 of freight costs on July 2 shipment. Sold merchandise for $2,000 cash. 11 Paid Suppliers Inc. the full amount owing. 15 Sold merchandise for $6,000 on account, 1/10, n/30, FOB shipping point. 25 Received full payment for the merchandise sold on July 15. 31 Memories did a physical count and determined there was $10,500 of inventory on hand. Instructions (a) Record the transactions in Memories Company's books. (b) What was Memories' gross profit for July? 4 8