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Ex 2. Metal Music Ltd is a retail store specialising in musical instruments and consumables for rock and metal musicians. It uses a perpetual inventory

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Ex 2. Metal Music Ltd is a retail store specialising in musical instruments and consumables for rock and metal musicians. It uses a perpetual inventory system.At the beginning of February 2010, the ledger of Metal Music Ltd showed Cash $2,500; Inventory $1,700; and Share Capital $4,200. The following transactions were completed during February: Feb. 6 Purchased electric guitars from Guitars R Us Ltd $840, terms 3/7, n/30. Paid freight on Guitars R Us Ltd purchase $40. Sold inventory to customers $900, terms n/30. The inventory cost $600. 10 Received credit of $84 from Guitars R Us Ltd for a guitar that was returned. 11 Purchased guitar strings from Strings N Things for cash $300. 13 Paid Guitars R Us Ltd in full. 14 Purchased Guitar straps and leads from Musical Importers Ltd $500, terms 2/7, n/60. 15 Received credit of $50 from Musical Importersfor damaged inventory that was returned. 17 Paid freight on Musical Importers Ltd purchase $30. 18 Sold inventory to customers $900, terms n/30. The cost of the inventory was $530. 20 Received $500 in cash from customers in settlement of their accounts. 21 Paid Musical ImportersLtd in full. 27 Granted an allowance of $30 to a customer for a guitar strap that was faulty. 28 Received cash payments on account from customers $500. The chart of accounts for Metal Music Ltd includes Cash, Accounts Receivable, Inventory, Accounts Payable, Share Capital, Sales, Sales Returns and Allowances, and Cost of Goods Sold. (NB: Freight-in is debited to the Inventory account as a separate Freight-in account is not used) Required: (a) Journalise the February transactions. (b) Using T accounts, enter the beginning balances in the ledger accounts and post the April transactions (c) Prepare a trial balance on 28 February 2010. (d) Prepare an income statement up to Gross Profit

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