LAKESHORE TEA COMPANY: MERCHANDISING OPERATIONS

Lakeshore Tea Company Inc. $($Lakeshore$)$ was launched by Anna Davisin $2019.$ The company operated as an herbal tea processor and supplier in Mississauga, Ontario. Davis imported herbs and tea leaves from a variety of sources across the globe. Over its first two years of operations, Lakeshore experienced significant growth and began supplying a variety of restaurants, health food stores, and small grocery outlets in the Greater Toronto Area. Apart from small orders from friends and family, which were usually paid for in cash, all of Lakeshore's sales were made on credit. Payment terms for all credit sales were $3/8,$ net $30\mathrm{.}1$ Davis totalled cash sales and prepared the company's financial statements on a monthly basis$\mathrm{.}2$

Lakeshore's April $30,2021,$ statement of financial position included the following selected account balances:$3$

Accounts Receivable

$ $4,469$

Inventory

$5,927$

Accounts Payable

$3,902$

During May $2021,$ Davis recorded the following notes aboutLakeshore's transactions:$4$

May $1$ Great Lakes Grocer purchased a large quantity of Lakeshore's product for $$2,834,$ on credit.

May $3$ Email received from Great Lakes Grocery with a complaint that multiple packages were improperly sealed. Agreed to reduce Great Lakes Grocery's account by $$230.$

May $4$ Ordered supply of tea leaves from Mangrove TradingCo. in Colombo, Sri Lanka. The order totaled $$4,765$ with terms of $10$ EOM, FOB Mississauga.

May $5$ Received $$2,256$ payment from Credit Valley Health$-$Mart for goods purchased on credit on April $24,2021.$