Larkspur, Inc. completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Larkspur, Inc. showed Cash of $5,500 and Common Stock of $5,500 May 1 Purchased merchandise on account from Gray's Wholesale Supply $3,800, terms 2/10, n/30 2 Sold merchandise on account $2,500, terms 1/10, n/30. The cost of the merchandise sold was $1,600 5 Received credit from Gray's Wholesale Supply for merchandise returned $250 9 Received collections in full, less discounts, from customers billed on sales of $2,500 on May 2 10 Paid Gray's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $300 12 Purchased merchandise for cash $1,300 15 Received refund for poor quality merchandise from supplier on cash purchase $200 17 Purchased merchandise from Amland Distributors $1,200, FOB shipping point, terms 2/10, n/30 19 Paid freight on May 17 purchase $140 24 Sold merchandise for cash $3,300. The merchandise sold had a cost of $2,100 25 Purchased merchandise on account from Horvath, Inc. $600, FOB destination, terms 2/10, n/30 27 Paid Amland Distributors in full, less discount 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of 20 31 Sold merchandise on account $1,500, terms n/30. The cost of the merchandise sold was $600 Larkspur, Inc. 's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter "O" for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit To record credit sale) (To record cost of merchandise sold) May 9 To record cash sale) (To record cost of merchandise sold) (To record merchandise returned) (To record cost of merchandise returned) Enter the beginning cash and common stock balances and post the transactions. (Post entries in the order of journal entries presented in the previous Cash No. 101 Date Explanation Ref. Debit Credit Balance Balance J1 J1 J1 J1 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance J1 No. 120 Inventory Date Explanation Ref. Debit Credit Balance J1 J1 J1 Supplies No. 126 DateExplanation Ref. Debit Credit Balance Accounts Payable No. 201 DateExplanation Ref. Debit Credit Balance J1 J1 Common Stock No. 311 Date Explanation Retf. Debit Credit Balance Balanoe Sales Revenue No. 401 Date Explanation Ref. Debit Credit Balance J1 Sales Returns and Allowances No. 412 Date Explanation Ref. Debit Credit Balance Sales Discounts No. 414 Date Explanation Ref. Debit Credit Balance Cost of Goods Sold No. 505 Date Explanation Ref. Debit Credit Balance J1 SHOW LIST OF ACCOUNTS Prepare an income statement through gross profit for the month of May 2019. Larkspur, Inc. Income Statement (Partial)
