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P 5 . 2 ( LO 2 , 3 , 5 ) , AP Financial Statement Renner Hardware Store completed the following merchandising transactions in
PLO AP Financial Statement Renner Hardware Store completed the following merchandising
transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash
of $ and Owners Capital of $
May Purchased merchandise on account from Brauns Wholesale Supply for $ terms
n
Sold merchandise on account $ terms n The cost of the merchandise sold
was $
Received credit from Brauns Wholesale Supply for merchandise returned $
Received collections in full, less discounts, from customers billed on May
Paid Brauns Wholesale Supply in full, less discount.
Purchased supplies for cash $
Purchased merchandise for cash $
Received $ refund for return of poorquality
merchandise from supplier on cash
purchase.
Purchased merchandise on account from Valley Distributors for $ terms n
FOB shipping point.
Paid freight on May purchase $
Sold merchandise for cash $ The merchandise sold had a cost of $
Purchased merchandise on account from Lumley, Inc. for $ terms n
Paid Valley Distributors in full, less discount.
Made refunds to cash customers for returned merchandise $ The returned merchandise
cost $
Sold merchandise on account for $ terms n The cost of the merchandise sold
was $
Renner Hardwares chart of accounts includes the following: No Cash, No Accounts Receivable,
No Inventory, No Supplies, No Accounts Payable, No Owners Capital, No
Sales Revenue, No Sales Returns and Allowances, No Sales Discounts, and No Cost of
Goods Sold.
Instructions
a Journalize the transactions using a perpetual inventory system.
b Enter the beginning cash and capital balances and post the transactions. Use J for the journal
reference.
c Prepare an income statement through gross profit for the month of May
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