P5-1A

Waters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Waters' ledger showed cash of $8,000 and Common Stock of $8,000.

May

1 Purchased merchandise on account fron Hauke Wholesale Supply for $8,000, terms 1/10, n/30

2 Sold merchandise on account fpr $4,4000, terms 2/10, n/30. The cost of the merchadise sold was $3,300.

5 Recieved credit from Hauke Wholesale Supply for merchandise returned $200.

9 Recieved collections in full, less discounts, from customers billed on May 2.

10 Paid Hauke Wholesale supply in full, less discount

11 Purchased supplies for cash $900

12 Purchased merchandise for cash #3,100

15 Recied $230 refund for return of poor quality merchadise from supplier on cash purchase

17 purchased merchadise from Friedrich Distributors for $2500, terms 2/10, n/30

19 Paid frieght on May 17 purchase $250

24 Sold erchandise for cash $5,500. The cost of te merchandise sold was $4,100

25 Purchased merchandise from Fasteners Inc for $800 term 3/10, n/30

27 Paid Friedrich Distributor in full, less discount

29 Made refunds to cash customers for returned merchandise $124. The returned merchandise had cost $90

31 Sold merchandise on account for $1280, termsn/30. The cost of the merchandise sold was $830

Waters Hardware's chart of accounts includes Cash, Accounts Recievable, Inventory, Supplies, Accpunts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, Sales Discounts, and Cost of Goods sold.

a. Journalize the transactions using a perpetual inventory system

b. Post transactions to T accounts. Enter the beginning cash and common stock balances

c. prepare an income statement through gross profit for the month of May 2014.

d. calculate the profit margin and the gross profit rate asssuming operating expenses were $1400.

pleaseinclude T accounts if possible