Problem 5 2A Sunland Company completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Sunland Company showed Cash of $4,500 and Common Stock of $4,500. May 1 Purchased merchandise on account from Gray's Wholesale Supply $4,000, terms 2/10, n/30 2 Sold merchandise on account $1,700, 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 5250 9 Received collections in full, less discounts, from customers billed on sales of $1,700 on May 2. 10 Pald Gray's Wholesale Supply In ful, less discount. 11 Purchased supplies for cash 5350 12 Purchased merchandise for cash $1,200 15 Recelved refund for paor quality merchandise from supplier on cash purchase $200. 17 Purchased merchandise from Amland Distributors s1,100, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $160 24 Sold merchandise for cash $3,300. The merchandise sold had a cost of $2,000 25 Purchased merchandise on account from Horvath, Inc. $650, FOB destination, terms 2/10, n/30. 27 Paid Amland Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $60. The returned merchandise had a fair value of $40. 31 Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $600. Sunland Company 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