Question $1$

Able Inc. records its inventory using the periodic method. The following accounts relate to Able$$s

purchases and sales for the month of April $20$X$8$:

Account Balance

Freight in $ $1,700$

Purchases $130,000$

Purchase discounts $26,000$

Purchase returns and allowances $15,000$

Sales $240,000$

Sales discounts $7,000$

Sales returns and allowances $32,000$

The trial balance reports inventory at $$17,000.$ An inventory count at April $30,20$X$8$ reports inventory at

a value of $$9,000.$

Required:

$1.$ Prepare a partial Income Statement for Able Inc. through Gross Profit.

$2.$ Prepare the journal entry to allocate purchase$-$related accounts and change in Inventory to cost of Goods Sold