Question 2: M&B Co. is a trading company; its activity is trading in Food Stuff. M&B Co. is using perpetual methods in recoding its daily transactions. The following events took place during February 2018. February 8 M&B Co purchased 70,000 Q.R inventories from Al-Reem, the purchase conditions were 2/10, n/30, and FOB shipping point. 9 10 M&B Co. paid 1,000 QR cash shipping cost against the inventories purchased on 8th of February. M&B Co. sold 30,000 QR inventories to Al-Gharafa Co., the selling conditions were 3/15, n/30, and FOB destination. The products cost is 12,000 Q.R 11 M&B Co. paid 200 Q.R shipping cost. 14 18 It is noticed that parts of the inventories purchased on 8th of February did not meet the specifications. Al-Reem Co. granted price reduction of 6,000 Q.R. M&B Co. paid the amount due to Al-Reem Co. 24 Concerning the problems in the products sold to Al-Gharafa Co., inventories of 5,000 Q.R were retuned, their cost is 2,000 Q.R 25 Al-Gharafa Co.paid the amount due. Requirement: 1) Prepare journal entries that should be recorded in M&B Co.'s books. 2) Prepare income statement for the month ended 28th of February 2018 using the following information: 30,000 Q.R Sale Revenues 5,000 Q.R Sale Returns 750 Q.R Sale discount 10,000 QR Cost of Goods Sold 4,000 QR rent expenses 7,000 Q.R wages expenses 2,000 Q.R Ads 5,000 QR utilities expenses 1,000 QR depreciation expenses