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Question The following trial balance pertains to Feazell Hardware as of January 1, 2013. Account Title Debit Credit Cash $ 28,000 Account Receivable 18,000 Merchandise

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The following trial balance pertains to Feazell Hardware as of January 1, 2013.

Account Title

Debit

Credit

Cash

$ 28,000

Account Receivable

18,000

Merchandise Inventory

120,000

Accounts Payable

$ 10,000

Common Stock

140,000

Retained Earnings

16,000

The following events occurred in 2013. Assume that Feazell Hardware uses the periodic inventory system.

  1. Purchased land for $16,000 cash
  2. Purchased merchandise on account for $46,000, terms 2/10 n/30.
  3. The merchandise purchased by Feazell was shipped FOB shipping point for $460 cash.
  4. Returned $4,000 of defective merchandise purchased in Event 2
  5. Sold merchandise for $4,000 cash
  6. Sold merchandise on account for $100,000, terms 1/20 n/30.
  7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
  8. Paid $2,400 cash for selling expenses.
  9. Collected $70,000 of accounts receivable within the discount period.
  10. Collected $24,000 of accounts receivable but not within the discount period.
  11. Paid $6,400 of other operating expenses.
  12. Performed a physical count indicating that $60,000 of inventory was on hand at the end of the accounting period.

Requirements

  1. Record these transactions in a general journal.
  2. Post the transactions to ledger T-accounts.
  3. Prepare a schedule of cost of goods sold, an income statement, a statement of changes in stockholders equity, a balance sheet and a statement of cash flows for 2013.

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