Recording Sale and Purchase Transactions Betasport Company sells a line of sports equipment to retailers. Betasport uses the perpetual inventory system and engaged in the following transactions during April, its first month of operations: a. On April 2, Betasport purchased, on credit, 320 Charlotte S-200 tennis rackets with credit terms of 2/10, n/30. The rackets were purchased at a cost of $30 each. Betasport paid Ellis Transport $150 to transport the tennis rackets from the manufacturer to Betasport's warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on April 2. b. On April 3, Betasport purchased, for cash, 150 packs of tennis balls for $10 per pack. c. On April 4, Betasport purchased tennis clothing, on credit, from Foofoo Sports Fashions. The cost of the clothing was $8,000. Credit terms were 2/10, n/25. d. On April 10, Betasport paid for the purchase of the tennis rackets in Transaction a. e. On April 15, Betasport determined that $500 of the tennis clothing was defective. Betasport returned the defective merchandise to Foofoo Sports Fashions. f. On April 20, Betasport sold 100 tennis rackets at $90 each, 100 packs of tennis balls at $12 per pack, and $4,000 of tennis clothing. All sales were for cash. The cost of the merchandise sold was $5,700. g. On April 23, customers returned $575 of the merchandise purchased on April 20. The cost of the merchandise returned was $300. h. On April 25, Betasport sold another 50 tennis rackets, on credit, for $90 each and 25 packs of tennis balls at $12 per pack, for cash. The cost of the merchandise sold was $2,000. 1. On April 29, Betasport paid Foofoo Sports Fashions for the clothing purchased on April 4 minus the return on April 15. J. On April 30, Betasport purchased 20 tennis bags, on credit, from Bag Designs for $320. The bags were shipped F.O.B. destination and arrived at Betasport on May 3. Required: 2. Assuming operating expenses of $8,500 and income taxes of $758, prepare Betasport's income statement for April. Betasport Company Income Statement For the period ending April 30 Sales 19,000 X Less: Sales returns and allowances X 575 X Net sales x 18,425 X Less: Cost of goods sold X 6,770 X Income before income taxes 11,655 X Operating expense X 8,500 X Net income 3,155 X