SKI EUROPE$*$

Ski Europe sells a wide variety of products and uses the periodic inventory method. During October, the company engaged in the following merchandising transactions. Terms of $\frac{2}{10},\frac{n}{30}$ are offered on all credit sales.

Oct. $3$ Sold merchandise left over from last season to Freight Liquidators for $$32,880$ cash.

Oct. $9$ Sold merchandise on account to Metterhorn Lodge, $$24,820.$

Oct. $12$ Metterhorn Lodge returned $$420$ of merchandise purchased on Oct. $9.$ Full credit was given to Metterhorn Lodge for this return.

Oct. $16$ Purchased merchandise on account from Sports Fashions for $$18,900$; terms, $2/10,$ n$/30.$

Oct. $17$ Paid freight charges on shipment received from Sports Fashions, $$126.$

Oct. $19$ Received a check for $$23,912$ from Metterhorn Lodge in full settlement of the Oct. $9$ sale, less the return on Oct. $12$ and the allowable sales discount.

Oct. $22$ Purchased merchandise on account from Outdoor Products, $$17,100$; terms, $\frac{5}{10},\frac{n}{60}.$

Oct. $24$ Returned defective goods costing $$900$ to Outdoor Products. Received full credit on our account.

Oct. $26$ Paid Sports Fashions for the purchase on Oct. $16,$ less $2\%.$

Required:

a$.$ Prepare journal entries to record these transactions.

b$.$ Prepare a partial income statement for October, showing the accounts included in computing net sales, the cost of goods sold, and gross profit. Assume that inventory was $$31,400$ on September $30,$ and $$33,920$ on October $31.$