The Bike and Hike Outlet is a retail store. Transactions involving purchases and cash payments for the firm during June 20X1 are listed below, as are the general ledger accounts used to record these transactions. GENERAL LEDGER ACCOUNTS 101 Cash 131 Equipment 201 Notes payable Accounts payable 205 501 Purchases 503 Purchases ret. and allow. Purchases discounts 504 611 Rent expense 614 Salaries expense 617 Telephone expense $20,200 Dr. 61,000 Dr. 4,930 Cr. DATE TRANSACTIONS June 1 Issued Check 1101 for $2,900 to pay the monthly rent. 3 5 7 8 12 15 Purchased merchandise for $3,100 from Perfect Fit Shoe Shop, Invoice 746, dated June 1; the terms are 2/10, n/30. Purchased new store equipment for $5,000 from Middleton Company, Invoice 9067 dated June 4, net payable in 30 days. Issued Check 1102 for $1,520 to Leisure Wear Clothing Company, a creditor, in payment of Invoice 3342 of May 9. Issued Check 1103 for $2,793 to Perfect Fit Shoe Shop, a creditor, in payment of Invoice 746 dated June 1 ($2,850), less a cash discount ($57). Purchased merchandise for $2,175 from Juandas Coat Shop, Invoice 9922, dated June 9, net due and payable in 30 days. Issued Check 1104 for $233 to pay the monthly telephone bill. 18 Received Credit Memorandum 203 for $675 from Juandas Coat Shop for defective goods that were returned; the original purchase was made on Invoice 9922 dated June 9. 21 Purchased new store equipment for $10,000 from Warren Company; issued a three-month promissory note with interest at 10 percent. 23 25 28 30 Purchased merchandise for $5,900 from The Motor Speedway, Invoice 1927, dated June 20; terms of 2/10, n/30. Issued Check 1105 for $1,375 to Juandas Coat Shop, a creditor, as payment on account, Invoice 7416 dated May 28. Issued Check 1106 for $5,782 to The Motor Speedway, a creditor, in payment of Invoice 1927 of June 20 ($5,900), less a cash discount ($118). Purchased merchandise for $2,030 from Jogging Shoes Store, Invoice 4713, dated June 26; the terms are 1/10, n/30. 30 Issued Check 1107 for $5,300 to pay the monthly salaries of the employees. Required: 1. Open the general ledger accounts and enter the balances as of June 1, 20X1. 2. Record the transactions in a purchases journal, a cash payments journal, and a general journal. 3. Post the entries from the general journal and from the Other Accounts Debit section of the cash payments journal to the proper general ledger accounts. 4. Post the column totals from the special journals to the general ledger. 5. Show how the firm's net cost of purchases would be reported on its income statement for the month ended June 30.