Water's Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Water's ledger showed Cash of $8,000 and Common Stock of $8,000.

May 1 Purchased mercahndise on account from Hauke Wholesale Supply for $8,000 terms, 1/10, n/30.

May 2 Sold merchandise on account for $4,400, terms 2/10, n/30. The cost of the merchandise sold was $3,300.

May 5 Recieved credit from Hauke Wholesale Supply for merchandise returned of $200.

May 9 Recieved collections in full, less discounts, from customers billed on May 2.

May 11 Paid Hauke Wholesale Supply in full, less discount.

May 12 Purchased supplies for cash $900.

May 12 Pruchased Merchandise for cash $3,100.

May 15 Received $230 refund for return of poor-quality merchandise from supplier on cash purchase.

May 17 Purchased mercahndise from Freidrich Distributors for $2,500, terms 2/10, n/30

May 19 Paid freight on May 17 purchase $250.

May 24 Sold merchandise for cash $5,500. The cost of the merchandise sold was $4,100.

May 25 Purchased merchandise from Fasteners, Inc. for $800, terms 3/10, n/30.

May 27 Paid Freidrich Distributors in full, less discount.

May 29 Made refunds to cash customers for returned merchandise $124. The returned merchandise had a cost of $90.

May 31 Sold merchandise on account for $1280, terms n/30. The cost of the merchandise sold was $830.

Water's Hardwares chart of accounts include:

Cash, A/R, Inventory, Supplies, A/P, Common Stock, Sales Revenue, Sales Returns and Allowances, Sales Discounts, and Cost of Goods Sold

A. Journalize the above May transactions using a perpetual system.

B. Post the transactions to T-accounts. Be sure to enter the beginning cash and common stock balances

C. Prepare an income statement, through Gross Profit for the month of May 2015

D. Calculate the Profit Margina and Gross Profit Rate assuming operating expenses were $1,400.