Chi Chi Ramos, a former professional golf star, operates Chi Chi's Pro Shop at Bay Golf Course. At the beginning of the current season on April 1, the ledger of Chi Chi's Pro Shop showed Cash \(\$ 2,500\), Merchandise Inventory \(\$ 3,500\), and Common Stock \(\$ 6,000\). The following transactions were completed during April.

Apr. 5 Purchased golf bags, clubs, and balls on account from Balata Co. \(\$ 1,600\), FOB shipping point, terms \(2 / 10, \mathrm{n} / 60\).

7 Paid freight on Balata purchase \(\$ 80\).

9 Received credit from Balata Co. for merchandise returned \(\$ 100\).

10 Sold merchandise on account to members \(\$ 900\), terms \(\mathrm{n} / 30\).

12 Purchased golf shoes, sweaters, and other accessories on account from Arrow Sportswear \(\$ 660\), terms \(1 / 10, \mathrm{n} / 30\).

14 Paid Balata Co. in full.
17 Received credit from Arrow Sportswear for merchandise returned \(\$ 60\).
20 Made sales on account to members \(\$ 700\), terms \(\mathrm{n} / 30\).
21 Paid Arrow Sportswear in full.
27 Granted credit to members for clothing that did not fit \(\$ 30\).
30 Made cash sales \(\$ 600\).
30 Received payments on account from members \(\$ 1,100\).
The chart of accounts for the pro shop includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Merchandise Inventory, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales, No. 412 Sales Returns and Allowances, No. 510 Purchases, No. 512 Purchase Returns and Allowances, No. 514 Purchase Discounts, No. 516 Freight-in.
\section*{Instructions}

(a) Journalize the April transactions using a periodic inventory system.

(b) Enter the beginning balances in the ledger accounts and post the April transactions. (Use J1 for the journal reference.)

(c) Prepare a trial balance on April 30, 1998.

(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is \(\$ 4,200\).