Question - Tennis Shop showed Cash $2,500; Inventory $1,700; and Common Stock $4,200. The following transactions were completed during April.
Apr. 4 Purchased racquets and balls from Riggs Co. $740, terms 3/10, n/30.
6 Paid freight on Riggs Co. purchase $60.
8 Sold merchandise to customers $900, terms n/30.
10 Received credit of $40 from Riggs Co. for a racquet that was returned.
11 Purchased tennis shoes from King Sports for cash $300.
13 Paid Riggs Co. in full.
14 Purchased tennis shirts and shorts from BJ Sportswear $700, terms 2/10, n/60.
15 Received cash refund of $50 from King Sports for damaged merchandise that was returned.
17 Paid freight on BJ Sportswear purchase $30.
18 Sold merchandise to customers $1,000, terms n/30.
20 Received $500 in cash from customers in settlement of their accounts.
21 Paid BJ Sportswear in full.
27 Granted an allowance of $25 to customers for tennis clothing that did not fit properly.
30 Received cash payments on account from customers $550.
The chart of accounts includes Cash, Accounts Receivable, Inventory, Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Purchase Discounts, and Freight-In.
Instructions
(a) Journalize the April transactions using a periodic inventory system.
(b) Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions.
(c) Make a trial balance on April 30, 2017.
(d) Make an income statement through gross profit, assuming inventory on hand at April 30 is $2,296.