Enter the beginning balances in the ledger accounts

Reference no: EM131827101

Question: At the beginning of the current season on April 1, the ledger of Granite Hills Pro Shop showed Cash $2,500, Inventory $3,500, and Common Stock $6,000. The following transactions were completed during April 2017. Apr.

5 Purchased golf bags, clubs, and balls on account from Arnie Co. $1,500, terms 3/10, n/60.

7 Paid freight on Arnie purchase $80. 9 Received credit from Arnie Co. for merchandise returned $200. 10 Sold merchandise on account to members $1,340, terms n/30. The merchandise sold had a cost of $820.

12 Purchased golf shoes, sweaters, and other accessories on account from Woods Sportswear $830, terms 1/10, n/30.

14 Paid Arnie Co. in full.

17 Received credit from Woods Sportswear for merchandise returned $30.

20 Made sales on account to members $810, terms n/30. The cost of the merchandise sold was $550.

21 Paid Woods Sportswear in full.

27 Granted an allowance to members for clothing that did not fi t properly $80.

30 Received payments on account from members $1,220. The chart of accounts for the pro shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, and Cost of Goods Sold.

Instructions: (a) Journalize the April transactions using a perpetual inventory system.

(b) Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions.

(d) Prepare an income statement through gross profit for the month of April 2017.

Reference no: EM131827101

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