Reference no: EM132745087

Make Journal entries for the following transactions for the Hat Store:

3/1 Hat Store buys hats on account for $4,400 from a distributor with terms FOB shipping point

3/2 Paid freight on the purchase from 3/1 cash $100

3/5 Sold 20 hats to a baseball team for $600 on account 3/10 net 30. The cost of the hats was $200

3/6 Hat store returned 3 damaged hats, related to 3/1 purchase and received a $200 credit

3/8 Paid the distributor for the purchase in # 1 in full and took the discount. Remember to subtract the discount..

3/8 Hat store bought more hats for $5,500, cash. No freight cost

3/9 Received payment from the customer for merchandise sold on 3/5. Customer took the discount.

3/9 Hat store sold 50 hats for 1200 cash. Terms are FOB destination. The cost of the 50 hats was $500

3/10 The Hat store paid freight on the 3/9 sale $100 cash

3/11 Customer from 3/9 sale returned 5 hats and we gave them cash back of $120. The cost on those hats was $50

Problem 1: For the above transactions how will you make a Income statement for March just down to the Gross Profit?