Prepare an income statement through gross profit

Assignment Help Financial Accounting

Reference no: EM1314203

Merchandise Accounting - Trail Balance

At the beginning of the current season on April 1, the ledger of Four Oaks Pro Shop showed Cash $2,500; Merchandise Inventory $3,500; and Common Stock $6,000. These transactions occurred during April 2008.

April 5	Purchased golf bags, clubs, and balls on account from Hardee Co. $2,200, FOB shipping point, terms 2/10, n/60.
7	Paid freight on Hardee Co. purchases $80.
9	Received credit from Hardee Co. for merchandise returned $200.
10	Sold merchandise on account to members $950, terms n/30.
12	Purchased golf shoes, sweaters, and other accessories on account from Arrow Sportswear $460, terms 1/10, n/30.
14	Paid Hardee Co. in full.
17	Received credit from Arrow Sportswear for merchandise returned $60.
20	Made sales on account to members $1,000, terms n/30.
21	Paid Arrow Sportswear in full.
27	Granted credit to members for clothing that did not fit properly $75.
30	Received payments on account from members $1,100.

The chart of accounts for the pro shop includes Cash; Accounts Receivable; Merchandise Inventory; Accounts Payable; Common Stock; Sales; Sales Returns and Allowances; Purchases; Purchase Returns and Allowances; Purchase Discounts, and Freight-in.

Instructions:
(a) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,524.
Note: ( c ) Tot. trial balance $8,254.
Gross profit $463

Reference no: EM1314203

Questions Cloud

Computation of operating cash flows from capital project : Computation of operating cash flows from capital project and evaluating a project which will increase sales by $50,000 and costs by $30,000

Fundamental theorem of calculus : Fundamental theorem of calculus.

Computation and capital budgeting decision based on irr : Computation and capital budgeting decision based on IRR and should the project be accepted if it has been assigned a required return of 9.5%

Computation of operating cash flows : Computation of operating cash flows using givien detials for the year 2006 and using 2005 and 2006 Balance Sheet

Prepare an income statement through gross profit : Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,524. and Tot. trial balance $8,254.

Prepare a trial balance on april 30 : Prepare a trial balance on April 30, 2008 and Tot. trial balance $8,254 - Merchandise Accounting

The equilibrium price and quantity : The equilibrium price and quantity.

Beginning balances in the ledger accounts : Using T accounts enter the beginning balances in the ledger accounts and post the April transactions and Tot. trial balance $8,254. Gross profit $463

Record the journal entries-transaction using the net method : Record the journal entries related to this transaction using the net method of recording purchases and Which method do you prefer? Why?

User Account

All Pages