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