P5-7a at the beginning of the current season, the ledger of village

ACC 280 P5-7A At the beginning of the current season, the ledger of Village Tennis Shop

 

ACC 280 P5-7A Village Tennis Shop

 

P5-7A At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Common Stock $4,200. The following transactions were completed during April.

 

Apr. 4 Purchased racquets and balls from Denton Co. $740, terms 3/10, n/30.

6 Paid freight on Denton Co. purchase $60.

8 Sold merchandise to members $900, terms n/30.

10 Received credit of $40 from Denton Co. for a damaged racquet that was returned.

11 Purchased tennis shoes from Newbee Sports for cash $300.

13 Paid Denton Co. in full.

14 Purchased tennis shirts and shorts from Venus’s Sportswear $600, terms 2/10, n/60.

15 Received cash refund of $50 from Newbee Sports for damaged merchandise that was returned.

17 Paid freight on Venus’s Sportswear purchase $30.

18 Sold merchandise to members $1,000, terms n/30.

20 Received $500 in cash from members in settlement of their accounts.

21 Paid Venus’s Sportswear in full.

27 Granted an allowance of $30 to members for tennis clothing that did not fit properly.

30 Received cash payments on account from members $500.

 

The chart of accounts for the tennis 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) 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) Prepare a trial balance on April 30, 2008.

(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $2,296.

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