Question

At the beginning of the current season on April 1, the ledger of Kokott Pro Shop showed Cash $3,800; Inventory $4,300; and Common Stock $8,100. These transactions occurred during April 2017.Apr. 5 Purchased golf bags, clubs, and balls on account from Hogan Co. $1,300, FOB shipping point, terms 2/10, n/60.7 Paid freight on Hogan Co. purchases $50.9 Received credit from Hogan Co. for merchandise returned $100.10 Sold merchandise on account to customers $880, terms n/30.12 Purchased golf shoes, sweaters, and other accessories on account from Duffer Sportswear $750, terms 1/10, n/30.14 Paid Hogan Co. in full.17 Received credit from Duffer Sportswear for merchandise returned $50.20 Made sales on account to customers $880, terms n/30.21 Paid Duffer Sportswear in full.27 Granted credit to customers for clothing that had flaws $30.30 Received payments on account from customers $880. The chart of accounts for the pro shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Purchase Discounts, and Freight-In.Required:
1: Journalize the April transactions using a periodic inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)2: Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions. (Post entries in the order of journal entries presented in the previous question.)3: Prepare a trial balance on April 30, 2017.4: Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $5,469.

Answer 1

Answer:

Explanation:

1. Journal entries for the month of April 2017

Apr.5

Dr Inventory 1300

Cr Accounts Payable  1300

(Purchase of goods on account from Hogan)  

Apr.5

Dr Inventory 50  

Cr Cash  50

(Freight charges on purchases)  

Apr.9

Dr Accounts Payable 100  

Cr Inventory  100

(Credit received for returned goods from Hogan)  

Apr.10

Dr Accounts Receivable 880  

Cr Sales  880

(Sales of goods on account)  

Apr.12

Dr Inventory 750  

Cr Accounts Payable  750

(Purchase of goods on account from Duffer)  

Apr.14

Dr Accounts Payable 1200  

Cr Cash  1176

Cr Inventory  24

(Payment made to Hogan in full)  

Apr.17

Dr Accounts Payable 50  

Cr Inventory  50

(Credit received for returned goods from Duffer)  

Apr.20

Dr Accounts Receivable 880  

Cr Sales  880

(Sales of goods on account)  

Apr.21

Dr Accounts Payable 700  

Cr Cash  693

Cr Inventory  7

(Payment made to Duffer in full)  

Apr.27

Dr Sales 30  

Cr Accounts Receivable  30

(Credit granted to customers for flaws in goods)  

Apr.30

Dr Cash 850  

Cr Accounts Receivable  850

(Payment received from custmers on account)

2. T accounts calculation is attached with this answer

3. KOKOTT PRO SHOP

Trial balance as at April 30, 2017

Account                      Debit            Credit

Cash                      2731  

Accounts Receivable  6219  

Inventory               880  

Common Stock                       8100

Sales                                       1730

T o t a l                       9830              9830

4. KOKOTT PRO SHOP

Income statement for the month ending April 30, 2017

Sales Revenue 1730

Cost of goods sold (6,219 - 5,469) 750

Gross profit 980

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