At the beginning of the current season on April 1, the ledger of Flint Hills Pro Shop showed :...
Question:
At the beginning of the current season on April 1, the ledger of Flint Hills Pro Shop showed :
| Cash | $2,610 |
| Inventory | $3,500 |
| Common Stock | $6,110. |
The following transactions were completed during April 2014.
| Apr. 5 | Purchased golf bags, clubs, and balls on account from Akers Co. $2,400, terms 2/10, n/60. |
| 7 | Paid freight on Akers purchase $80. |
| 9 | Received credit from Akers Co. for merchandise returned $400. |
| 10 | Sold merchandise on account to members $1,450, terms n/30. The merchandise sold had a cost of $780. |
| 12 | Purchased golf shoes, sweaters, and other accessories on account from Palmer Sportswear $870, terms 2/10, n/30. |
| 14 | Paid Akers Co. in full. |
| 17 | Received credit from Palmer Sportswear for merchandise returned $70. |
| 20 | Made sales on account to members $980, terms n/30. The cost of the merchandise sold was $550. |
| 21 | Paid Palmer Sportswear in full. |
| 27 | Granted an allowance to members for clothing that did not fit properly $90. |
| 30 | Received payments on account from members $1,500. |
1. Journalize the April transactions using a perpetual inventory system.
(Credit account titles are automatically indented when amount is entered. Do not indent manually. 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.
3. Prepare a trial balance on April 30, 2014.
4. Prepare an income statement through gross profit for the month of April 2014.
T-Accounts:
T-Accounts, which are also called ledger accounts, show the debit and credit balances of all accounts. It displays the detailed increase or decrease in each account as a result of each accounting transaction. Just like the trial balance, the ending balance of each of the ledger accounts is also summarized and the net balance is reported. The said account will then be used in preparing the trial balance.
Answer and Explanation: 1
1. Journalize the April transactions using a perpetual inventory system.
(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
| Date | Account | Debit | Credit |
| April 5 | Inventory | 2,400 | |
| Accounts Payable | 2,400 | ||
| To record the purchase of golf bags, clubs and balls. |
| Date | Account | Debit | Credit |
| April 7 | Inventory | 80 | |
| Cash | 80 | ||
| To record the payment of freight in. |
| Date | Account | Debit | Credit |
| April 9 | Accounts Payable | 400 | |
| Inventory | 400 | ||
| To record the amount of merchandise returned. |
| Date | Account | Debit | Credit |
| April 10 | Accounts Receivables | 1,450 | |
| Sales | 1,450 | ||
| To record the sale of merchandise on account. |
| Date | Account | Debit | Credit |
| April 10 | Cost of Goods Sold | 780 | |
| Inventory | 780 | ||
| To record the cost of inventory sold. |
| Date | Account | Debit | Credit |
| April 12 | Inventory | 870 | |
| Accounts Payable | 870 | ||
| To record the purchase of golf shoes, sweaters and other accessories. |
| Date | Account | Debit | Credit |
| April 14 | Accounts Payable | 2,000 | |
| Cash | 1,960 | ||
| Inventory | 40 | ||
| To record the payment to Akers Co. |
| Date | Account | Debit | Credit |
| April 17 | Accounts Payable | 70 | |
| Inventory | 70 | ||
| To record the return of merchandise. |
| Date | Account | Debit | Credit |
| April 20 | Accounts Receivables | 980 | |
| Sales | 980 | ||
| To record the sale of merchandise. |
| Date | Account | Debit | Credit |
| April 20 | Cost of Goods Sold | 550 | |
| Inventory | 550 | ||
| To record the cost of inventory sold. |
| Date | Account | Debit | Credit |
| April 21 | Accounts Payable | 800 | |
| Cash | 784 | ||
| Inventory | 16 |
| Date | Account | Debit | Credit |
| April 27 | Sales Allowance | 90 | |
| Accounts Receivables | 90 | ||
| To record the sales allowance given to members. |
| Date | Account | Debit | Credit |
| April 30 | Cash | 1,500 | |
| Accounts Receivables | 1,500 | ||
| To record the collection of receivables. |
2. Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions.
| Account | Debit | Credit |
| Cash | 2,610 | |
| April 7 | 80 | |
| April 14 | 1,960 | |
| April 21 | 784 | |
| April 30 | 1,500 | |
| Balance | 1,286 |
| Account | Debit | Credit |
| Inventory | 3,500 | |
| April 5 | 2,400 | |
| April 7 | 80 | |
| April 9 | 400 | |
| April 10 | 780 | |
| April 12 | 870 | |
| April 14 | 40 | |
| April 17 | 70 | |
| April 20 | 550 | |
| April 21 | 16 | |
| Balance | 4,994 |
| Account | Debit | Credit |
| Common Stock | 6,110 | |
| Balance | 6,110 |
| Account | Debit | Credit |
| April 5-Accounts Payable | 2,400 | |
| April 9 | 400 | |
| April 10 | 870 | |
| April 14 | 2,000 | |
| April 17 | 70 | |
| April 21 | 800 | |
| Balance | 0 |
| Account | Debit | Credit |
| April 10-Accounts Receivables | 1,450 | |
| April 20 | 980 | |
| April 27 | 90 | |
| April 30 | 1,500 | |
| Balance | 840 |
| Account | Debit | Credit |
| April 10-Sales | 1,450 | |
| April 20 | 980 | |
| Balance | 2,430 |
| Account | Debit | Credit |
| April 10-Cost of Goods Sold | 780 | |
| April 20 | 550 | |
| Balance | 1,330 |
| Account | Debit | Credit |
| April 27-Sales Allowance | 90 | |
| Balance | 90 |
3. Prepare a trial balance on April 30, 2014.
Flint Hills Pro Shop
Trial Balance
For the Month Ended April 30, 2014
| Account | Debit | Credit |
| Cash | 1,286 | |
| Accounts Receivables | 840 | |
| Inventory | 4,994 | |
| Common Stock | 6,110 | |
| Sales | 2,430 | |
| Cost of Goods Sold | 1,330 | |
| Sales Allowance | 90 | |
| Total | 8,540 | 8,540 |
4. Prepare an income statement through gross profit for the month of April 2014.
Flint Hills Pro Shop
Income Statement
For the Month Ended April 30, 2014
| Sales | 2,430 |
| Sales Allowances | -90 |
| Net Sales | 2,340 |
| Cost of Goods Sold | -1,330 |
| Gross Profit | 1,010 |
Learn more about this topic:
from
Chapter 3 / Lesson 5Discover the chart of accounts and ledger accounting definitions. Learn about the different ledgers and account types, as well as the chart of accounts numbering system.