Winters Hardware Store completed the following merchandising transactions in the

Question

Winters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Winters' ledger showed Cash of $9,600 and Common Stock of $9,600o. May Purchased merchandise on account from Black Wholesale Supply for $ 8,100, terms 1/10, n/30. 2 Sold merchandise on account for $ 4,900, terms 2/10, n/30. The cost of the merchandise sold was $3,675. 5 Received credit from Black Wholesale Supply for merchandise returned $ 400. 9 Received collections in full, less discounts, from customers billed on May 2. 10 Paid Black Wholesale Supply in full, less discount. 11 Purchased supplies for cash $1,080. 12 Purchased merchandise for cash $ 3,720 15 Received $ 276 refund for return of poor-quality merchandise from supplier on cash purchase. 17 Purchased merchandise from Wilhelm Distributors for $2,850, terms 2/10, n/30 19 Paid freight on May 17 purchase $ 300. 24 Sold merchandise for cash $ 6,600. The cost of the merchandise sold was $ 4.920. 25 Purchased merchandise from Clasps Inc. for $ 960, terms 3/10, n/30

Explanation / Answer

Income Statement :-

If you are know amount of Operating Expenses, Gross

Profit Reduce by Operating Expense and Get Net Profit/(Loss).

Particulars Amount($) Amount($) Sales Revenue 13036 Less : Sales Returns and Allowances 135 Less : sales Discount ($4900*2%) 98 (233) Net Sales 12803 Less : Cost of Goods Sold($3675+$4920+$996-$99) (9492) Gross Profit 3311 Less ; Operating Expenses (Not Given in Question) Net Profit/(Loss)

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