Journalize, post, and prepare a partial income statement . (LO 2, 3, 5) Renner H
ID: 2468344 • Letter: J
Question
Journalize, post, and prepare a partial income statement.
(LO 2, 3, 5)
Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $5,000 and Owner's Capital of $5,000.
Renner Hardware's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner's Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.
Instructions
(a)
Journalize the transactions using a perpetual inventory system.
(b)
Enter the beginning cash and capital balances and post the transactions. (Use J1 for the journal reference.)
(c)
Prepare an income statement through gross profit for the month of May 2017.
Gross profit $2,379
May??1 Purchased merchandise on account from Braun's Wholesale Supply $4,200, terms 2/10, n/30. 2 Sold merchandise on account $2,100, terms 1/10, n/30. The cost of the merchandise sold was $1,300. 5 Received credit from Braun's Wholesale Supply for merchandise returned $300. 9 Received collections in full, less discounts, from customers billed on sales of $2,100 on May 2. 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $400. 12 Purchased merchandise for cash $1,400. 15 Received refund for poor quality merchandise from supplier on cash purchase $150. 17 Purchased merchandise from Valley Distributors $1,300, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $130. 24 Sold merchandise for cash $3,200. The merchandise sold had a cost of $2,000. 25 Purchased merchandise from Lumley, Inc. $620, FOB destination, terms 2/10, n/30. 27 Paid Valley Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30. 31 Sold merchandise on account $1,000 terms n/30. The cost of the merchandise sold was $560.Explanation / Answer
Renner Hardware Store
Journal
Date Account Titles Debit Credit May $ $ 1 Inventory 4,200 Accounts payable 4,200 2. Accounts receivable 2,100 Sales 2,100 Cost of goods sold 1,300 Inventory 1,300 5. Accounts payable 300 Inventory 300 9 Cash 2,079 Sales discount 21 Accounts receivable 2,100 10 Accounts payable 3,900 Purchase discount 78 Cash 3,822 11 Supplies 400 Cash 400 12 Inventory 1,400 Cash 1,400 15 Cash 150 Inventory 150 17. Inventory 1,300 Accounts payable 1,300 19 Inventory 130 Cash 130 24 Cash 3,200 Sales 3,200 Cost of goods sold 2,000 Inventory 2,000 25 Inventory 620 Accounts payable 620 26 Accounts payable 1,300 Cash 1,274 Purchase discount 26 29 Inventory 30 Inventory loss 40 Cash 70 31 Accounts receivable 1,000 Sales 1,000 Cost of goods sold 560 Inventory 560Related Questions
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