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Hill Merchandising Company provided you with the following transactions for the month of June 2000. Hills policy is to sell all merchandise at 50% markup on cost. Hill Company reported inventory costing $500 on May 30, 2000, cash $8,500, capital $6,000 and retained earnings $3,000.

Purchased $5,000 in products on account from George Company, F.O.B shipping point 3/10, n/30, freight charges of $250 were paid by Hill.

Returned merchandise purchased from George Company costing $75 two days after the purchase.

Sold merchandise costing $2,000. Terms 2/10, n/30. Paid $200 to transport the merchandise to the customer.

Paid George Company in full within the discount period. (Note: you must deduct the merchandise returned).

Customers returned merchandise costing $80 because they were defective.

Received payment for merchandise sold after the discount period.

Required:

Record the following transactions for Hill Company in the general journal and post to the ledger. Assume Hill uses the perpetual method to account for its inventory.

Prepare the worksheet

Prepare the income statement for June 2000

Close the book at end of June. (Perpetual)

Repeat 1, 2 and 3 above this time assume that Hill Company uses the periodic method to account for its inventory.

Prepare the income statement for June 2000.

Close the book at end of June (periodic)

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