90.2K

Verified Solution

Link Copied!

P$5\mathrm{.}2($LO $2,3,5),$ AP Financial Statement 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.$

May $1$ Purchased merchandise on account from Braun$$s Wholesale Supply for $$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 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 $$150$ refund for return of poor$-$quality

merchandise from supplier on cash

purchase.

$17$ Purchased merchandise on account from Valley Distributors for $$1,300,$ terms $2/10,$ n$/30,$

FOB shipping point.

$19$ 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 on account from Lumley, Inc. for $$620,$ terms $2/10,$ n$/30.$

$27$ Paid Valley Distributors in full, less discount.

$29$ Made refunds to cash customers for returned merchandise $$70.$ The returned merchandise

cost $$30.$

$31$ Sold merchandise on account for $$1,000$ terms n$/30.$ The cost of the merchandise sold

was $$560.$

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 J$1$ for the journal

reference.$)$

c$.$ Prepare an income statement through gross profit for the month of May $2022.$

Answer & Explanation Solved by verified expert

See Answer