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Problem 5-1A

Winters Hardware Store completed the following merchandisingtransactions in the month of May. At the beginning of May, Winters’ledger showed Cash of $11,200 and Common Stock of $11,200. May 1 Purchased merchandise on account from Black Wholesale Supplyfor $7,900, terms 1/10, n/30. 2 Sold merchandise on account for $4,800, terms 2/10, n/30. Thecost of the merchandise sold was $3,600. 5 Received credit from Black Wholesale Supply for merchandisereturned $300. 9 Received collections in full, less discounts, from customersbilled on May 2. 10 Paid Black Wholesale Supply in full, less discount. 11 Purchased supplies for cash $1,260. 12 Purchased merchandise for cash $4,340. 15 Received $322 refund for return of poor-quality merchandisefrom supplier on cash purchase. 17 Purchased merchandise from Wilhelm Distributors for $2,750,terms 2/10, n/30. 19 Paid freight on May 17 purchase $350. 24 Sold merchandise for cash $7,700. The cost of the merchandisesold was $5,740. 25 Purchased merchandise from Clasps Inc. for $1,120, terms 3/10,n/30. 27 Paid Wilhelm Distributors in full, less discount. 29 Made refunds to cash customers for returned merchandise $135.The returned merchandise had cost $90. 31 Sold merchandise on account for $1,792, terms n/30. The cost ofthe merchandise sold was $1,162.

Journalize the transactions using a perpetual inventory system.(If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts. Credit account titlesare automatically indented when amount is entered. Do not indentmanually. Record journal entries in the order presented in theproblem.)

Post the transactions to T-accounts. Be sure to enter thebeginning cash and common stock balances. (Post entriesin the order of journal entries posted in part (a). Round answersto 0 decimal places, e.g. 5,275.)

Prepare an income statement through gross profit for the monthof May 2017. (Round answers to 0 decimal places, e.g.5,275.)

Calculate the profit margin and the gross profit rate. (Assumeoperating expenses were $1,960.) (Round answers to 1decimal place, e.g. 15.5%.) Profit margin enter percentages rounded to 1 decimal place % Gross profit rate enter percentages rounded to 1 decimal place %