Winters hardware store completed the following merchandising transactions in the month of may. at the beginning of may, winters’ ledger showed cash of $8,800 and common stock of $8,800.
may 1 purchased merchandise on account from black wholesale supply for $7,900, terms 1/10, n/30.
may 2 sold merchandise on account for $4,000, terms 2/10, n/30. the cost of the merchandise sold was $3,000.
may 5 received credit from black wholesale supply for merchandise returned $300.
may 9 received collections in full, less discounts, from customers billed on may 2.
may 10 paid black wholesale supply in full, less discount.
may 11 purchased supplies for cash $990.
may 12 purchased merchandise for cash $3,410.
may 15 received $253 refund for return of poor-quality merchandise from supplier on cash purchase.
may 17 purchased merchandise from wilhelm distributors for $3,300, terms 2/10, n/30.
may 19 paid freight on may 17 purchase $275.
may 24 sold merchandise for cash $6,050. the cost of the merchandise sold was $4,510.
may 25 purchased merchandise from clasps inc. for $880, terms 3/10, n/30.
may 27 paid wilhelm distributors in full, less discount.
may 29 made refunds to cash customers for returned merchandise $145. the returned merchandise had cost $97.
may 31 sold merchandise on account for $1,408, terms n/30. the cost of the merchandise sold was $913.
(a)-journalize the transactions using a perpetual inventory system. (if no entry is required, select "no entry" for the account titles and enter 0 for the amounts. credit account titles are automatically indented when amount is entered. do not indent manually. record journal entries in the order presented in the problem.)
(b)-post the transactions to t-accounts. be sure to enter the beginning cash and common stock balances. (post entries in the order of journal entries posted in part (a). round answers to 0 decimal places, e. g. 5,275.)
(c)-prepare an income statement through gross profit for the month of may 2017. (round answers to 0 decimal places, e. g. 5,275.)
(d)-calculate the profit margin and the gross profit rate. (assume operating expenses were $1,540.) (round answers to 1 decimal place, e. g. 15.5%.)