Question

Question 5 of 6 0.26/1 Sheffield Corp.completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Sheffield Corp. showed Cash of $7,600 and Common Stock of $8,800. May 1 Purchased merchandise on account from Black Wholesale Supply for $8,000, terms 1/10,n/30. 2 Sold merchandise on account $4,800, terms 2/10, 1/30. The cost of the merchandise sold was $3,300. 5 Received credit from Black Wholesale Supply for merchandise returned $300. 9 Received collections in full, less discounts, from customers billed on May 2. 10 Paid Black Wholesale Supply in full less discount 11 Purchased supplies for cash $1,000. 12 Purchased merchandise for cash $3,400. 15 Received $230 refund for return of poor quality merchandise from supplier on cash purchase. 17 Purchased merchandise on account from Wilhelm Distributors for $2,300, terms 2/10, 1/30. 19 Paid freight on May 17 purchase $250. 24 Sold merchandise for cash $6,000. The merchandise sold had a cost of $4,400. 25 Purchased merchandise on account from Clasps, Inc. For $800, terms 3/10, n/30. 27 Paid Wilhelm Distributors in full, less discount. 29 Made refunds to cash customers for returned merchandise $134. The returned merchandise cost $9. 31 Sold merchandise on account for $1.280 terms n/30. The cost of the merchandise sold was $810. Sheffield Corp'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. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Answer 1

Income Statement
Sales Revenue	$        12,080
Less Sales Returns and Allowances	$             134
Less Sales Discounts	$                96
Net Sales Revenue		$        11,850
Cost of Goods Sold		$          8,501
Gross Profit		$          3,349

Account Titles	Debit	Credit
Depreciation Expense	$        11,000
Accumulated Depreciation - Equipment		$        11,000
Insurance Expense	$          7,600
Prepaid Insurance		$          7,600
Property Tax Expense	$          2,500
Property Tax Payable		$          2,500
Sales Commission Expense	$          4,500
Sales Commission Payable		$          4,500

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