During the Current Year,the Following Transactions Occurred for Marjorie's Jewelry

question 117

Essay

During the current year,the following transactions occurred for Marjorie's Jewelry Store:
A.On May 1,the business purchased 10 rings on account at $6,000 each.Credit terms were 2/10,net/30.
B.On May 2,the business returned one ring because of a defect.
C.On May 3,three of the rings were sold on account at $8,000 each,to one customer.Credit terms were n/30.No sales returns were expected.
D.On May 9,the accounts payable was paid in full.
E.On May 10,the customer paid for one ring sold on May 3.
F.On May 31,the business paid rent of $4,000 for the month of May and wages of $5,000.
Required:
1.Journalize the above transactions for Marjorie's Jewelry Store.The store uses the perpetual inventory system.Explanations are not required.
2.Prepare the income statement for the month ending May 31 of the current year.Use the multistep format and ignore taxes.

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Definitions:

Deductible

The amount paid out of pocket by the policyholder before an insurance company pays a claim.

Co-payment

A fixed payment made by a patient for a covered service, under a health insurance plan, at the time the service is provided.

Adverse Selection

A situation where asymmetric information results in high-risk parties being more likely to engage in agreements than low-risk parties.

ISO 9000 Certified

A designation indicating that an organization complies with the standards of quality management and assurance specified by the International Organization for Standardization.