Clay pooll Hardwares is only hardware store in a remote area of northern Minnesota. Some of Claypools tranactions during the current year are as followed:
- Nov 5th Sold Lumber on account to Bemmidji Construction for $13,390. The inventory subsidary ledger shows the cost of the this merchandise was $9,105.
- Nov 9th Purchased Tools on account from Owatonna Tool Company, $3,800.
- Dec 5th Collected in cash the $13,390 account recivable from Bemidji Construction.
- Dec 9th Paid the $3,800 owed to Owatonna Tool Company.
Claypools personnel counted the inventory on hand and determined its cost to be $182,080. The accounting records however, indicate inventory of 183,790 and a cost of goods sold of $695,222. The physcial count of inventory was observed by the company's auditors and is considered correct.
<2 Part question>
A.Prepare joural entries to record theses transactions and events in the accounting records of Claypool Hardware.
B.Prepare a partial income statement showing the companies Gross profit for the year. (Net Sales for the year amount to $1,024,900.