Nate's Grocery as January 1, 2012. The following events occurred in 2012. Assume that Nate's uses the periodic inventory method.
Comprehensive cycle problem: period system (Appendix)
The following trial balance pertains to Nate's Grocery as January 1, 2012.
Account Title Beginning Balances
Account receivable 4,000
Merchandise inventory 50,000
Accounts payable 4,000
Common Stock 43,000 Retained earnings 33,000
The following events occurred in 2012. Assume that Nate's uses the periodic inventory method.
1. Purchased land for $9,000 cash
2. Purchased merchandise on account for $96,000, terms 1/10 n/45.
3. Paid freight of $1,000 cash on merchandise purchased FOB shipping point.
4. Returned $3,600 of defective merchandise purchased in Event 2.
5. Sold merchandise for$86,000
6. Sold merchandise on account for $90,000, terms 2/10 n/30.
7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
8. Paid $11,600 cash for selling expenses.
9. Collected $50,000 of the accounts receivable from Event 6 within the discount period.
10. Collected $40,000 of the accounts receivable but not within the discount period.
11. Paid $6,400 of other operating expenses.
12. A physical count indicated that $47,600 of inventory was on hand at the end of the accounting period.
A periodic inventory method is determined.