The following trial balance pertains to Nate’s Grocery as of January 1, 2012: Account Title Beginning BalancesCash …………. $26,000Accounts receivable ……. 4,000Merchandise inventory ….. 50,000Accounts payable …….. 4,000Common stock ……… 43,000Retained earnings ……. 33,000Totals ……….. $80,000The 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 1y10 ny45.3. 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 cash.6. Sold merchandise on account for $90,000, terms 2y10 ny30.7. 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.Requireda. Record the above transactions in a horizontal statements model like the following one.b. Prepare a schedule of cost of goods sold and an incomestatement.
The following trial balance pertains to Nate s Grocery as of