Chapter 5, Problem 5.7BP

(a)

To determine

Periodic System:

Periodic system is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Journalizing:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

T-Account:

T-Account is a form of ledger account in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account.

Trial Balance:

Trial balance is prepared at the end of an accounting period listing all the ledgers and their balances. The total of the debit balances in the trial balance shall be equal to the total of the credit balances. It is prepared to check whether there is any mathematical error in the accounts.

To Journalize: The April transactions using a periodic inventory system.

(b)

To determine

Open T-Accounts and post the opening balances for 2015.

(c)

To determine

To Prepare: A trial balance as on April 30, 2015.

(d)

To determine

To Prepare: An income statement through gross profit, assuming inventory on hand at April 30 is $2,296.