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Metal Music Ltd is a retail store specialising in musical instruments and other musical items for rock and metal musicians. At the beginning of February 2020, the ledger of Metal Music Ltd showed Cash $2,500; Inventory $1,700; and Share capital $4,200. The company uses a perpetual inventory system. The following transactions were completed during February 2020:

(1) Journalise the February transactions (ignore GST and narrations are not required).

(2)Prepare a statement of profit or loss up to gross profit for the month ended 28 February 2020.

• 27th Feb - this transaction doesn't state that any inventory was returned, so you assume that the customer keeps the faulty strap (eg. it may have been a faded colour but apart from that it is usable to the customer who keeps the strap and is granted an allowance of $30.)

February 6 Purchased electric guitars from Guitars R Us Ltd $840, terms 3/7, n/30. 7 Paid freight on Guitars R Us Ltd purchase $40. 8 Sold inventory to customers $900, terms n/30. The inventory cost $600. 10 Received credit of $84 from Guitars R Us Ltd for a guitar that was returned. 11 Purchased guitar strings from Strings N Things for cash $300. 13 Paid Guitars R Us Ltd in full. 14 Purchased Guitar straps and leads from Musical Importers Ltd $500, terms 2/7, n/60. 15 Received cash refund of $50 from Strings N Things for damaged inventory that was returned. 17 Paid freight on Musical Importers Ltd purchase $30. 18 Sold inventory to customers $900, terms n/30. The cost of the inventory was $530. 20 Received $500 in cash from customers in settlement of their accounts. 21 Paid Strings N Things Ltd Musical Importers Ltd in full. 27 Granted an allowance of $30 to a customer for a guitar strap that was faulty. 28 Received cash payments on account from customers $500

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