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Olaf Distributing Company completed the following merchandising transactions in the

month of April. At the beginning of April, the ledger of Olaf showed Cash of $9,000 and
M. Olaf, Capital of $9,000.
April 2 Purchased merchandise on account from Dakota Supply Co. $6,900, terms 1/10,
n/30.
4 Sold merchandise on account $5,500, FOB destination, terms 1/10, n/30. The cost of
the merchandise sold was $4,100.
5 Paid $240 freight on April 4 sale.
6 Received credit from Dakota Supply Co. for merchandise returned $500.
11 Paid Dakota Supply Co. in full, less discount. 13 Received collections in full, less
discounts, from customers billed on April 4.
14 Purchased merchandise for cash $3,800.
16 Received refund from supplier for returned goods on cash purchase of April 14, $500.
18 Purchased merchandise from Skywalker Distributors $4,500, FOB shipping point,
terms 2/10, n/30.
20 Paid freight on April 18 purchase $100.
23 Sold merchandise for cash $6,400.The merchandise sold had a cost of $5,120.
26 Purchased merchandise for cash $2,300.
27 Paid Skywalker Distributors in full, less discount.
29 Made refunds to cash customers for defective merchandise $90. The returned
merchandise had a scrap value of $30.
30 Sold merchandise on account $3,700, terms n/30.The cost of the merchandise sold was
$2,800.
Olaf Company's chart of accounts includes the following: No. 101 Cash, No. 112
Accounts Receivable, No. 120 Merchandise Inventory, No. 201 Accounts Payable, No.
301 M. Olaf, Capital, No. 401 Sales, No. 412 Sales Returns and Allowances, No. 414
Sales Discounts, No. 505 Cost of Goods Sold, and No. 644 Freight-out.
(a)
General Journal
Date
Apr.  2

 4

 5

 6

Account Titles and Explanation
Merchandise Inventory.........................................
Accounts Payable........................................

Ref.
120
201

Debit
6,900

Accounts Receivable.............................................
Sales..............................................................
Cost of Goods Sold................................................
Merchandise Inventory..............................

112
401
505
120

5,500

Freight-out.............................................................
Cash..............................................................

644
101

  240

Accounts Payable..................................................
Merchandise Inventory..............................

201
120

  500

Credit
6,900

5,500
4,100
4,100

240

500

....800 500 4................. 23 26 27 29 Credit 6......................... 101 120 Merchandise Inventory........... Merchandise Inventory...............400 Cash Sales Discounts ($5................................................................400 Merchandise Inventory............500 100 General Journal Date Apr....................................... 201 120 4...... 412 101 120 64 101 6......... Merchandise Inventory............................ Merchandise Inventory.. 101 414 112 5................................ Accounts Receivable...... Cash..... 120 101 2......................410    90 90    30 ......900 – $500)......................................... Cash.......................... Merchandise Inventory...................................... Cost of Goods Sold.................... 120 201 4...400 X 1%) Cash..........................................11 13 14 16 18 20 Accounts Payable ($6.......336 5................................. 120 101   100 Account Titles and Explanation Cash Sales.......... 101 401 505 120 Debit 6...............................120 5..............................................500 X 1%)........   ($4........ Ref............................................................................ Accounts Payable...........................300 Accounts Payable............300 90 101 4.................... Cash................. Cash......... 201 120 6....................................   ($6..................................400 5.......445   55 Merchandise Inventory....500 3....................500 X 2%) Cash.....................................................500 Merchandise Inventory.500 Sales Returns and Allowances..................................................................800 Cash   500 Merchandise Inventory..... 120 101 3.......120 2.......................

.....336 5.569  4.........036  5. Explanation  4 13 30 Ref...800   500 4....800  2..................... 112 401 505 120 30 3..300 4.......  J1 J1 J1 J1 J1 J1 J1 J1 J1 J1 Debit Credit Balance 2.. 505 Accounts Receivable....536  10...........445 3..069  4..424  7. Cost of Goods Sold.....400 Accounts Receivable Date Apr..869  4...500      0  3.700 Merchandise Inventory Date Apr.....500 Ref.......410    90  9...036 ....700 3.100   500   64 3........469 10.. Merchandise Inventory....700 2..800   500   100 6.000  8..500  6...........300  2..760  2....700 Credit Balance   240 6..569  4. Sales............................30 Cost of Goods Sold.........500  5..800 2.......900 3.......... Explanation  2  4  6 11 14 16 18 4.....236  6...... Explanation 1 5 11 13 14 16 20 23 26 27 29 Balance Ref........159  4.. Debit J1 J1 J1 J1 J1 J1 J1 6.......069 Credit Balance 5.. Debit J1 J1 J1 5..800 (b) Cash Date Apr.........869  8.........900  2................

400 3.900  6.20 23 26 27 29 30 Accounts Payable J1 J1 J1 J1 J1 J1   100 Date Ref.500 Common Stock Date Apr. Explanation  4 23 30 Ref.900  6.120 2.400 4.500 4.000 Sales Date Apr.400      0  4.700  5. Explanation  2  6 11 18 27 J1 J1 J1 J1 J1 2. Explanation 13 Cost of Goods Sold Credit Balance    55 . Debit Apr.500 6. Explanation 29 Ref.456 Credit Balance 6. Debit J1    90 Ref.316  7.800  10. Explanation  1 Balance Ref. Debit J1 J1 J1 Credit Balance 5.300    90    30   500 6.226  7. Debit J1   55     90 Sales Discounts Date Apr.016  7.900 15.136  5.600 Credit Balance Sales Returns and Allowances Date Apr.500      0 5. Debit Credit  Balance  9.500 11.256  4.

....................................... 2008 Sales revenues Sales...... (c) Explanation  5 Ref........................................ Debit J1 J1 J1 J1 4......... 145 Net sales..............................................................Date Apr.............................100  9......................... 15....................... Sales discounts............................... $15...100 5.. Debit J1 240 Credit Balance 240 OLAF DISTRIBUTING COMPANY Income Statement (Partial) For the Month Ended April 30..220  9.......120 Credit Balance  4.......................... $ 3..............455 Cost of goods sold.........800 Freight-out Date Apr.990    30 2.....................................990 Gross profit................................... Explanation  4 23 29 30 Ref..................................................600 Less: Sales returns and allowances.......190 11........465 $90 55 .. 11....