Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 25K views

    P5 2a

    Uploaded by

    delisa
    - Olaf Distributing Company recorded various merchandising transactions throughout April including purchases and sales of inventory on account and for cash, payment of expenses like freight, and returns. - Journal entries were made to record these transactions and adjustments to accounts like Cash, Accounts Receivable, Inventory, Accounts Payable, Sales, and Cost of Goods Sold. - An income statement for April showed Sales revenues of $15,600 less returns and discounts for Net sales of $15,455 and Cost of Goods Sold of $11,990 for a Gross profit of $3,465.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd

    P5 2a

    Uploaded by

    delisa
    25K views5 pages
    - Olaf Distributing Company recorded various merchandising transactions throughout April including purchases and sales of inventory on account and for cash, payment of expenses like freight, and returns. - Journal entries were made to record these transactions and adjustments to accounts like Cash, Accounts Receivable, Inventory, Accounts Payable, Sales, and Cost of Goods Sold. - An income statement for April showed Sales revenues of $15,600 less returns and discounts for Net sales of $15,455 and Cost of Goods Sold of $11,990 for a Gross profit of $3,465.

    Original Description:

    CHAPTER 5 ACCOUNTING FOR MERCHANDISING OPERATION

    Original Title

    P5-2A

    Copyright

    © © All Rights Reserved

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    - Olaf Distributing Company recorded various merchandising transactions throughout April including purchases and sales of inventory on account and for cash, payment of expenses like freight, and returns. - Journal entries were made to record these transactions and adjustments to accounts like Cash, Accounts Receivable, Inventory, Accounts Payable, Sales, and Cost of Goods Sold. - An income statement for April showed Sales revenues of $15,600 less returns and discounts for Net sales of $15,455 and Cost of Goods Sold of $11,990 for a Gross profit of $3,465.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    25K views5 pages

    P5 2a

    Uploaded by

    delisa
    - Olaf Distributing Company recorded various merchandising transactions throughout April including purchases and sales of inventory on account and for cash, payment of expenses like freight, and returns. - Journal entries were made to record these transactions and adjustments to accounts like Cash, Accounts Receivable, Inventory, Accounts Payable, Sales, and Cost of Goods Sold. - An income statement for April showed Sales revenues of $15,600 less returns and discounts for Net sales of $15,455 and Cost of Goods Sold of $11,990 for a Gross profit of $3,465.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 5

    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

    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

    11

    13

    14

    16

    18

    20

    Accounts Payable ($6,900 $500).........................


    Merchandise Inventory..............................
    ($6,400 X 1%)
    Cash..............................................................

    201
    120

    6,400

    Cash
    Sales Discounts ($5,500 X 1%).............................
    Accounts Receivable...................................

    101
    414
    112

    5,445
    55

    Merchandise Inventory........................................
    Cash..............................................................

    120
    101

    3,800

    Cash

    500

    Merchandise Inventory..............................

    101
    120

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

    120
    201

    4,500

    Merchandise Inventory........................................
    Cash..............................................................

    120
    101

    100

    Account Titles and Explanation


    Cash
    Sales..............................................................
    Cost of Goods Sold................................................
    Merchandise Inventory..............................

    Ref.
    101
    401
    505
    120

    Debit
    6,400

    Merchandise Inventory........................................
    Cash..............................................................

    120
    101

    2,300

    Accounts Payable..................................................
    Merchandise Inventory..............................
    ($4,500 X 2%)
    Cash..............................................................

    201
    120

    4,500

    Sales Returns and Allowances.............................


    Cash..............................................................
    Merchandise Inventory........................................

    412
    101
    120

    64

    101

    6,336

    5,500

    3,800

    500

    4,500

    100

    General Journal
    Date
    Apr. 23

    26

    27

    29

    Credit
    6,400

    5,120
    5,120

    2,300

    90

    101

    4,410
    90
    90
    30

    30

    Cost of Goods Sold......................................

    505

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

    112
    401
    505
    120

    30
    3,700
    3,700
    2,800
    2,800

    (b)
    Cash
    Date
    Apr.

    Explanation
    1
    5
    11
    13
    14
    16
    20
    23
    26
    27
    29

    Balance

    Ref.

    J1
    J1
    J1
    J1
    J1
    J1
    J1
    J1
    J1
    J1

    Debit

    Credit

    Balance

    2,300
    4,410
    90

    9,000
    8,760
    2,424
    7,869
    4,069
    4,569
    4,469
    10,869
    8,569
    4,159
    4,069

    Credit

    Balance

    5,500

    5,500
    0
    3,700

    Credit

    Balance

    240
    6,336
    5,445
    3,800
    500
    100
    6,400

    Accounts Receivable
    Date
    Apr.

    Explanation
    4
    13
    30

    Ref.

    Debit

    J1
    J1
    J1

    5,500

    Ref.

    Debit

    J1
    J1
    J1
    J1
    J1
    J1
    J1

    6,900

    3,700

    Merchandise Inventory
    Date
    Apr.

    Explanation
    2
    4
    6
    11
    14
    16
    18

    4,100
    500
    64
    3,800
    500
    4,500

    6,900
    2,800
    2,300
    2,236
    6,036
    5,536
    10,036

    20
    23
    26
    27
    29
    30
    Accounts Payable

    J1
    J1
    J1
    J1
    J1
    J1

    100

    Date

    Ref.

    Debit

    Apr.

    Explanation
    2
    6
    11
    18
    27

    J1
    J1
    J1
    J1
    J1

    2,800

    10,136
    5,016
    7,316
    7,226
    7,256
    4,456

    Credit

    Balance

    6,900

    6,900
    6,400
    0
    4,500
    0

    5,120
    2,300
    90
    30

    500
    6,400
    4,500
    4,500

    Common Stock
    Date
    Apr.

    Explanation
    1

    Balance

    Ref.

    Debit

    Credit

    Balance
    9,000

    Sales
    Date
    Apr.

    Explanation
    4
    23
    30

    Ref.

    Debit

    J1
    J1
    J1

    Credit

    Balance

    5,500
    6,400
    3,700

    5,500
    11,900
    15,600

    Credit

    Balance

    Sales Returns and Allowances


    Date
    Apr.

    Explanation
    29

    Ref.

    Debit

    J1

    90

    Ref.

    Debit

    J1

    55

    90

    Sales Discounts
    Date
    Apr.

    Explanation
    13

    Cost of Goods Sold

    Credit

    Balance
    55

    Date
    Apr.

    Explanation
    4
    23
    29
    30

    Ref.

    Debit

    J1
    J1
    J1
    J1

    4,100
    5,120

    Credit

    Balance
    4,100
    9,220
    9,190
    11,990

    30
    2,800

    Freight-out
    Date
    Apr.

    (c)

    Explanation
    5

    Ref.

    Debit

    J1

    240

    Credit

    Balance
    240

    OLAF DISTRIBUTING COMPANY


    Income Statement (Partial)
    For the Month Ended April 30, 2008
    Sales revenues
    Sales.............................................................................................
    $15,600
    Less: Sales returns and allowances.........................................
    Sales discounts.............................................................

    145
    Net sales.......................................................................................
    15,455
    Cost of goods sold.................................................................................
    11,990
    Gross profit...........................................................................................
    $3,465

    $90
    55

    You might also like