Journalize transactions using a perpetual inventory system

Reference no: EM13160363

month of April. At the beginning of April, the ledger of Olaf showed Cash of $9,000 and Common Stock of $9,000.
April 2 Purchased merchandise on account from Dakota Supply Co. $6,900, terms 1/10, n/30.
April 4 Sold merchandise on account $5,500, FOB destination, terms 1/10, n/30.The cost of the merchandise sold was $4,100.
April 5 Paid $240 freight on April 4 sale.
April 6 Received credit from Dakota Supply Co. for merchandise returned $500.
April 11 Paid Dakota Supply Co. in full, less discount.
April 13 Received collections in full, less discounts, from customers billed on April 4.
April 14 Purchased merchandise for cash $3,800.
April 16 Received refund from supplier for returned goods on cash purchase of April 14, $500.
April 18 Purchased merchandise from Skywalker Distributors $4,500, FOB shipping point, terms 2/10, n/30.
April 20 Paid freight on April 18 purchase $100.
April 23 Sold merchandise for cash $6,400.The merchandise sold had a cost of $5,120.
April 26 Purchased merchandise for cash $2,300.
April 27 Paid Skywalker Distributors in full, less discount.
April 29 Made refunds to cash customers for defective merchandise $90. The returned merchandise had a scrap value of $30.
April 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. 311 Common Stock, No. 401 Sales, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, No. 505 Cost of Goods Sold, and No. 644 Freight-out.
Instructions
(a) Journalize the transactions using a perpetual inventory system.
(b) Enter the beginning cash and common stock balances, and post the transactions. (Use J1 for the journal reference.)
(c) Prepare the income statement through gross profit for the month of April 2011.

Reference no: EM13160363

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