Acc280 Principles of Accounting: P5-2A Olaf Distributing Company (Perpetual Inventory Method)

Acc280 Principles of Accounting


P5-2A 
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 Common Stock 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.


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Instructions:
a.  Journalize the transactions using a perpetual inventory system. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2. Round answers to 0 decimal places, e.g. 125.)
b.  Enter the beginning cash and common stock balances, and post the transactions. (Use J1 for the journal reference.) (If answer is zero, please enter 0. Do not leave any fields blank.)
c.  Prepare the income statement through gross profit for the month of April 2008. (List amounts from largest to smallest e.g. 10, 5, 3, 2. Enter all amounts as positive amounts and subtract where necessary.)    

BUY:  P5-2A Olaf Distributing Company