actproblem 1
Cclegg00
problem_5-2a.doc
Problem 5-2AShmi Distributing Company completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Shmi showed Cash of $8,000 and Common Stock of $8,000. Apr. 2 Purchased merchandise on account from Walker Supply Co. $6,200, 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 $3,400. 5 Paid $240 freight on April 4 sale. 6 Received credit from Walker Supply Co. for merchandise returned $500. 11 Paid Walker 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 Benjamin Distributors $4,500, FOB shipping point, terms 2/10, n/30. 20 Paid freight on April 18 purchase $160. 23 Sold merchandise for cash $7,400. The merchandise sold had a cost of $4,120. 26 Purchased merchandise for cash $2,300. 27 Paid Benjamin Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $90. The returned merchandise had a fair value of $30. 30 Sold merchandise on account $3,400, terms n/30. The cost of the merchandise sold was $1,900. Shmi Distributing Company’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, No. 505 Cost of Goods Sold, and No. 644 Freight-Out. |
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Journalize the transactions using a perpetual inventory system. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit
(To record credit sale.)
(To record cost of merchandise sold.)
Apr. 13
(To record cash sale.)
(To record cost of merchandise sold.)
(To record merchandise returned.)
(To record cost of merchandise returned.)
(To record credit sale.)
(To record cost of merchandise sold.)
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Enter the beginning cash and capital balances, and post the transactions. (Post entries in the order of journal entries presented in the previous question.) Cash No. 101 Date Explanation Ref Debit Credit Balance
Balance √
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
Accounts Receivable No. 112 Date Explanation Ref Debit Credit Balance
J1
J1
J1
Inventory No. 120 Date Explanation Ref Debit Credit Balance
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
Accounts Payable No. 201 Date Explanation Ref Debit Credit Balance
J1
J1
J1
J1
J1
Common Stock No. 311 Date Explanation Ref Debit Credit Balance
Balance √
Sales Revenue No. 401 Date Explanation Ref Debit Credit Balance
J1
J1
J1
Sales Returns and Allowances No. 412 Date Explanation Ref Debit Credit Balance
J1
Sales Discounts No. 414 Date Explanation Ref Debit Credit Balance
J1
Cost of Goods Sold No. 505 Date Explanation Ref Debit Credit Balance
J1
J1
J1
J1
Freight-Out No. 644 Date Explanation Ref Debit Credit Balance
J1
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Prepare the income statement through gross profit for the month of April 2014. SHMI DISTRIBUTING COMPANY Income Statement (Partial) For the Month Ended April 30, 2014
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$
$
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