Practice Journal Entries for Accounting
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
Merchandise Inventory
$6,900
Accounts Payable
$6,900
April 4 Sold merchandise on account $5,500, FOB Destination, terms 1/10, n/30. The cost of the
merchandise sold was $4,100
Accounts Receivable
$5,500
Sales
$5,500
(to record the sale)
COGS
$4,100
Merchandise Inventory
$4,100
(to record the merchandise sold)
April 5 Paid $240 freight on April 4th sale
Freight-out
$240
Cash
$240
April 6 Received credit from Dakota Supply Co. for merchandise returned $500
Accounts Payable
$500
Merchandise Inventory
$500
April 11 Paid Dakota Supply Co. in full, less discount
Accounts Payable
$6,400
Cash
$6,336
Merchandise Inventory
$64
April 13 Received collections in full, less discounts, from customers billed on April 4th
Cash
$5,445
Sales Discounts
$55
Accounts Receivable
$5,500
April 14 Purchased merchandise for cash $3,800
Merchandise Inventory
$3,800
Cash
$3,800
April 16 Received refund from supplier for returned goods on cash purchase of April 14, $500
Cash
$500
Merchandise Inventory
$500
April 18 Purchased merchandise from Skywalker Distributors $4,500, FOB Shipping Point terms 2/10 n/30
Merchandise Inventory
$4,500
Accounts Payable
$4,500
April 20 Paid freight on April 18 purchase $100
Merchandise Inventory
$100
Cash
$100
April 23 Sold merchandise for cash $6,400. The merchandise sold had a cost of $5,120
Cash
$6,400
Sales
$6,400
(to record the sale)
COGS
$5,120
Merchandise Inventory
$5,120
(to record the merchandise sold)
April 26 Purchased merchandise for cash $2,300
Merchandise Inventory
$2,300
Cash
$2,300
April 27 Paid Skywalker Distributors in full, less discount
Accounts Payable
$4,500
Cash
$4,410
Merchandise Inventory
$90
April 29 Made refunds to cash customers for defective merchandise $90. The returned merchandise had
a scrap value of $30
Sales Returns and Allowances $90
Cash
$90
(to record the return)
Merchandise Inventory
$30
COGS
$30
(to record the merchandise returned)
April 30 Sold merchandise on account $3,700, terms n/30. The cost of the merchandise sold was $2,800
Accounts Receivable
$3,700
Sales
$3,800
(to record the sales)
COGS
$2,800
Merchandise Inventory
$2,800