Vree Distributing Company plc completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Vree showed Cash of €8,000 and Share Capital-Ordinary 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.
Vree 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 Share Capital-Ordinary, 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.
Instructions
(a) Journalize the transactions using a perpetual inventory system.
(b) Enter the beginning cash and share capital-ordinary balances, and post the transactions. (Use J1 for the journal reference.)
(c) Prepare the income statement through gross profit for the month of April 2017.