Problem 5-2A Ayayai Book Warehouse Ltd. distributes hardcover books to retail st
ID: 2407127 • Letter: P
Question
Problem 5-2A
Ayayai Book Warehouse Ltd. distributes hardcover books to retail stores. At the end of May, Ayayai’s inventory consists of 270 books purchased at $19 each. Ayayai uses a perpetual inventory system.
During the month of June, the following merchandise transactions occurred:
Paid Reader’s World Publishers in full.
June 1 Purchased 190 books on account for $17 each from Reader’s World Publishers, terms n/45. 3 Sold 200 books on account to The Book Nook for $25 each, with an assumed average cost of $18, terms 2/10, n/45. 5 Received a $170 credit for 10 books returned to Reader’s World Publishers. 8 Sold 70 books on account to Read-A-Lot Bookstore for $22 each, with an assumed average cost of $18, terms 2/10, n/45. 9 Issued a $264 credit memorandum to Read-A-Lot Bookstore for the return of 12 damaged books. The books were determined to be no longer saleable and were destroyed. 11 Purchased 130 books on account for $14 each from Read More Publishers, terms n/45. 12 Received payment in full from The Book Nook. 17 Received payment in full from Read-A-Lot Bookstore. 22 Sold 125 books on account to Reader’s Bookstore for $23 each, with an assumed average cost of $18, terms 2/10, n/45. 25 Granted Reader’s Bookstore a $322 credit for 14 returned books. These books were restored to inventory. 29Paid Reader’s World Publishers in full.
Is the Ayayai Book Warehouse a retailer or a wholesaler? The Ayayai Book Warehouse is aExplanation / Answer
A. Wholeseller
B.
C.
D.
Dear Student,
Best effort has been made to give quality and correct answer. But if you find any issues please comment your concern. I will definitely resolve your query.
Also please give your positive rating.
Date Account Description Debit Credit 1-Jun Inventory $ 3,230.00 Accounts Payable $ 3,230.00 (Being Books purchased) 3-Jun Accounts Receivable $ 5,000.00 Sales $ 5,000.00 (Being books Sold ) 3-Jun Cost of Goods Sold $ 3,600.00 Inventory $ 3,600.00 (Being Cost of Goods Sold recorded) 5-Jun Accounts Payable $ 170.00 Inventory $ 170.00 (Being Books Returned) 8-Jun Accounts Receivable $ 1,540.00 Sales $ 1,540.00 (Being books Sold ) 8-Jun Cost of Goods Sold $ 1,260.00 Inventory $ 1,260.00 (Being Cost of Goods Sold recorded) 9-Jun Loss of Goods Expesnes $ 264.00 Accounts Receivable $ 264.00 (Being Damaged goods Return and Destroyed) 11-Jun Inventory $ 1,820.00 Accounts Payable $ 1,820.00 (Being Books purchased) 12-Jun Cash $ 4,900.00 Discount $ 100.00 Account Receivable $ 5,000.00 (Being Cash received on account) 17-Jun Cash $ 1,250.48 Discount $ 25.52 Account Receivable $ 1,276.00 (Being Cash received on account) 22-Jun Accounts Receivable $ 2,875.00 Sales $ 2,875.00 (Being books Sold ) 22-Jun Cost of Goods Sold $ 2,250.00 Inventory $ 2,250.00 (Being Cost of Goods Sold recorded) 25-Jun Sales Return $ 322.00 Accounts Receivable $ 322.00 (Being Books Returned) 25-Jun Inventory $ 252.00 Cost of Goods Sold $ 252.00 (being Goods restored to Inventory) 29-Jun Accounts Payable $ 3,060.00 Cash $ 3,060.00 (Being Cash paid on account)