Problem 5-1A NEXT Powell\'s Book Warehouse distributes hardcover books to retail
ID: 2539535 • Letter: P
Question
Problem 5-1A NEXT Powell's Book Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Powell's inventory consisted of books purchased for $1,900. During June, the following merchandising transactions occurred. June 1 Purchased books on account for $1,700 from Kline Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $40 for the freight on this date. 3 Sold books on account to Reading Rainbow for $2,000. The cost of the books sold was $160. Received $150 credit for books returned to Kline Publishers. Paid Kline Publishers in full, less discount. Received payment in full from Reading Rainbow. Sold books on account to Blanco Books for $1,700. The cost of the books sold was $1,020. Purchased books on account for $1,550 from Dietz Publishers, FOB destination, terms 2/15, n/30. The appropriate party also made a cash payment of $60 for the freight on this date. Received payment in full from Blanco Books. Paid Dietz Publishers in full, less discount. Sold books on account to Reddy Bookstore for $1,100. The cost of the books sold was $600. Granted Reddy Bookstore $170 credit for books returned costing, $102. 6 9 15 17 24 26 28 30 Polwel I's Book Warehouse's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory No. 201 Accounts Payable, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold. Journalize the transactions for the month of June for Powell's Book Warehouse using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Debit Credit Date Account Titles and Explanation 1,700 June 1 |Inventory 1,700 Accounts Payable c. All Rights Reserved. A Division of 8 John Wiley & Sons, InExplanation / Answer
Journal Entries for the month of june is shown as follows
Journal Entries (Amounts in $)
Date Account Titles and Explanations Debit Credit June 1 Inventory 1,700 Accounts Payable 1,700 (To record the credit purchases) June 3 Accounts Receivable 2,000 Sales Revenue 2,000 (To record the credit sales) June 3 Cost of goods sold 160 Inventory 160 (To record the cost of merchandise sold) June 6 Accounts Payable 150 Inventory 150 (To record the purchase returned) June 9 Accounts Payable (1,700-150) 1,550 Inventory (1,550*2%) 31 Cash (1,550-31) 1,519 (To record the payment to account payable) June 15 Cash 2,000 Accounts Receivable 2,000 (To record the cash received from accounts receivable) June 17 Accounts Receivable 1,700 Sales Revenue 1,700 (To record the credit sales) June 17 Cost of goods sold 1,020 Inventory 1,020 (To record the cost of merchandise sold) June 20 Inventory 1,550 Accounts Payable 1,550 (To record the credit purchases) June 24 Cash 1,700 Accounts Receivable 1,700 (To record the cash received from accounts receivable) June 26 Accounts Payable 1,550 Inventory (1,550*2%) 31 Cash (1,550-31) 1,519 (To record the payment made to accounts payable) June 28 Accounts Receivable 1,100 Sales Revenue 1,100 (To record the credit sales) June 28 Cost of goods sold 600 Inventory 600 (To record the cost of merchandise sold) June 30 Sales returns and allowances 170 Accounts Receivable 170 (To record merchandise returned) June 30 Inventory 102 Cost of good sold 102 (To record the cost of merchandise returned)