Question

Required information [The following information applies to the questions displayed below.] Littleton Books has the following transactions during May. May 2 Purchases books on account from Readers Wholesale for $3,400, terms 2/10, n/30. May 3 Pays cash for freight costs of $210 on books purchased from Readers. May 5 Returns books with a cost of $350 to Readers because part of the order is incorrect. May 10 Pays the full amount due to Readers. May 30 Sells all books purchased on May 2 (less those returned on May 5) for $4,100 on account. Required: 1. Record the transactions of Littleton Books, assuming the company uses a periodic inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaction list Journal entry worksheet Record purchase of books on account from Readers Wholesale for $3,400, terms 2/10, n/30. Note: Enter debits before credits. Date Credit General Journal Cost of Goods Sold Accounts Payable Debit 3,400 May 02 ... 3,400 Record entry Clear entry View general journal

Answer 1

Solution:

Requirement 1:

No.	Date	General Journal	Debit	Credit
1	May. 02	Purchase	$        3,400
		Account Payable		$        3,400
		(To record Inventory purchased on account)
2	May. 03	Freight	$           210
		Cash		$           210
		( To record freight expense)
3	May. 05	Account Payable	$           350
		Purchases Returns		$           350
		( To record purchase returns)
4	May. 10	Account Payable	$        3,050
		Purchase Discount($3050 *2%)		$              61
		Cash		$        2,989
		( To record payments)
5	May. 30	Account Receivable	$        4,100
		Sale Revenue		$        4,100
		( To record sales revenue)
6	May. 30	No Journal Entry required	$               -
				$               -

Requirement 2:

Date	General Journal	Debit	Credit
May. 31	Cost of Goods Sold	$              3,199
	Purchase Returns	$                  350
	Purchase Discount (($3400-350) *2%)	$                    61
	Freight Expenses		$                   210
	Purchases Account		$                3,400
	( To record period end adjustment)

Notes:

1) In the requirement 1, entry 6 is not required because we are following periodic inventory system.

2) In the requirement 2, cost of goods sold is balancing figure.