Question

P5.1A (LO 2, 3) Kern’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, Kern’s inventory consisted of books pur- chased for $1,800. During June, the following merchandising transactions occurred.

weiss jenjadjed Bul jepun suojoesuell sajes pue June 1 6 9 15 17 20 Purchased books on account for $1,600 from Binsfeld Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. Sold books on account to Reading Rainbow for $2,500. The cost of the books sold was $1,440. Received $100 credit for books returned to Binsfeld Publishers. Paid Binsfeld Publishers in full, less discount. ? Received payment in full from Reading Rainbow. . Sold books on account to Rapp Books for $1,800. The cost of the books sold was $1,080. Purchased books on account for $1,800 from McGinn 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 Rapp Books. Paid McGinn Publishers in full, less discount. Sold books on account to Baeten Bookstore for $1,600. The cost of the books sold was $970. Granted Baeten Bookstore $120 credit for books returned costing $72. 24 28 30 Kern'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. Instructions Journalize the transactions for the month of June for Kern's Book Warehouse using a perpetual inventory system ulated the following merchan- Journali:

Answer 1

Date June 1 Account Titles and Explanation Inventory Accounts Payable (To record purchased from Binsfeld) Debit Credit $1,600 $1,600 June 3 Accounts receivable $2,500 Sales revenue (To record books sold to Reading Rainbow) $2,500 $1,440 Cost of goods sold Inventory (To record books sold on cost) $1,440 June 6 $100 Accounts Payable Inventory (To record books returned to Binsfeld) $100 June 9 Accounts Payable Inventory [($1,600 - $100) * 2%] Cash (To record settlement to Binsfeld) $1,500 $30 $1,470 June 15 Cash $2,500 Accounts receivable $2,500 (To record cash received from Reading Rainbow) $1,800 June 17 Accounts receivable Sales revenue $1,800 $1.080 Cost of goods sold Inventory $1.080 $1,800 June 20 Inventory Accounts Payable $1,800 $1,800 June 24 Cash Accounts receivable $1,800 $1,800 June 26 Accounts Payable Inventory [S1,800 * 2%] Cash $36 $1,764 $1.600 June 28 Accounts receivable Sales revenue $1,600 $970 Cost of goods sold Inventory $970 $120 June 30 Sales returns and allowances Accounts receivable $120 Inventory Cost of goods sold $72 $72