Question

Powell Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred.

June 1		Purchased books on account for $2,160 (including freight) from Catlin Publishers, terms 2/10, n/30.
3		Sold books on account to Garfunkel Bookstore for $1,700. The cost of the merchandise sold was $800.
6		Received $60 credit for books returned to Catlin Publishers.
9		Paid Catlin Publishers in full.
15		Received payment in full from Garfunkel Bookstore.
17		Sold books on account to Bell Tower for $1,700. The cost of the merchandise sold was $950.
20		Purchased books on account for $800 from Priceless Book Publishers, terms 2/15, n/30.
24		Received payment in full from Bell Tower.
26		Paid Priceless Book Publishers in full.
28		Sold books on account to General Bookstore for $1,450. The cost of the merchandise sold was $910.
30		Granted General Bookstore $260 credit for books returned costing $90.

Powell Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred. Purchased books on account for $2,160 (including freight) from Catlin Publishers, terms 2/10, n/30. June 1 Sold books on account Garfunkel Bookstore for $1,700. The cost of the merchandise sold was $800. 6 Received $60 credit for books returned to Catlin Publishers. 9 Paid Catlin Publishers in full. 15 Received payment in full from Garfunkel Bookstore 17 Sold books on account Bell Tower for $1,700. The cost of the merchandise sold was $950. Purchased books on account for $800 from Priceless Book Publishers, terms 2/15, n/30. 20 Received payment in full from Bell Tower. 24 26 Paid Priceless Book Publishers in full Sold books on account to General Bookstore for $1,450. The cost of the merchandise sold was $910. 28 30 Granted General Bookstore $260 credit for books returned costing $90. Journalize the transactions for the month of June for Powell Warehouse, using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to 0 decimal places e.g. 15,222) Date Account Titles and Explanation Debit Credit June 1 2160 Inventory Accounts Payable 2160 June 3 Accounts Receivable 1700 Sales Revenue 1700 (To record credit sale) Cost of Goods Sold 800 Imantor

Answer 1

	All of the entries made are correct except the entry made on June 9 and June 24
	So the Powwel corp. purchased the books from catlin at $2160 on June 1 on terms on 2/10,n/30
	means pwel will receive 2% discount if it pays within 10 days.
	So Net Purchase =$2,160 - $60=$2,100
	Discount on purchase =$2,100*2% =$42
	Net payment =$2,100-42 =$2,058
Jun-09	Accounts Payable		$2,100
	Inventory			$42
	Cash			$2,058
	Similarly the books sold on June 17 is with discount terms of 2/10,n/30
	means that that if the party pays within 10 days of making the sale then Powell will provide a sales discount of 2%
	So Sales Discounts =$1,700*2% =$34
Jun-24	Cash		$1,666
	Sales Discounts		$34
	Accounts Receivable			$1,700
Jun-26	Accounts Payable		$800
	Inventory			$16($800*2%)
	Cash			$784
Jun-28	Accounts Receivable		$1,450
	Cash			$1,450
Jun-28	Cost of goods sold		$910
	Inventory			$910
Jun-30	Sale return and allowance		$260
	Accounts Receivable			$260
Jun-30	Inventroy		$90
	Cost of goods sold			$90