Question

[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 $2,500, terms 2/10, n/30. May 3 Pays cash for freight costs of $120 on books purchased from Readers. May 5 Returns books with a cost of $250 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 $3,200 on account.

Answer 1

No	Date	General Journal	Debit	Credit
1	May-02	Inventory	$        2,500
		Accounts payable		$        2,500
2	May-03	Inventory	$           120
		Cash		$           120
3	May-05	Accounts payable	$           250
		Inventory		$           250
4	May-10	Accounts payable	$        2,250
		Inventory (2250*2%)		$              45
		Cash		$        2,205
5	May-30	Acccounts Receivable	$        3,200
		Sales		$        3,200
	May-30	Cost of goods sold	$        2,205
		Inventory		$        2,205