Question

mework i Saved Help Save & Exit Check my Required Information [The following information applies to the questions displayed below.] The transactions listed below are typical of those involving New Books Inc. and Readers' Corner. New Books is a wholesale merchandiser and Readers' Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers' Corner are made with terms n/30, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31. a. New Books sold merchandise to Readers' Corner at a selling price of $585,000. The merchandise had cost New Books $429,000. b. Two days later, Readers' Corner complained to New Books that some of the merchandise differed from what Readers' Corner had ordered. New Books agreed to give an allowance of $13,500 to Readers' Corner. Readers Corner also returned some books, which had cost New Books $2,700 and had been sold to Readers' Corner for $4,200. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. 2. Prepare the journal entries that Readers' Corner would record. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Prev 1 of 11 Next>

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Event	Account	Debit	Credit
a	Inventory	$   585,000
	Accounts Payable		$   585,000
	(To record purchases)
b	Accounts Payable	$      17,700
	Inventory		$      17,700
	(To record return and allowance) $13,500+$4,200
c	Accounts Payable	$   567,300
	Cash		$   567,300
	(To record payment)
Event	Account	Debit	Credit
a1	Accounts Receivable	$   585,000
	Sale		$   585,000
	(To record sale)
a2	Cost of goods sold	$   429,000
	Inventory		$   429,000
	(To record cost of goods sold)
b1	Sales return and allowance	$      17,700
	Accounts Receivable		$      17,700
	(To record return and allowance)
b2	Inventory	$        2,700
	Cost of goods sold		$        2,700
	(To record cost of goods returned)
c	Cash	$   567,300
	Accounts Receivable		$   567,300
	(To record cash received)