EXERCISES: SET B AND CHALLENGE EXERCISES Problems: Set A he book\'s companion we

Question

EXERCISES: SET B AND CHALLENGE EXERCISES Problems: Set A he book's companion website, at www.wiley.com/collegeh 251 the Student Companion site to access Exercises: Set B and Challenge Exercises and choose PROBLEMS: SET A 1 A Kern's Book Warehouse distributes hardcover books to retail P5- credit t tions occurred. June 1 Purchased books on account for $1,600 from Binsfeld Publishers, FOE stores and extends sisted of books purchased for $1,800. During June, the following merchandising transac. porpetisel Joumalie purchase and con sales transactions tender (LO 2, 3) 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 Repp 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. 3 6 9 15 17 20 24 Received payment in full from Rapp Books. 26 Paid McGinn Publishers in full, less discount. 28 Sold books on account to Baeten Bookstore for $1,600. The cost of the books 30 sold was $970 Granted Baeten Bookstore $120 credit for books returned costing $72. Warehouse's chart of accounts includes the following: No. 101 Cash, No. 112 No. 401 Sales Reve- Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, nue, No. 412 Goods Sold. Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Instructions Journalize the transactions for the month of June for Kern's Book Ware petual inventory system

Explanation / Answer

Date Account titles No Debit Credit 1-Jun Inventory 120 1600 Accounts payable 201 1600 Note: As the terms are FOB destination, the freight is be borne by the supplier, who would have paid it) 3-Jun Accounts receivable 112 2500 Sales revenue 401 2500 Cost of goods sold 505 1440 Inventory 120 1440 6-Jun Accounts payable 201 100 Inventory 120 100 9-Jun Accounts payable 201 1500 Inventory (Cash discount) 120 30 Cash 101 1470 15-Jun Cash 101 2500 Accounts receivable 112 2500 17-Jun Accounts receivable 112 1800 Sales revenue 401 1800 Cost of goods sold 505 1080 Inventory 120 1080 20-Jun Inventory 120 1800 Accounts payable 201 1800 Note: As the terms are FOB destination, the freight is be borne by the supplier, who would have paid it) 24-Jun Cash 101 1764 Sales discounts 414 36 Accounts receivable 112 1800 26-Jun Accounts payable 201 1800 Inventory (Cash discount) 120 36 Cash 101 1764 28-Jun Accounts receivable 112 1600 Sales revenue 401 1600 Cost of goods sold 505 970 Inventory 120 970 30-Jun Sales returns and allowances 412 120 Accounts receivable 112 120 Inventory 120 72 Cost of goods sold 505 72

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