Problem 5-1A Kern’s Book Warehouse distributes hardcover books to retail stores

Question

Problem 5-1A

Kern’s Book Warehouse distributes hardcover books to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of May, Kern’s inventory consisted of books purchased for $2,400. During June, the following merchandising transactions occurred.

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.

Journalize the transactions for the month of June for Kern’s Book Warehouse using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

June 1 Purchased books on account for $2,100 from Binsfeld Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $60 for the freight on this date. 3 Sold books on account to Reading Rainbow for $2,300. The cost of the books sold was $1,600. 6 Received $150 credit for books returned to Binsfeld Publishers. 9 Paid Binsfeld Publishers in full, less discount. 15 Received payment in full from Reading Rainbow. 17 Sold books on account to Rapp Books for $1,600. The cost of the books sold was $960. 20 Purchased books on account for $1,600 from McGinn Publishers, FOB destination, terms 1/15, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. 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 $1,300. The cost of the books sold was $970. 30 Granted Baeten Bookstore $170 credit for books returned costing $102. Kern's Bock Warehouse distributes hardcover books to retail stores and extends credit terms of 1/10, n/3U to all of its customers. At the end of May, Kern's inventory consisted of books purchased for $2,400. During June, the followirg merchandising transacticns occurred. une 1 Purchasad hoaks an accnunt tor $2,100 from Binsteld Publishers, FOB destinarion, terms 2/10, y30. The approprlate party alsn mada a cash payment ot s60 tor the fra ght on this date 3 Sold Looks g" dcuount w Reddinu Rairouw ru 2,300. The usl ur Une kuks sold was$1,500. ? Received $150 credit for boos retumed to einsfeld Publishers. Paid einsfeld Publishers in full, less distount. ?? Received ayment in full from Reading Rainbow. 17 sold books on account to Rapp Bocks for $1,00U. Ihe cost of the books sold was 90. 20 purchased books on arenunt for s no rom ricsinn Publishers, FOB destlnat on terms ins n 30. The appropriate party a so mad? a cash payment nf *50 or the fraight on this data. 21 Reccived payment in full from Rapp Books. 26 Paid McGinn Publishers in full,les dscount. 29 Sold books on account tw Baeten Bouksture fur $1,300. The cost of the books sulu was s970. 30 Granted Baeten Bookstore $170 credit tor books retumed costing $102 Kem s Ron war hnusa arte accounts Includes the fnllnwing: No. In1 cash Na. I 17 Accourts Renal ab . Na 120 tn en cry No. 701 Acnounts payable No. 401 Sales RAVen ? Na 412 Salas Retume and Allawancas, No. 414 5a es n snount, and No. S S Cost cf Gonds Sold y systesm. (Credit automaticaly indented Record journal entries presented in the problem Date Account litles and Explanation Debet Credit June 1 Inventory Accouts Payable 21U0

Explanation / Answer

Kern's Book Warehouse General Journal for the month of June Date Account Title Debit Credit June.1 Inventory 2100 Accounts Payable 2100 (Purchase of books on account from Binsfed) June.3 Accounts Receivable 2300 Sales 2300 (Sale of books on accountto Reading Rainbow) Cost of goods sold 1600 Inventory 1600 (Cost of the books sold above) June.6 Accounts Payable 150 Inventory 150 (Credit received for the return of books to Binsfed ) June.9 Accounts Payable 1950 Cash 1911 Inventory 39 (Payment made to Binsfed) June.15 Cash 2300 Accounts Receivable 2300 (Payment received from Reading Rainbow) June.17 Accounts Receivable 1600 Sales 1600 (Sale of books on accountto Rapp Books) Cost of goods sold 960 Inventory 960 (Cost of the books sold to Rapp Books) June.20 Inventory 1600 Accounts Payable 1600 (Purchase of books on account from McGinn) June.24 Cash 1600 Accounts Receivable 1600 (Payment received from Rapp Books) June.26 Accounts Payable 1600 Cash 1584 Inventory 16 (Payment made to McGinn) June.28 Accounts Receivable 1300 Sales 1300 (Sale of books on account to Beaten Bookstore) Cost of goods sold 970 Inventory 970 (Cost of the books sold to Beaten Bookstore) June.30 Sales Returns and allowances 170 Accounts Receivable 170 (Credit granted to Beaten Bookstore for return of books) Inventory 102 Cost of goods sold 102 (Cost of the books returned by Beaten Bookstore)

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