Problem 5-01A (Video) Sandhill\'s Book Warehouse distributes hardcover books to
ID: 2430148 • Letter: P
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Problem 5-01A (Video) Sandhill'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, Sandhill's inventory consisted of books purchased for $1,800. During June, the following merchandising transactions occurred. June 1 Purchased books on account for $1,600 from Binsfeld Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $40 for the freight on this date. Sold books on account to Reading Rainbow for $2,500. The cost of the books sold was $1,500. 6 Received $100 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 $1,500. The cost of the books sold was $900. 20 Purchased books on account for $1,500 from McGinn Publishers, FOB destination, terms 1/15, n/30. The appropriate party also made a cash payment of $60 for the freight on this date. 24 Received payment in full from Rapp Books. 26 Paid McGinn Publishers in full, less discount. 8 Sold books on account to Baeten Bookstore for $1,300. The cost of the books sold was 30 Granted Baeten Bookstore $160 credit for books returned costing $96. Sandhill'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 Sandhill'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.)Explanation / Answer
Solution:
June 1
Inventory ............................ 1,600
Accounts payable ................... 1,600
June 3
Accounts receivable ..................2,500
Sales Revenue ...........................2,500
Cost of goods sold .............. 1,500
Inventory ............................... 1,500
June 6
Accounts payable ................. 100
Inventory ................................ 100
June 9
Accounts payable (1,600 - 100) ............ 1,500
Inventory (1,500 x 0.02) ............................. 30
Cash ......................................................... 1,470
June 15
Cash ......................2,500
Accounts receivable .................2,500
June 17
Accounts receivable ................... 1,500
Sales Revenue ............................... 1,500
Cost of goods sold ................... 900
Inventory .............................. 900
June 20
Inventory .................. 1,500
Accounts payable ................ 1,500
June 24
Cash ...........................1470
Sales discount .............30 (1500 x 0.02)
Accounts receivable ....................1500
June 26
Accounts payable ......... 1485
Inventory .......................... 15 (1500 x 0.01)
Cash ......................1500
June 28
Accounts receivable ............ 1,300
Sales Revenue ..................... 1,300
Cost of goods sold .................. 970
Inventory ................................ 970
June 30
Sales return and allowances ................ 160
Accounts receivable ....................... 160
Inventory ........................ 96
Cost of goods sold ................. 96
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