Question

Suppose Rainforest sells 2 comma 000 books on account for $ 19 each​ (cost of these books is $ 22 comma 800​) on October ​10, 2018 to ABC Store. One hundred of these books​ (cost $ 1 comma 140​) were damaged in​ shipment, so Rainforest later received the damaged goods from ABC Store as sales returns on October ​13, 2018. ​(Assume both companies use a perpetual inventory system and that sales are recorded at the net​ amount.) Read the requirements LOADING.... Requirement 1. Journalize ABC Store​'s October 2018 transactions. ​(Record debits​ first, then credits. Exclude explanations from journal​ entries.) Oct. ​10: ABC Store purchased 2 comma 000 books on account for $ 19 each from Rainforest.

Answer 1

Answer:

Journal entries for ABC Store's

inventory   38,000

  account payable 38,000

to record purchase of 2,000 books

account payable 1,900

   inventory                  1,900

to record return of 100 damaged books

Explanation:

Requirement 1 journalize ABC Store's

We need to journalize base on ABC store. Assuming perpetual inventory.

ABC purchased 2,000 books at $19 each total 38,000

we increase our inventory for the amount purchased and also declare the liability, as those book were not paid right away

later it return 100 books the cost is $19 each total 1,900

this decrease the ammount due to Rainforest and also decrease the inventory