Answer:
Pharoah Warehouse
Journal Entries:
June 1: Debit Inventory $2,490
Credit Accounts Payable (Catlin Publishers) $2,490
To record the purchase of inventory on account, terms 2/10, n/30.
June 3: Debit Accounts Receivable (Garfunkel Bookstore) $1,300
Credit Sales Revenue $1,300
To record the sale of goods on account with usual credit terms.
Debit Cost of Goods Sold $900
Credit Inventory $900
To record the cost of goods sold.
June 6: Debit Accounts Payable (Catlin Publishers) $90
Credit Inventory $90
To record the return of inventory.
June 9: Debit Accounts Payable (Catlin Publishers) $2,400
Credit Cash $2,352
Credit Cash Discount $48
To record the payment on account.
June 15: Debit Cash $1,300
Credit Accounts Receivable (Garfunkel Bookstore) $1,300
To record the cash collection on account.
June 17: Debit Accounts Receivable (Bell Tower) $1,700
Credit Sales Revenue $1,700
To record the sale of goods on account.
Debit Cost of Goods Sold $800
Credit Inventory $800
To record the cost of goods sold.
June 20: Debit Inventory $800
Credit Accounts Payable (Priceless Book Publishers) $800
To record the purchase of goods on account, terms 2/15, n/30.
June 24: Debit Cash $1,666
Debit Cash Discounts $34
Credit Accounts Receivable (Bell Tower) $1,700
To record the collection of cash on account.
June 26: Debit Accounts Payable (Priceless Book Publishers) $800
Credit Cash $784
Credit Cash Discounts $16
To record payment on account.
June 28: Debit Accounts Receivable (General Bookstore) $2,650
Credit Sales Revenue $2,650
To record the sale of goods on account.
Debit Cost of Goods Sold $850
Credit Inventory $850
To record the cost of goods sold.
June 30: Debit Sales Returns $260
Credit Accounts Receivable (General Bookstore) $260
To record sales returns on account.
Debit Inventory $90
Credit Cost of Goods Sold $90
To record the cost of goods returned by a customer.
Explanation:
a) Data and Analysis:
Credit terms to all customers = 2/10, n/30. This means that 2% discount is granted to customers who pay within 10 days. Customers are expected to settle their accounts within 30 days after which, interest is charged on their accounts.
b) June 1: Inventory $2,490 Accounts Payable (Catlin Publishers) $2,490, terms 2/10, n/30.
June 3: Accounts Receivable (Garfunkel Bookstore) $1,300 Sales Revenue $1,300
Cost of Goods Sold $900 Inventory $900
June 6: Accounts Payable (Catlin Publishers) $90 Inventory $90
June 9: Accounts Payable (Catlin Publishers) $2,400 Cash $2,352 Cash Discount $48
June 15: Cash $1,300 Accounts Receivable (Garfunkel Bookstore) $1,300
June 17: Accounts Receivable (Bell Tower) $1,700 Sales Revenue $1,700
Cost of Goods Sold $800 Inventory $800
June 20: Inventory $800 Accounts Payable (Priceless Book Publishers) $800, terms 2/15, n/30.
June 24: Cash $1,666 Cash Discounts $34 Accounts Receivable (Bell Tower) $1,700
June 26: Accounts Payable (Priceless Book Publishers) $800 Cash $784 Cash Discounts $16
June 28: Accounts Receivable (General Bookstore) $2,650 Sales Revenue $2,650
Cost of Goods Sold $850 Inventory $850
June 30: Sales Returns $260 Accounts Receivable (General Bookstore) $260
Inventory $90 Cost of Goods Sold $90
