Question

Powell Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred. June 1 Purchased books on account for $1,040 (including freight) from Catlin Publishers, terms 2/10, n/30. 3 Sold books on account to Garfunkel Bookstore for $1,200. The cost of the merchandise sold was $720. 6 Received $40 credit for books returned to Catlin Publishers. 9 Paid Catlin Publishers in full. 15 Received payment in full from Garfunkel Bookstore. 17 Sold books on account to Bell Tower for $1,200. The cost of the merchandise sold was $730. 20 Purchased books on account for $720 from Priceless Book Publishers, terms 1/15, n/30. 24 Received payment in full from Bell Tower. 26 Paid Priceless Book Publishers in full. 28 Sold books on account to General Bookstore for $1,300. The cost of the merchandise sold was $780. 30 Granted General Bookstore $130 credit for books returned costing $80.
Journalize the transactions for the month of June for Powell Warehouse, using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to 0 decimal places e.g. 15,222.)

Answer 1

Answer:

01-Jun

Dr Inventory $1,040

Cr Accounts Payable $1,040

03-Jun

Dr Accounts Receivable $1,200

Cr Sales $1,200

03-Jun

Dr Cost of goods sold $720

Cr Inventory $720

06-Jun

Dr Accounts Payable $40

Cr Inventory $40

09-Jun

Dr Accounts Payable $ 1,000

Cr Cash $ 980

Cr Inventory $ 20

15-Jun

Dr Cash $1,200

Cr Accounts Receivable $1,200

17-Jun

Dr Accounts Receivable $1,200

Cr Sales $1,200

17-Jun

Dr Cost of goods sold $730

Cr Inventory $730

20-Jun

Dr Inventory $720

Cr Accounts Payable $720

24-Jun

Dr Cash $1,176

Dr Sales Discounts $ 24

Cr Accounts Receivable $ 1,200

26-Jun

Dr Accounts Payable $720

Cr Cash $ 712.8

Cr Inventory $ 7.2

28-Jun

Dr Accounts Receivable $1,300

Cr Sales $1,300

28-Jun

Dr Cost of goods sold $780

Cr Inventory $780

30-Jun

Dr Sales Returns & Allowances $130

Cr Accounts Receivable $130

30-Jun

Dr Inventory $80

Cr Cost of goods sold $80

Explanation:

Preparation of the Journal entry for the month of June for Powell Warehouse, using a perpetual inventory system

Journal entries

01-Jun

Dr Inventory $1,040

Cr Accounts Payable $1,040

03-Jun

Dr Accounts Receivable $1,200

Cr Sales $1,200

03-Jun

Dr Cost of goods sold $720

Cr Inventory $720

06-Jun

Dr Accounts Payable $40

Cr Inventory $40

09-Jun

Dr Accounts Payable $ 1,000 (1,040-40)

Cr Cash $ 980

Cr Inventory $ 20

(1000*2%)

15-Jun

Dr Cash $1,200

Cr Accounts Receivable $1,200

17-Jun

Dr Accounts Receivable $1,200

Cr Sales $1,200

17-Jun

Dr Cost of goods sold $730

Cr Inventory $730

20-Jun

Dr Inventory $720

Cr Accounts Payable $720

24-Jun

Dr Cash $1,176

(1,200-24)

Dr Sales Discounts $ 24 (1,200*2%)

Cr Accounts Receivable $ 1,200

26-Jun

Dr Accounts Payable $720

Cr Cash $ 712.8

(720-7.2)

Cr Inventory $ 7.2

($720*1%)

28-Jun

Dr Accounts Receivable $1,300

Cr Sales $1,300

28-Jun

Dr Cost of goods sold $780

Cr Inventory $780

30-Jun

Dr Sales Returns & Allowances $130

Cr Accounts Receivable $130

30-Jun

Dr Inventory $80

Cr Cost of goods sold $80