Question

Sheffield Book Warehouse Ltd. distributes hardcover books to retail stores. At the end of May, Sheffield’s inventory consists of 230 books purchased at $ 17 each. Sheffield uses a perpetual inventory system.

During the month of June, the following merchandise transactions occurred:

June	1		Purchased 160 books on account for $ 15 each from Reader’s World Publishers, terms n/45.
	3		Sold 220 books on account to The Book Nook for $ 25 each, with an assumed average cost of $ 16, terms 2/10, n/45.
	5		Received a $ 150 credit for 10 books returned to Reader’s World Publishers.
	8		Sold 70 books on account to Read-A-Lot Bookstore for $ 22 each, with an assumed average cost of $ 16, terms 2/10, n/45.
	9		Issued a $ 264 credit memorandum to Read-A-Lot Bookstore for the return of 12 damaged books. The books were determined to be no longer saleable and were destroyed.
	11		Purchased 130 books on account for $ 16 each from Read More Publishers, terms n/45.
	12		Received payment in full from The Book Nook.
	17		Received payment in full from Read-A-Lot Bookstore.
	22		Sold 125 books on account to Reader’s Bookstore for $ 23 each, with an assumed average cost of $ 16, terms 2/10, n/45.
	25		Granted Reader’s Bookstore a $ 322 credit for 14 returned books. These books were restored to inventory.
	29		Paid Reader’s World Publishers in full.

Is the Sheffield Book Warehouse a retailer or a wholesaler?

The Sheffield Book Warehouse is a   wholesalerretailer.

Record the June transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all answers to 0 decimal places, e.g. 125. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
June 1
3
	(To record sales)
3
	(To record cost of goods sold)
5
8
	(To record sales)
8
	(To record cost of goods sold)
9
11
12
17
22
	(To record sales)
22
	(To record cost of goods sold)
25
	(To record sales returns)
25
	(To record cost of goods returned)
29

Create a T account for the Inventory account. Enter the opening balance, post the June transactions related to Inventory, and determine the ending balance in the account.

Inventory
Determine the number of books Sheffield has on hand on June 30. What is the average cost of these books on June 30? (Hint: Divide the ending balance in the Inventory account calculated in part (c) and divide it by the number of books on hand at June 30.) (Round average cost per book to 2 decimal places, e.g. 5.25.) Books on hand at June 30 Average cost per book $

Answer 1

1-Jun	Inventory a/c		2400
		To Reader's world publisher	2400
3-Jun	Book Nook a/c		5500
		To sale	5500
	COGS a/c		3520
		To inventory	3520
5-Jun	Reader's world publisher		150
		To inventory	150
8-Jun	Read a lot a/c		1540
		To sale	1540
	COGS a/c		1120
		To inventory	1120
9-Jun	sale return a/c		264
		To Read a lot a/c	264
	Inventory a/c		192
		To Cogs	192
	Profit & loss		192
		To inventory loss	192
11-Jun	Inventory a/c		2080
		To Read MORE PUB	2080
12-Jun	Cash a/c		5390
	Discount on sale a/c		110
		To Book Nook a/c	5500
17-Jun	Cash a/c		1250
	Discount on sale a/c		26
		To Read a lot a/c	1276
22-Jun	Readers bookstore a/c		2875
		To sale	2875
	Cogs a/c		2000
		To inventory	2000
25-Jun	sale return a/c		322
		To Readers bookstore a/c	322
	Inventory a/c		224
		To Cogs	224
29-Jun	Reader's world		2250
		To cash	2250

	INVENTORY a/c
part	amt	part	amt
To b/d (230*17)	3910	By Reader's world publisher	150
To Reader's world publisher	2400	By COGS a/c	3520
To COGS	192	By COGS a/c	1120
To Read MORE PUB	2080	By profit & loss	192
To Cogs	224	By COGS a/c	2000
		By c/d	1824
Total	8806	Total	8806

books on hand at june 30= 129

avg cost=1824/129 =14.14