Question

Bridgeport Book Warehouse Ltd. distributes hardcover books to retail stores. At the end of May, Bridgeport’s inventory consists of 260 books purchased at $ 16each. Bridgeport uses a perpetual inventory system.

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

June	1		Purchased 180 books on account for $ 14 each from Reader’s World Publishers, terms n/45.
	3		Sold 210 books on account to The Book Nook for $ 25 each, with an assumed average cost of $ 15, terms 2/10, n/45.
	5		Received a $ 140 credit for 10 books returned to Reader’s World Publishers.
	8		Sold 70 books on account to Read-A-Lot Bookstore for $ 21 each, with an assumed average cost of $ 15, terms 2/10, n/45.
	9		Issued a $ 252 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 $ 14 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 $ 27 each, with an assumed average cost of $ 15, terms 2/10, n/45.
	25		Granted Reader’s Bookstore a $ 378 credit for 14 returned books. These books were restored to inventory.
	29		Paid Reader’s World Publishers in full. 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

Answer 1

A	B	C	D	E	F	G	H	I	J
2
3		In journal entry, when assets and expense increases it is debited,
4		when liabilities, equity and revenue increases it is credited.
5
6		Journal entry for transactions are as follows:
7
8		Date	Account	Debit	Credit
9		1-Jun	Inventory ( 180*$14 )	$2,520
10			Accounts Payable		$2,520
11
12		3-Jun	Account Receivables	$5,250
13			Sales Revenue (210*$25)		$5,250
14			(For Sale)
15			Cost of Goods (210*$15)	$3,150
16			Finished Goods		$3,150
17			(For Cost of goods sold)
18
19		5-Jun	Accounts Payable	$140
20			Purchase returns and allowance		$140
21
22		8-Jun	Account Receivables	$1,470
23			Sales Revenue (70*$21)		$1,470
24			(For Sale)
25			Cost of Goods (70*$15)	$1,050
26			Finished Goods		$1,050
27			(For Cost of goods sold)
28
29		9-Jun	Sales return and allowances	$252
30			Accounts Receivables		$252
31
32		11-Jun	Inventory ( 130*$14 )	$1,820
33			Accounts Payable		$1,820
34
35		12-Jun	Cash	$5,145
36			Sales discounts (2%*$5250)	$105		(As amount paid in 10 days)
37			Accounts receivables		$5,250
38
39		17-Jun	Cash	$1,194
40			Sales discounts (2%*$1218)	$24.36		(As amount paid in 10 days)
41			Accounts receivables		$1,218
42
43		22-Jun	Account Receivables	$3,375
44			Sales Revenue (125*$27)		$3,375
45			(For Sale)
46			Cost of Goods (125*$15)	$1,875
47			Finished Goods		$1,875
48			(For Cost of goods sold)
49
50		25-Jun	Sales return and allowances	$378
51			Accounts Receivables		$378
52
53			Inventory (14*$15)	$210
54			Cost of goods sold		$210
55
56		29-Jun	Accounts Payable	$2,520
57			Cash		$2,520
58
59

Formula sheet

A	B	C	D	E	F	G	H	I	J
2
3		In journal entry, when assets and expense increases it is debited,
4		when liabilities, equity and revenue increases it is credited.
5
6		Journal entry for transactions are as follows:
7
8		Date	Account	Debit	Credit
9		43252	Inventory ( 180*$14 )	=180*14
10			Accounts Payable		=E9
11
12		43254	Account Receivables	=F13
13			Sales Revenue (210*$25)		=210*25
14			(For Sale)
15			Cost of Goods (210*$15)	=210*15
16			Finished Goods		=E15
17			(For Cost of goods sold)
18
19		43256	Accounts Payable	140
20			Purchase returns and allowance		=E19
21
22		43259	Account Receivables	=F23
23			Sales Revenue (70*$21)		=70*21
24			(For Sale)
25			Cost of Goods (70*$15)	=70*15
26			Finished Goods		=E25
27			(For Cost of goods sold)
28
29		43260	Sales return and allowances	252
30			Accounts Receivables		=E29
31
32		43262	Inventory ( 130*$14 )	=130*14
33			Accounts Payable		=E32
34
35		43263	Cash	=F37-E36
36			Sales discounts (2%*$5250)	=F37*2%		(As amount paid in 10 days)
37			Accounts receivables		=E12
38
39		43268	Cash	=F41-E40
40			Sales discounts (2%*$1218)	=F41*2%		(As amount paid in 10 days)
41			Accounts receivables		=E22-F30
42
43		43273	Account Receivables	=F44
44			Sales Revenue (125*$27)		=125*27
45			(For Sale)
46			Cost of Goods (125*$15)	=125*15
47			Finished Goods		=E46
48			(For Cost of goods sold)
49
50		43276	Sales return and allowances	378
51			Accounts Receivables		=E50
52
53			Inventory (14*$15)	=14*15
54			Cost of goods sold		=E53
55
56		43280	Accounts Payable	=F10
57			Cash		=E56
58
59