Question

Problem 5-1A

Kern’s Book Warehouse distributes hardcover books to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of May, Kern’s inventory consisted of books purchased for $2,400. During June, the following merchandising transactions occurred.

June 1		Purchased books on account for $2,100 from Binsfeld Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $60 for the freight on this date.
3		Sold books on account to Reading Rainbow for $2,300. The cost of the books sold was $1,600.
6		Received $150 credit for books returned to Binsfeld Publishers.
9		Paid Binsfeld Publishers in full, less discount.
15		Received payment in full from Reading Rainbow.
17		Sold books on account to Rapp Books for $1,600. The cost of the books sold was $960.
20		Purchased books on account for $1,600 from McGinn Publishers, FOB destination, terms 1/15, n/30. The appropriate party also made a cash payment of $50 for the freight on this date.
24		Received payment in full from Rapp Books.
26		Paid McGinn Publishers in full, less discount.
28		Sold books on account to Baeten Bookstore for $1,300. The cost of the books sold was $970.
30		Granted Baeten Bookstore $170 credit for books returned costing $102.

Kern's Book Warehouse's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Journalize the transactions for the month of June for Kern’s Book Warehouse using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Kern's Book Warehouse
General Journal for the month of June
Date	Account Title	Debit	Credit
June.1	Inventory	2100
	Accounts Payable		2100
	(Purchase of books on account from Binsfed)
June.3	Accounts Receivable	2300
	Sales		2300
	(Sale of books on accountto Reading Rainbow)
	Cost of goods sold	1600
	Inventory		1600
	(Cost of the books sold above)
June.6	Accounts Payable	150
	Inventory		150
	(Credit received for the return of books to Binsfed )
June.9	Accounts Payable	1950
	Cash		1911
	Inventory		39
	(Payment made to Binsfed)
June.15	Cash	2300
	Accounts Receivable		2300
	(Payment received from Reading Rainbow)
June.17	Accounts Receivable	1600
	Sales		1600
	(Sale of books on accountto Rapp Books)
	Cost of goods sold	960
	Inventory		960
	(Cost of the books sold to Rapp Books)
June.20	Inventory	1600
	Accounts Payable		1600
	(Purchase of books on account from McGinn)
June.24	Cash	1600
	Accounts Receivable		1600
	(Payment received from Rapp Books)
June.26	Accounts Payable	1600
	Cash		1584
	Inventory		16
	(Payment made to McGinn)
June.28	Accounts Receivable	1300
	Sales		1300
	(Sale of books on account to Beaten Bookstore)
	Cost of goods sold	970
	Inventory		970
	(Cost of the books sold to Beaten Bookstore)
June.30	Sales Returns and allowances	170
	Accounts Receivable		170
	(Credit granted to Beaten Bookstore for return of books)
	Inventory	102
	Cost of goods sold		102
	(Cost of the books returned by Beaten Bookstore)