Question

Problem 5-1A

June 1		Purchased books on account for $1,300 from Kline Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $40 for the freight on this date.
3		Sold books on account to Reading Rainbow for $2,400. The cost of the books sold was $680.
6		Received $150 credit for books returned to Kline Publishers.
9		Paid Kline Publishers in full, less discount.
15		Received payment in full from Reading Rainbow.
17		Sold books on account to Blanco Books for $2,300. The cost of the books sold was $1,380.
20		Purchased books on account for $1,150 from Dietz Publishers, FOB destination, terms 2/15, n/30. The appropriate party also made a cash payment of $40 for the freight on this date.
24		Received payment in full from Blanco Books.
26		Paid Dietz Publishers in full, less discount.
28		Sold books on account to Reddy Bookstore for $1,500. The cost of the books sold was $950.
30		Granted Reddy Bookstore $130 credit for books returned costing $78.

Ayayai’s Book Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Ayayai’s inventory consisted of books purchased for $1,500. During June, the following merchandising transactions occurred.

Ayayai’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.

Answer 1

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Date	Account	Debit	Credit
Jun 1	Inventory	$    1,300
	Accounts Payable		$    1,300
Jun 3	Accounts Receivable	$    2,400
	Sales Revenue		$    2,400
	Cost of goods sold	$        680
	Inventory		$        680
Jun 6	Accounts Payable	$        150
	Inventory		$        150
Jun 9	Accounts Payable	$    1,150
	Inventory ($1,150*2%)		$          23
	Cash		$    1,127
Jun 15	Cash	$    2,400
	Accounts Receivable		$    2,400
Jun 17	Accounts Receivable	$    2,300
	Sales Revenue		$    2,300
	Cost of goods sold	$    1,380
	Inventory		$    1,380
Jun 20	Inventory	$    1,150
	Accounts Payable		$    1,150
Jun 24	Cash	$    2,254
	Sales Discount ($2,300*2%)	$          46
	Accounts Receivable		$    2,300
Jun 26	Accounts Payable	$    1,150
	Inventory ($1,150*2%)		$          23
	Cash		$    1,127
Jun 28	Accounts Receivable	$    1,500
	Sales Revenue		$    1,500
	Cost of goods sold	$        950
	Inventory		$        950
Jun 30	Sales return and allowance	$        130
	Accounts Receivable		$        130
	Inventory	$          78
	Cost of goods sold		$          78