Question

Current Attempt in Progress Concord's 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 3 6 9 15 17 20 24 26 28 30 Purchased books on account for $1,010 (including freight) from Catlin Publishers, terms 2/10, n/30. Sold books on account to Garfunkle Bookstore for $1,150. The cost of the books sold was $710. Received $10 credit for books returned to Catlin Publishers. Paid Catlin Publishers in full. Received payment in full from Garfunkle Bookstore. Sold books on account to Bell Tower for $1,200. The cost of the merchandise sold was $670. Purchased books on account for $770 from Priceless Book Publishers, terms 1/15, n/30. Received payment in full from Bell Tower. Paid Priceless Book Publishers in full. Sold books on account to General Bookstore for $1,290. The cost of the merchandise sold was $730. Granted General Bookstore $120 credit for books returned costing $80.

Answer 1

The student's question pertains to accounting entries related to purchase and sales transactions of a book distribution warehouse. Each transaction, such as purchases, sales, receiving payments, and applying discounts, affects the company's inventory, accounts payable, and receivable. The calculations involve applying terms of credit and discounts offered and received.

Step-by-step explanation:

The student's question is related to accounting transactions for a warehouse that distributes hardback books. The given information indicates a series of purchase and sales transactions on account, accounting for discounts, returns, and receipts of payments. To calculate the impact of each transaction on Concord's Warehouse, one would typically utilize the principles of double-entry bookkeeping, recording each transaction in corresponding debit and credit accounts. For instance:

When Concord's Warehouse purchased books for $1,010, it records a debit to Inventory and a credit to Accounts Payable.

Upon selling books for $1,150, it records a debit to Accounts Receivable and credits Sales Revenue, while also debiting Cost of Goods Sold and crediting Inventory for $710.

For the early payment within discount terms, the payment to Catlin Publishers would include a credit to Accounts Payable and a debit to Cash and a potential Inventory or Purchases Discount account for the $10 credit received.

Each transaction reflects a different aspect of the business's operations—purchasing inventory, selling goods, receiving payments, and managing accounts payable and receivable. Computing the final impact of all these transactions on Concord's Warehouse's financial statements would require totaling the debits and credits and applying the terms provided for each credit arrangement.