Question

Cullumber 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 Purchased books on account for $2,160 (including freight) from Catlin
Publishers, terms 2/10, n/30.
3 Sold books on account to Garfunkel Bookstore for $1,000. The cost of
the merchandise sold was $800.
6 Received $60 credit for books returned to Catlin Publishers.
9 Paid Catlin Publishers in full.
15 Received payment in full from Garfunkel Bookstore.
17 Sold books on account to Bell Tower for $1,700. The cost of the
merchandise sold was $950.
20 Purchased books on account for $900 from Priceless Book Publishers,
terms 3/15, n/30.
24 Received payment in full from Bell Tower.
26 Paid Priceless Book Publishers in full.
28 Sold books on account to General Bookstore for $1,950. The cost of the
merchandise sold was $980.
30 Granted General Bookstore $140 credit for books returned costing $50.

Required:
Journalize the transactions for the month of June for Cullumber Warehouse, using a perpetual inventory system. (If no entry is required, write "No Entry" for the account titles and enter 0 for the amounts. )

Answer 1

Answer and Explanation:

The journal entries are shown below:

On Jun 1

Merchandise Inventory $2,160

To accounts payable $2,160

(Being the purchased books on account is recorded)

On Jun 3

Accounts receivable $1,000

To sales revenue $1,000

(Being the credit sales is recorded)

Cost of goods sold $800

To Merchandise Inventory $800

(Being the cost of merchandise sold is recorded)

On Jun 6

Accounts payable $60

To Merchandise Inventory $60

(Being books returned is recorded)

On Jun 9

Accounts payable $2,100 ($2,160 - $60)

To Merchandise Inventory ($2,100 × 2%) $42

To cash $2,058

(Being payment fully paid at discount)

On Jun 15

Cash $1,000

To accounts receivable $1,000

(Being received payment is recorded)

On Jun 17

Accounts receivable $1,700

To sales revenue $1,700

(Being the credit sales is recorded )

Cost of goods sold $950

To Merchandise Inventory $950

(Being the cost of merchandise sold is recorded)

On Jun 20

Merchandise Inventory $900

To accounts payable $900

(Being the purchases made on account is recorded)

On Jun 24

Cash $1,666

Sales Discounts ($1,700 × 2%) $34

To Accounts receivable $1,700

(Being the payment received fully at discount is recorded)

On Jun 26

Accounts payable $900

To Merchandise Inventory ($900 × 3%) $27

To cash $873

(Being the payment is recorded)

On Jun 28

Accounts receivable $1,950

To sales revenue $1,950

(Being the credit sales is recorded)

Cost of goods sold $980

To Merchandise Inventory $980

(Being the cost of merchandise sold is recorded)

On Jun 30

Sales returns and allowances $140

To accounts receivable $ 140

(Being the sales returns is recorded)

Merchandise Inventory $50

To cost of goods sold $50

(Being the cost of merchandise returned is recorded)