Question

Powell Warehouse distributes hardback books to retail stores and extends credit terms of 4/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred.

June 1 Purchased books on account for $2,840 (including freight) from Catlin Publishers, terms 4/10, n/30.
3 Sold books on account to Garfunkel Bookstore for $1,050. The cost of the merchandise sold was $700.
6 Received $40 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 $1,050. The cost of the merchandise sold was $750.
20 Purchased books on account for $700 from Priceless Book Publishers, terms 2/15, 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 $2,600. The cost of the merchandise sold was $750.
30 Granted General Bookstore $260 credit for books returned costing $65.

Journalize the transactions for the month of June for Powell Warehouse, using a perpetual inventory system

Answer 1

June 1

Dr Inventory 2840

Cr Accounts Payable 2840

June 3

Dr Accounts receivable 1050

Cr sales revenue 1050

Dr Cost of goods sold 700

Cr nventory 700

June 6

Dr Accounts payable40

Cr Inventory40

June 9

Dr Accounts payable 2,800

Cr Cash 2,744

Cr Inventory 56

June 15

Dr Cash 1050

Cr Accounts receivable 1050

June 17

Dr Accounts receivable 1050

Cr Sales revenue 1050

Dr Cost of Goods sold 750

Cr Inventory 750

June 20

Dr Inventory 700

Cr Accounts payable 700

June 24

Dr Cash 1029

Dr sales discounts 21

Cr Account receivable 1050

June 26

Dr Account payable 700

Cr Inventory 14

Cr Cash 686

June 28

Dr Account Receiveable 2600

Cr Sales Revenue 2600

Dr Cost of goods sold 750

Cr Inventory 750

June 30

Dr Sales return and allowance 260

Cr Account receivable 260

Dr Inventory 65

Cr Cost of goods sold 65

Explanation:

Powell Warehouse Journal entries

June 1

Dr Inventory 2840

Cr Accounts Payable 2840

June 3

Dr Accounts receivable 1050

Cr sales revenue 1050

Dr Cost of goods sold 700

Cr nventory 700

June 6

Dr Accounts payable40

Cr Inventory40

June 9

Dr Accounts payable 2,800

(2,840-40)

Cr Cash 2,744

Cr Inventory 56

(2%×2,800)

June 15

Dr Cash 1050

Cr Accounts receivable 1050

June 17

Dr Accounts receivable 1050

Cr Sales revenue 1050

Dr Cost of Goods sold 750

Cr Inventory 750

June 20

Dr Inventory 700

Cr Accounts payable 700

June 24

Dr Cash 1029

Dr sales discounts 21

(2%×1050)

Cr Account receivable 1050

June 26

Dr Account payable 700

Cr Inventory (2%×700) 14

Cr Cash 686

June 28

Dr Account Receiveable 2600

Cr Sales Revenue 2600

Dr Cost of goods sold 750

Cr Inventory 750

June 30

Dr Sales return and allowance 260

Cr Account receivable 260

Dr Inventory 65

Cr Cost of goods sold 65