Sales Returns and Allowances Assignment | Top Universities
Jeremy’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, Jeremy’s inventory consisted of books purchased for $1,800. During June, the following merchandising transactions occurred. June 1 Purchased books on account for $1,600 from Davies Publishers, FOB destination, terms 2/10, n/30.
The appropriate party also made a cash payment of $50 for the freight on this date. 3 Sold books on account to Reading Rainbow for $2,500. The cost of the books sold was$1,440. 6 Received $100 credit for books returned to Davies Publishers. 9 Paid Davies Publishers in full, less discount. 15 Received payment in full from Reading Rainbow. 17 Sold books on account to Lapidus Books for $1,800. The cost of the books sold was$1,080. 20 Purchased books on account for $1,500 from Fahey Publishers, FOB destination, terms2/15, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. 24 Received payment in full from Lapidus Books. 26 Paid Fahey Publishers in full, less discount. 28 Sold books on account to Carlyle Bookstore for $1,400. The cost of the books sold was$850. 30 Granted Carlyle Bookstore $120 credit for books returned costing $72.Jeremy’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. Get Accounting Homework Help Today.