CheCk ny we The transactions listed below are typical of those involving New Books Inc. and Readers' Corner. New Books is a wholesale merchandiser and Readers' Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers' Corner are made with terms 2/10, n/30, and that the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31. a. New Books sold merchandise to Readers' Corner at a selling price of $630,000. The merchandise cost New Books $447,000o b. Two days later, Readers' Corner complained to New Books that some of the merchandise differed from what Readers' Corner had ordered. New Books agreed to give an allowance of $11,500 to Readers' Corner. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. Required: 1. For each of the events (a) through (C), indicate the amount and direction of the effect on New Books in terms of the following items (Enter any decreases to account balances with a minus sign.) Sales Returns and Allowances Net Sales Cost of Goods Sold Transaction Sales Revenues Sales Discounts Gross Profit 630,000 b.

Question
CheCk ny we
The transactions listed below are typical of those involving New Books Inc. and Readers' Corner. New Books is a wholesale
merchandiser and Readers' Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers' Corner are
made with terms 2/10, n/30, and that the two companies use perpetual inventory systems. Assume the following transactions between
the two companies occurred in the order listed during the year ended August 31.
a. New Books sold merchandise to Readers' Corner at a selling price of $630,000. The merchandise cost New Books $447,000o
b. Two days later, Readers' Corner complained to New Books that some of the merchandise differed from what Readers' Corner had
ordered. New Books agreed to give an allowance of $11,500 to Readers' Corner.
c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed.
Required:
1. For each of the events (a) through (C), indicate the amount and direction of the effect on New Books in terms of the following items
(Enter any decreases to account balances with a minus sign.)
Sales Returns and
Allowances
Net Sales
Cost of Goods Sold
Transaction
Sales Revenues
Sales Discounts
Gross Profit
630,000
b.
Expand
Transcribed Image Text

CheCk ny we The transactions listed below are typical of those involving New Books Inc. and Readers' Corner. New Books is a wholesale merchandiser and Readers' Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers' Corner are made with terms 2/10, n/30, and that the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31. a. New Books sold merchandise to Readers' Corner at a selling price of $630,000. The merchandise cost New Books $447,000o b. Two days later, Readers' Corner complained to New Books that some of the merchandise differed from what Readers' Corner had ordered. New Books agreed to give an allowance of $11,500 to Readers' Corner. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. Required: 1. For each of the events (a) through (C), indicate the amount and direction of the effect on New Books in terms of the following items (Enter any decreases to account balances with a minus sign.) Sales Returns and Allowances Net Sales Cost of Goods Sold Transaction Sales Revenues Sales Discounts Gross Profit 630,000 b.

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