Required information PA6-2 Reporting Sales Transactions between Wholesale and Retail Merchandisers Using Perpetual Inventory Systems [LO 6-4, LO 6-6] [The following information applies to the questions displayed below.] 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 n/30, and 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. New Books sold merchandise to Readers’ Corner at a selling price of $620,000. The merchandise had cost New Books $443,000. 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 $10,500 to Readers’ Corner. Readers’ Corner also returned some books, which had cost New Books $3,400 and had been sold to Readers’ Corner for $4,900. Just three days later, Readers’ Corner paid New Books, which settled all amounts owed. PA6-2 Part 2 Prepare the journal entries to record New Books transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 7E: Record the following transactions for a perpetual inventory system in general journal form. a. Sold...

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Required information

PA6-2 Reporting Sales Transactions between Wholesale and Retail Merchandisers Using Perpetual Inventory Systems [LO 6-4, LO 6-6]

[The following information applies to the questions displayed below.]

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 n/30, and 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.

New Books sold merchandise to Readers’ Corner at a selling price of $620,000. The merchandise had cost New Books $443,000.
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 $10,500 to Readers’ Corner. Readers’ Corner also returned some books, which had cost New Books $3,400 and had been sold to Readers’ Corner for $4,900.
Just three days later, Readers’ Corner paid New Books, which settled all amounts owed.

PA6-2 Part 2

Prepare the journal entries to record New Books transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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