Book Nook Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its

Question

Book Nook 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, Book Nook's inventory consisted of books purchased for €1,800. During June, the following merchandising transactions occurred. June 1Purchased books on account for $2,850 from Bees Publishers, FOB shipping point, terms 2/10, n/30. They paid $150 for the freight on this date. 3 Sold books on account to DAR for $3,500. The cost of the books sold was $2,800. 6 Received $300 credit for books returned to Bees Publishers. 9 Pald Bees Publishers in full 15 Received payment in full from DAR Required Journalize the above transactions using perpetual system (Show us the ending balance of inventory IT account 2

Help In Homework · Accepted Answer

Answer: 2/10 n/30 means 2% discount will be given if the payments received within 10 days and total payments should be received within 30 days. WN -1 Bees Publishers A/C Purchases 2850 Returns -300 Total 2550 Less : Discount @2% 51 Due 2499 Freights 150 Total Due 2649 Discount is only taken on value of books purchased. Date Account Title and Explanation Amount ($) Dr Cr Jun-01 Purchase A/C Dr 2850 To Bees Publishers 2850 [Being books purchased from Bees Publishers on Credit ] Jun-01 Freights A/C Dr 150 To Bees Publishers 150 [Being freights are paid by Bees publishers on purchase of Books] Jun-03 DAR A/C Dr 3500 To Sales A/C 3500 [Being goods sold to DAR] Jun-06 Bees Publishers A/C Dr 300 To Purchase returns A/C 300 [Being Books returned to Bees Publishers] Jun-09 Bees Publishers A/C Dr 2649 To Bank A/C 2649 [Being payments made to Bees Publishers] WN -1 Jun-09 Bees Publishers A/C Dr 51 To Discount received A/C 51 [Being Discount received from Bees Publishers] WN -1 Jun-15 Bank A/C Dr 3500 To DAR A/C 3500 [Being payments received From DAR] Calculation of Ending balance of Inventory Particulars Amount ($) Opening inventory 1800 Purchases 2850 Books available for sale 4650 Less : Cost of Books sold 2800 Closing Inventory 1850

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Book Nook Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers

Expert Solution

Archived Solution

Bees Publishers A/C
Purchases	2850
Returns	-300
Total	2550
Less : Discount @2%	51
Due	2499
Freights	150
Total Due	2649

Date	Account Title and Explanation	Amount ($)
Dr	Cr
Jun-01	Purchase A/C Dr	2850
	To Bees Publishers		2850
*[Being books purchased from Bees Publishers on Credit ]*

Jun-01	Freights A/C Dr	150
	To Bees Publishers		150
*[Being freights are paid by Bees publishers on purchase of Books]*

Jun-03	DAR A/C Dr	3500
	To Sales A/C		3500
*[Being goods sold to DAR]*

Jun-06	Bees Publishers A/C Dr	300
	To Purchase returns A/C		300
*[Being Books returned to Bees Publishers]*

Jun-09	Bees Publishers A/C Dr	2649
	To Bank A/C		2649
*[Being payments made to Bees Publishers] WN -1*

Jun-09	Bees Publishers A/C Dr	51
	To Discount received A/C		51
*[Being Discount received from Bees Publishers] WN -1*

Jun-15	Bank A/C Dr	3500
	To DAR A/C		3500
*[Being payments received From DAR]*

Calculation of Ending balance of Inventory
Particulars	Amount ($)
Opening inventory	1800
Purchases	2850
Books available for sale	4650
Less : Cost of Books sold	2800
Closing Inventory	1850