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[The following information applies to the questions displayed below.) The transactions listed below are typical of those involving New Books Incorporated 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. a. New Books sold merchandise to Readers' Corner at a selling price of $575,000. The merchandise had cost New Books $425,000. 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 $12,500 to Readers' Corner, Readers' Corner also returned some books, which had cost New Books $2.500 and had been sold to Readers' Corner for $4,000. No further returns are expected. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. 2. Prepare the journal entries that Readers' Corner would record. (If no entry is required Entry Required in the first account field.) a transaction/event, select "No Journal

[The following information applies to the questions displayed below.) The transactions listed below are typical of those involving New Books Incorporated 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. a. New Books sold merchandise to Readers' Corner at a selling price of $575,000. The merchandise had cost New Books $425,000. 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 $12,500 to Readers' Corner, Readers' Corner also returned some books, which had cost New Books $2.500 and had been sold to Readers' Corner for $4,000. No further returns are expected. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. 2. Prepare the journal entries that Readers' Corner would record. (If no entry is required Entry Required in the first account field.) a transaction/event, select "No Journal

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 7PA: Selected data on merchandise inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks...
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Requirea information [The following information applies to the questions displayed below.) The transactions listed below are typical of those involving New Books Incorporated 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. a. New Books sold merchandise to Readers' Corner at a selling price of $575,000. The merchandise had cost New Books $425,000. 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 $12,500 to Readers' Corner, Readers' Corner also returned some books, which had cost New Books $2,500 and had been sold to Readers' Corner for $4,000. No further returns are expected. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. 2. Prepare the journal entries that Readers' Corner would record. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Record the purchase of $575,000 on account. 2 Record the return of unsatisfactory merchandise for which credit was given. 3 Record the payment in full. 1
Transcribed Image Text:Requirea information [The following information applies to the questions displayed below.) The transactions listed below are typical of those involving New Books Incorporated 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. a. New Books sold merchandise to Readers' Corner at a selling price of $575,000. The merchandise had cost New Books $425,000. 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 $12,500 to Readers' Corner, Readers' Corner also returned some books, which had cost New Books $2,500 and had been sold to Readers' Corner for $4,000. No further returns are expected. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. 2. Prepare the journal entries that Readers' Corner would record. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Record the purchase of $575,000 on account. 2 Record the return of unsatisfactory merchandise for which credit was given. 3 Record the payment in full. 1
Required information [The following information applies to the questions displayed below. The transactions listed below are typical of those involving New Books Incorporated 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. a New Books sold merchandise to Readers' Corner at a selling price of $575,000, The merchandise had cost New Books $425,000. 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 $12,500 to Readers' Comer. Readers' Corner also returned some books, which had cost New Books $2,500 and had been sold to Readers' Corner for $4,000. No further returns are expected. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. Required: 1. Indicate the amount and direction of the effect (+ for increase, - for decrease, and No effect) of each transaction on the inventory balance of Readers' Corner. Transaction a 0 Effect on Inventory Balance
Transcribed Image Text:Required information [The following information applies to the questions displayed below. The transactions listed below are typical of those involving New Books Incorporated 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. a New Books sold merchandise to Readers' Corner at a selling price of $575,000, The merchandise had cost New Books $425,000. 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 $12,500 to Readers' Comer. Readers' Corner also returned some books, which had cost New Books $2,500 and had been sold to Readers' Corner for $4,000. No further returns are expected. c. Just three days later, Readers' Corner paid New Books, which settled all amounts owed. Required: 1. Indicate the amount and direction of the effect (+ for increase, - for decrease, and No effect) of each transaction on the inventory balance of Readers' Corner. Transaction a 0 Effect on Inventory Balance
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