Gagliardo 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, Gagliardo s inventory consisted of 240 books purchased at $1.200. During the month of June the following merchandising transactions occurred. June 1 Purchased 180 books on account for $5 each from Garrison Publishers. FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. Sold 120 books on account to Books-R-Us for $ 10 each. Received $50 credit for 10 books returned to Garrison Publishers. Paid Garrison Publishers in full, less discount. Received payment in full from Books-R-Us. Sold 150 books on account to Binder Books for $10 each. Purchased 120 books on account for $5 each from Reading Publishers, FOB destination, terms 2/15. n/30. The appropriate party also made a cash payment of $50 for the freight on this date. Received payment in full from Binder Books. Paid Reading Publishers in full, less discount. Sold 110 books on account to Read-n-Weep Bookstore for $ 10 each. Granted Read-n-Weep Bookstore $ 150 credit for 15 books returned costing $75. Gagliardo Book Warehouses chart of accounts includes the following: So. 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, No. 505 Cost of Goods Sold