PS-1A Kern's Book Warehouse distributes hardcover books to retail stores and extends Journalize purchase and credit terms of 2/10, n/30 to all of its customers. At the end of May, Kern's inventory con- sales transactions underoa sisted of books purchased for $1,800. During June, the following merchandising transac- perpetual inventory system. tions occurred. June 1 Purchased books on account for $1,600 from Binsfeld Publishers, FOB (LO 2, 3) destination, terms 2/10, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. Sold books on account to Reading Rainbow for $2,500. The cost of the books sold was $1,440 XLS 10, 3 6 Received $100 credit for books returned to Binsfeld Publishers. Paid Binsfeld Publishers in full, less discount. Received payment in full from Reading Rainbow. Sold books on account to Rapp Books for $1,800. The cost of the books sold was $1,080. Purchased books on account for $1,800 from McGinn Publishers, FOB destination, terms 2/15, n/30. The appropriate party also made a cash payment of $60 for the freight on this date. Received payment in full from Rapp Books. Paid McGinn Publishers in full, less discount Sold books on account to Baeten Bookstore for $1,600. The cost of the books sold was $970. Granted Baeten Bookstore $120 credit for books returned costing $72. 9 15 17 y. 20 24 26 28 30 Kern's Book Warehouse's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 401 Sales Reve- nue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold