q.5

Requlred information [The following information applles to the questions displayed below] The vansactions ilsted below are typical of those involving New Books incorporated and Readers" Corner. New Books is a wholesale merchandiser and Reader' 'Comer is a retall merchandiser. Assume all sales of merchandise from New Books to Readers Corner are made with terms n/30, and the two companles use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed durting the year ended August 31 . a. New Books soid merchandise to Readers' Comer at a seling price of $595.000. The merchandise had cost New Books $433,000 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 $14,500 to Readers' Corner. Readers' Corner aiso returned some books, Which had cost New Books $2.900 and had been sold to Readers' Corner for $4,400. No further retums are expected. c. Just three days later, Readers' Corner paid New Books, which sertied all amounts owed. 2. Prepare the Journal entries that Readers' Corner would record. (if no entry is requlred for a transaction/event, select "No Journal Entry Required" In the first account fleld.)