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 retall merchandiser. Assume all sales of merchandise from New Books to Readers Corner are made with terms 1/30, 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 Comer at a selling price of $590.000 The merchandise had cost New Books $431.000 b. Two days later, Readers' Corner complained to New Books that some of the merchandise differed from what Readers Comer had ordered. New Books agreed to give an allowance of $14,000 to Readers' Corner Readers Corner also returned some books, which had cost New Books $2,800 and had been sold to Readers Comer for $4.300. c. Just three days later, Readers' Comer paid New Books, which settled all amounts owed Required: 1. For each of the events (a through 19. Indicate the amount and direction of the effect on New Books in terms of the following items (Enter any decreases to account balances with a minus sign) Net Sales Gross Profit Cost of Goods Sold Sales Returns Sales Allowances Sales Revenues Transaction b C The transactions listed below are typical of those involving New Books Incorporated and Readers' Corner. New Books is 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 $590,000. The merchandise had cost New Books $431.000 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 $14,000 to Readers' Corner. Readers' Corner also returned some books, which had cost New Books $2,800 and had been sold to Readers' Corner for $4,300. c. Just three days later, Readers Corner paid New Books, which settled all amounts owed. 2. Prepare the journal entries New Books would record. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction and X 1 n/30 Record the sales on account of $590,000 to Readers' Corner on terms n/30. 2. Record the cost of goods sold of 5431.000. Record the returns and allowances granted to Reader's Corner Record the cost of goods sold adjustment to inventory Credit Record the receipt of payment in full from Renders Corner
