PROBLEMS: SET C
Torentino 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, Torentino’s inventory con-
sisted of 240 books purchased at $1,200. During the month of June the following merchandising
Purchased 180 books on account for $5 each from Atkinson Publishers, FOB destina-
tion, 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 Atkinson Publishers.
Paid Atkinson 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 destina-
tion, 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.
Torentino Book Warehouse’s chart of accounts includes the following: No. 101 Cash, No. 112
Accounts Receivable, No. 120 Merchandise Inventory, No. 201 Accounts Payable, No. 401
Sales, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, No. 505 Cost of Goods
Journalize the transactions for the month of June for Torentino Book Warehouse using a perpet-
ual inventory system.
Tool Time Hardware Store completed the following merchandising transactions in the
month of May.At the beginning of May, the ledger of Tool Time showed Cash of $10,000 and Tim
Allen, Capital of $10,000.
Purchased merchandise on account from Otay Wholesale Supply $8,000, terms 2/10,
Sold merchandise on account $4,000, terms 1/10, n/30.The cost of the merchandise sold
Received credit from Otay Wholesale Supply for merchandise returned $600.
Received collections in full, less discounts, from customers billed on sales of $4,000 on
Paid Otay Wholesale Supply in full, less discount.
Purchased supplies for cash $900.
Purchased merchandise for cash $2,700.
Received refund for poor quality merchandise from supplier on cash purchase $230.
Purchased merchandise from Shadrack Distributors $2,500, FOB shipping point,
terms 2/10, n/30.