Littleton Books has the following transactions during May. May 2 Purchases books on account from Readers Wholesale for $3,300, terms 1/10, n/30. May3 Pays cash for freight costs of $200 on books purchased from Readers. May5 Returns books with a cost of $400 to Readers because part of the order is incorrect. May 10 Pays the full amount due to Readers. May 30 Sells all books purchased on May 2 (less those returned on May 5) for $4,000 on account. Questions: Record the transactions of Littleton Books, assuming the company uses a perpetual inventory system. Assume that payment to Readers is made on May 24 instead of May 10. Record this payment.
Littleton Books has the following transactions during May. May 2 Purchases books on account from Readers Wholesale for $3,300, terms 1/10, n/30. May3 Pays cash for freight costs of $200 on books purchased from Readers. May5 Returns books with a cost of $400 to Readers because part of the order is incorrect. May 10 Pays the full amount due to Readers. May 30 Sells all books purchased on May 2 (less those returned on May 5) for $4,000 on account. Questions: Record the transactions of Littleton Books, assuming the company uses a perpetual inventory system. Assume that payment to Readers is made on May 24 instead of May 10. Record this payment.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 3EA: Consider the following transaction: On March 6, Fun Cards sells 540 card decks with a sales price of...
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Question
Littleton Books has the following transactions during May.
| May 2 | Purchases books on account from Readers Wholesale for $3,300, terms 1/10, n/30. |
| May3 | Pays cash for freight costs of $200 on books purchased from Readers. |
| May5 | Returns books with a cost of $400 to Readers because part of the order is incorrect. |
| May 10 | Pays the full amount due to Readers. |
| May 30 | Sells all books purchased on May 2 (less those returned on May 5) for $4,000 on account. |
Questions:
-
Record the transactions of Littleton Books, assuming the company uses a perpetual inventory system.
-
Assume that payment to Readers is made on May 24 instead of May 10. Record this payment.
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