College Accounting: Chapter 11 Mastery Problem - Books and More (Michelle French)

College Accounting
Chapter 11 Accounting for Purchases and Cash Payments
Mastery Problem
Michelle French owns and operates Books and More, a retail book store. Selected account balances on June 1 are as follows: General Ledger Cash $32,200.00 Accounts Payable 2,000.00 M. French, Drawing 18,000.00 Purchases 67,021.66 Purchase Returns and Allowances 2,315.23 Purchase Discounts 905.00 Freight-In 522.60 Rent Expense 3,125.00 Utilities Expense 1,522.87 Accounts Payable Ledger Northeastern Publishing Co. $2,000.00 The following purchases and cash payments transactions took place during the month of June: June 1. Purchased books on account from Irving Publishing Company, $2,100. Invoice No. 101, terms 2/10, n/30, FOB destination.
June 2. Issued check no. 300 to Northeastern Publishing Co., for goods purchased on May 23, terms 2/10, n/30, $1,960 (the $2,000 invoice amount less the 2% discount).
June 3. Purchased books on account from Broadway Publishing, Inc., $2,880. Invoice no. 711, subject to 20% trade discount, and invoice terms of 3/10, n/30, FOB shipping point.
June 3. Issued check no. 301 to Mayday Shipping for delivery from Broadway Publishing Inc., $250.
June 4. Issued check no. 302 for June rent, $625.

1. Enter the transactions in a general journal (start with Page 16).
2. Post from the journal to the general ledger accounts and the accounts payable ledger. Use account numbers as indicated in the chapter.
3. Prepare a schedule of accounts payable.
4. If merchandise inventory was $35, 523 on January 1 and $42,100 as of June 30, prepare the cost of goods sold section of the income statement for the six months ended June 30, 20--.
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