Data for Phantom Book Warehouse are presented in P5.4B.

Instructions
Record the June transactions for Phantom Book Warehouse, assuming a periodic inventory system is used instead of a perpetual inventory system.

Taking It Further

What are the costs and benefits for Phantom Book Warehouse of using a perpetual, as opposed to a periodic, inventory system?

Data from P5.4B

Phantom Book Warehouse distributes hardcover books to retail stores and extends credit terms of n/30 to all of its customers. Phantom uses a perpetual inventory system and the earnings approach. At the end of May, Phantom had an inventory of 230 books purchased at $7 each. During the month of June, the following merchandise transactions occurred:
June 1 Purchased 170 books on account for $7 each from Reader’s World Publishers, terms n/30,
FOB destination.

2 The correct company paid $85 freight on the June 1 purchase.

3 Sold 190 books on account to Book Nook for $12 each.

6 Received $70 credit for 10 books returned to Reader’s World Publishers.

18 Issued a $48 credit to Book Nook for the return of four damaged books. The books were
determined to be no longer saleable and were destroyed.

20 Purchased 140 books on account for $6.50 each from Reader’s World Publishers, terms
n/30, FOB shipping point.

21 The correct company paid $70 freight for the July 20 purchase.

June 27 Sold 100 books on account to Readers Bookstore for $12 each.

28 Granted Readers Bookstore a $180 credit for 15 returned books. These books were restored to inventory. 30 Paid Reader’s World Publishers for the June 1 purchase. 30 Received the balance owing from Book Nook.