Data for Phantom Book Warehouse are presented in P5-4B.
In P 5-4 B
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.
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.
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?