Prepare journal entries to record the following merchandising transactions of Sheng Company, which applies the perpetual inventory system. {Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Arotek.)

Aug. 1 Purchased merchandise from Arotek Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.

4 At Arotek’s request, Sheng paid $200 cash for freight charges on the August 1 purchase, reduc¬ ing the amount owed to Abilene.

5 Sold merchandise to Laird Coip. for $5,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000.

8 Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1 /10, n/45, FOB shipping point, invoice dated August 8. The invoice showed that at Sheng’s request. Waters paid the $140 shipping charges and added that amount to the bill. {Hint: Discounts are not applied to freight and shipping charges.)

9 Paid $125 cash for shipping charges related to the August 5 sale to Laird Corp.

10Laird returned merchandise from the August 5 sale that had cost Sheng $400 and been sold for $600. The merchandise wa^ restored to inventory.

12 After negotiations with Wafers Corporation concerning problems with the merchandise pur¬ chased on August 8, Sheng received a credit memorandum from Waters granting a price reduction of $700.

15 Received balance due from Laird Corp. for the August 5 sale less the return on August 10.
18 Paid the amount due Waters Corporation for the August 8 purchase less the price reduction granted.
19 Sold merchandise to Tux Co. for $4,800 under credit terms of 1/10, n/30, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400.
22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Sheng sent Tux a $500 credit memorandum to resolve the issue.
29 Received Tux’s cash payment for the amount due from the August 19 sale.
30 Paid Arotek Company the amount due from the August 1 purchase.