5-4A. Journal Entries for Merchandise Transactions on Seller's and Buyer's BooksPerpetual System The following are selected transactions for Kim, Inc., during the month of June: June 21 Sold and shipped on account to Lowery Company, $4,000 ($2,000 cost) of merchandise, with terms of 2/10, n/30. 28 Lowery Company returned defective merchandise billed at $400 on June 21 ($200 cost). 30 Received from Lowery Company a check for full settlement of the June 21 transaction. Required Prepare the necessary journal entries for (a) Kim, Inc., and (b) Lowery Company. Both companies use the perpetual inventory system. E5-6A. Profitability Analysis Erin Enterprises reports the following information on its year-end income statement: Net sales. Cost of goods sold .............. $200,000 110,000 Operating expenses.. Other income .................... $40,000 25,000 Required Calculate Erin's gross profit percentage and return on sales ratio. 2,3 P5-4A. Journal Entries for Merchandise Transactions-Perpetual System Cushing Distributing Com. pany uses the perpetual inventory system. Cushing had the following transactions related to merchan. dise during the month of June: June 1Purchased on account merchandise for resale for $10,000; terms were 2/10, n/30. 3 Paid $550 cash for freight on the June 1 purchase. 7 Returned merchandise costing $600 (part of the $10,000 purchase). 10 Paid for merchandise purchased on June 1. 13 Sold merchandise on account costing $8,000 for $10,000; terms were 2/10, n/30. June 16 Customer returned merchandise costing $750 that had been sold on account for $1,000 (part of the $10,000 sale). 22 Received payment from customer for merchandise sold on June 13. Required Prepare journal entries for each of the transactions for the Cushing Distributing Company