Ch.4 General Ledger i Saved 1 Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts PayableAron.) 1 points eBook References Aug 1 Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Aug 5 Sold merchandise to Baird Corp. for $5,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000. Aug 8 Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. Aug. 9 Paid $125 cash for shipping charges related to the August 5 sale to Baird Corp. Aug. 10 Baird returned merchandise from the August 5 sale that had cost Lowe's $400 and was sold for $600. The merchandise was restored to inventory. Aug. 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a credit memorandum from Waters granting a price reduction of $400 off the $5,400 of goods purchased. Aug. 14 At Aron's request, Lowe's paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. Aug. 15 Received balance due from Baird Corp. for the August 5 sale less the return on August 10. Aug. 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Aug. 19 Sold merchandise to Tux Co. for $4,800 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400. Aug. 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's sent Tux a $500 credit memorandum toward the $4,800 invoice to resolve the issue. Aug. 29 Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. Aug. 30 Paid Aron Company the amount due from the August 1 purchase. 1 Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income 1 points Journalize the merchandising transactions. The General Ledger, trial balance, and schedules of accounts receivable and accounts payable will be updated based on your entries. View transaction list eBook References Journal entry worksheet Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Note: Enter debits before credits. Date Debit Credit Aug 01 Account Title Purchases discounts Accounts payable - Aron 8,000 8,000 Record entry Clear entry View general journal eBook Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income References Prepare a multiple-step income statement. Lowe's Company Income Statement For the Month Ended August 31, 2019 $ 0 $ 0 0 0 0 0 Operating expenses: Net income For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as negative values. Upon completion, compare the amount of income with the amount reported on the income statement. Impact on income Increase (decrease) to income Aug. 1) Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Aug. 5) Sold merchandise to Baird Corp. for $5,200 under credit terms of 2/10, 1/60, FOB destination, invoice dated August 5. Aug. 5) The merchandise sold to Baird had cost $4,000. Aug. 8) Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. Aug. 9) Paid $125 cash for shipping charges related to the August 5 sale to Baird Corp. Aug. 10) Baird returned merchandise from the August 5 sale that had sold for $600. Aug. 10) The cost of the merchandise returned by Lowe's was $400. The merchandise was restored to inventory. Aug. 12) After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a credit memorandum from Waters granting a price reduction of $400 off the $5,400 of goods purchased. Aug. 14) At Aron's request, Lowe's paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. Aug. 15) Received balance due from Baird Corp. for the August 5 sale less the return on August 10. Aug. 18) Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Aug. 19) Sold merchandise to Tux Co. for $4,800 under credit terms of n/10, FOB shipping point invoice dated August 19 Aug. 19) The cost of the merchandise sold merchandise to Tux was $2,400 Aug. 22) Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's sent Tux a $500 credit memorandum toward the $4,800 invoice to resolve the issue. Aug. 29) Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. Aug. 30) Paid Aron Company the amount due from the August 1 purchase Total income $ 0 Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Note: Enter debits before credits. Date Debit Credit Aug 01 Account Title Purchases discounts Accounts payable - Aron 8,000 8,000 Record entry Clear entry View general journal eBook Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income References Prepare a multiple-step income statement. Lowe's Company Income Statement For the Month Ended August 31, 2019 $ 0 $ 0 0 0 0 0 Operating expenses: Net income For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as negative values. Upon completion, compare the amount of income with the amount reported on the income statement. Impact on income Increase (decrease) to income Aug. 1) Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Aug. 5) Sold merchandise to Baird Corp. for $5,200 under credit terms of 2/10, 1/60, FOB destination, invoice dated August 5. Aug. 5) The merchandise sold to Baird had cost $4,000. Aug. 8) Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. Aug. 9) Paid $125 cash for shipping charges related to the August 5 sale to Baird Corp. Aug. 10) Baird returned merchandise from the August 5 sale that had sold for $600. Aug. 10) The cost of the merchandise returned by Lowe's was $400. The merchandise was restored to inventory. Aug. 12) After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a credit memorandum from Waters granting a price reduction of $400 off the $5,400 of goods purchased. Aug. 14) At Aron's request, Lowe's paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. Aug. 15) Received balance due from Baird Corp. for the August 5 sale less the return on August 10. Aug. 18) Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Aug. 19) Sold merchandise to Tux Co. for $4,800 under credit terms of n/10, FOB shipping point invoice dated August 19 Aug. 19) The cost of the merchandise sold merchandise to Tux was $2,400 Aug. 22) Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's sent Tux a $500 credit memorandum toward the $4,800 invoice to resolve the issue. Aug. 29) Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. Aug. 30) Paid Aron Company the amount due from the August 1 purchase Total income $ 0