+ GL0402 (Algo) - Based on Problem 4-2A LO P1, P2 Prepare journal entries to record the following merchandising transactions of Martin'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 Payable-Ryan.) August 1 Purchased merchandise from Ryan Company for $9,700 under credit terms of 1/10, n/30, Fon destination, invoice dated August 1. August 5 Sold merchandise to Lane Corporation for $6,300 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,800. August Purchased merchandise from Gonzalez Corporation for $5,840 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. August 9 Paid $725 cash for shipping charges related to the August 5 sale to Lane Corporation August 10 Lane returned merchandise from the August 5 sale that had cost Martin's $200 and was sold for $400. The merchandise was restored to inventory. August 12 After negotiations with Gonzalez Corporation concerning problems with the purchases on August 8, Martin's received a credit memorandum from Gonzalez granting a price reduction of $800 off the $5,840 of goods purchased. August 14 At Ryan's request, Martin's paid $300 cash for freight charges on the August 1 purchase, reducing the amount oved to Ryan. August 15 Received balance due from Lane Corporation for the August 5 sale less the return on August 10. August 18 Paid the amount due Gonzalez Corporation for the August 8 purchase less the price allowance from August 12. August 19 Sold merchandise to King Company for $4,000 under credit terms of n/10, ron shipping point, invoice dated August 19. The merchandise had cost $2,000. August 22 King requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Martin's sent King a $400 credit memorandum toward the $4,000 invoice to resolve the issue. August 29 Received King's cash payment for the amount due from the August 19 sale less the price allowance from August 22. August 30 Paid Ryan Company the amount due from the August 1 purchase. View transaction list View journal entry worksheet Account Title Debit Credit 9,700 9F No Date: 1 August 01 Merchandise inventory Accounts payable - Ryan 2 August 05 Accounts receivable - Lane Sales 9,700 6,300 6,300 3 August 05 Cost of goods sold Merchandise inventory 3,800 3,800 4 August 08 Merchandise inventory 5,840 Accounts payable - Gonzalez 5,840 5 August 09 Delivery expense Cash 725 725 6 August 10 Sales returns and allowances 400 Accounts receivable - Lane 400 7 August 10 Merchandise inventory Cost of goods sold 200 200 8 August 12 Accounts payable-Gonzalez 800 Merchandise inventory 800 Prepare a multiple-step income statement. eBook Martin's Company Income Statement For the Month Ended August 31, 2021 Print Rent expense Merchandise inventory eferences Sales returns and allowances Total current assets. Dividends Total current liabilities. Operating expenses: Net income $ 69 0 23,140 + 800 (23,940) (23,940) 0 es Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact c Income For each transaction, indicate the impact each item had on income and the dollar amount of the change in inco Input decreases to net income as negative values. Upon completion, compare the amount of income with reported on the income statement. Impact on income Increase (decrease) to income No impact on income August 1) Purchased merchandise from Ryan Company for $9,700 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. August 5) Sold merchandise to Lane Corporation for $6,300 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. August 5) The merchandise sold to Lane had cost $3,800. August 8) Purchased merchandise from Gonzalez Increases net income Decreases net income Corporation for $5,840 under credit terms of 1/10, n/45, FOB No impact on income shipping point, invoice dated August 8. August 9) Paid $725 cash for shipping charges related to the August 5 sale to Lane Corporation Decreases net income August 10) Lane returned merchandise from the August 5 sale that had sold for $400. Decreases net income Increases net income August 10) The cost of the merchandise returned by Martin's was $200. The merchandise was restored to inventory. August 12) After negotiations with Gonzalez Corporation concerning problems with the purchases on August 8, Martin's received a credit memorandum from Gonzalez granting a price reduction of $800 off the $5,840 of goods purchased. August 14) At Ryan's request, Martin's paid $300 cash for freight charges on the August 1 purchase, reducing the amount owed to Ryan. August 15) Received balance due from Lane Corporation for I No impact on income No impact on income < Prev 3 of 10 Next >