GL04-02 - Based on Problem 4-2A Lowe's Company LO P1, P2 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 Payable-Aron.) Aug. 1 Purchased merchandise from Aron Company for $7,500 under credit terns of 1/10, 1/30, 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 fron 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 fron 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 fron August 12. Aug. 19 Sold merchandise to Tux Co. for $4,800 under credit terns 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 $4,860 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. Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income The trial balance is a listing of all account balances from the General Ledger as of a specific date. Click on any individual Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income Dates: Jul 01 to: Aug 30 Lowe's Company Schedule of Accounts Receivable Accounts receivable - Aron Accounts receivable - Baird Accounts receivable - Tux Accounts receivable - Waters $ 0 0 0 0 0 0 Total accounts receivable $ Trial Balance Schedule of Payables > Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income Prepare a multiple-step income statement. Lowe's Company Income Statement For the Month Ended August 31, 2017 $ 0 $ 0 0 0 0 0 Operating expenses Net income General Requirement General Schedule of Schedule of Trial Balance Income Journal Impact on Ledger Receivables Payables Statement 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 amour 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,n/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, 1/45, 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
