GLO401 (Algo) - Based on Problem 4-14 LO P1, P2

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Prepare journal entries to record the following merchandising transactions of Lee's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable--Clinton.)

July 1 Purchased merchandise from Clinton Company for $6,400 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.

July 2 Sold merchandise to Allen Company for $1,100 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $660.

July 3 Paid $205 cash for freight charges on the purchase of July 1.

July 8 Sold merchandise that had cost $1,300 for $2,100 cash

July 9 Purchased merchandise from Garcia Company for $2,400 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.

July 11 Returned $500 of merchandise purchased on July 9 from Garcia Company and debited its account payable for that amount.

July 12 Received the balance due from Allen Company for the invoice dated July 2, net of the discount.

July 16 Paid the balance due to Clinton Company within the discount period.

July 19 Sold merchandise that cost $1,100 to Taylor Company for $1,600 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.

July 21 Gave a price reduction (allowance) of $300 to Taylor Company for merchandise sold on July 19 and credited Taylor's accounts receivable for that amount.

July 24 Paid Garcia Company the balance due, net of discount.

July 30 Received the balance due from Taylor Company for the invoice dated July 19, net of discount.

July 31 Sold merchandise that cost $4,400 to Allen Company for $7,400 under credit terms of 2/10; n/60, FOB shipping point, invoice dated July 31.

Journalize the merchandising transactions. The General Ledger, trial balance, and schedules of accounts receivable and payable will be updated based on your entries. Journal entry worksheet Purchased merchandise from Clinton Company for $6,400 under credit terms of 1/15,n/30,FOB shipping point, invoice dated July 1 . Note: Enter debits before crudits: July 30 Received the balance due from Taylor Company for the invoice dated July 19, net of discount. July 31 Sold merchandise that cost $4,400 to Allon Company for $7,400 under credit terms of 210,n/60, FOB shipping point, invoice dated July 31 . No input required July 24 Paid Garcin Company the balance due, net of discount. July 30 Received the balance due from Taylor Company for the invoice dated July 19, net of discount. July 31 Sold merchandise that cost $4,400 to Allen Company for $7,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31 . No input required Prepare a multiple-step income statement through the calculation of gross profit. For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, Input decreases to net income as minus sign. Upon completion, compare the gross profit with the amount rep the partial income statement. July 16) Paid the balance due to Clinton Company within the discount period. July 19) Sold merchandise to Taylor Company for $1,600 under credit terms of 2/15,n/60,FOB shipping point, invoice dated July 19. July 19) The cost of the merchandise sold to Taylor Company was $1,100. July 21) Issued a $300 credit memorandum to Taylor Company for an allowance on goods sold on July 19. July 24) Paid Garcia Company the balance due, net of discount. July 30) Received the balance due from Taylor Company for the invoice dated July 19 , net of discount. July 31) Sold merchandise to Allen Company for $7,400 under credit terms of 2/10,n/60, FOB shipping point, invoice dated July 31. July 31) The cost of the merchandise sold to Allen Company was $4,400. Total gross profit Income Statement impact on ineome