GLO401 - Based on Problem 4-1A LO P1, P2 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-Clark.) Jul. 1 Purchased merchandise from Clark Company for $8,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. Jul. 2 Sold merchandise to Clinton Co. for $1,900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $1,140. Jul. 3 Paid $525 cash for freight charges on the purchase of July 1. Jul. 8 Sold merchandise that had cost $2,200 for $3,700 cash. Jul. 9 Purchased merchandise from Griffin Co. for $3,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. Jul. 11 Returned $600 of merchandise purchased on July 9 from Griffin Co. and debited its account payable for that amount. Jul. 12 Received the balance due from Clinton Co. for the invoice dated July 2, net of the discount. Jul. 16 Paid the balance due to Clark Company within the discount period. Jul. 19 Sold merchandise that cost $2,200 to Knight Co. for $3,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. Jul. 21 Gave a price reduction (allowance) of $600 to Knight Co. for merchandise sold on July 19 and credited Knight's accounts receivable for that amount. Jul. 24 Paid Griffin Co. the balance due, net of discount. Jul. 30 Received the balance due from Knight Co. for the invoice dated July 19, net of discount. Jul. 31 Sold merchandise that cost $5,400 to Clinton Co. for $9,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income General Journal tab - Journalize the merchandising transactions. The General Ledger, trial balance and schedules of accounts receivable and accounts payable will be updated based on your entries. General Ledger Tab - One of the advantages of general ledger software is that posting is done automatically. To see the detail of all transactions that affect a specific account, or the balance in an account at a specific point in time, click on the General Ledger tab. Trial Balance Tab - General ledger software also automates the preparation of trial balances. A trial balance lists each account from the General Ledger, along with its balance, either a debit or a credit. Total debits should always equal total credits. Income Statement tab - Prepare the income statement through the calculation of gross profit. Impact on Income tab - Indicate the impact each transaction had on net income. Requirement General Journal > No Date Account Title Debit Credit 1 Jul 01 8,000 Merchandise inventory Accounts payable - Clark 8,000 2 Jul 02 1,900 Accounts receivable - Clinton Sales 1,900 3 Jul 02 1,140 Cost of goods sold Merchandise inventory 1,140 4 Jul 03 3,200 Merchandise inventory Accounts receivable - Griffin 3,200 01 Jul 08 Delivery expense Cash 6 Jul 08 Sales returns and allowances Accounts receivable - Clinton 7 Jul 09 Merchandise inventory Cost of goods sold Cash Accounts receivable - Clinton Debit Credit No. Date Debit Credit No. Date Balance 25,500 Jul 01 Balance 0 1,900 2 Jul 02 1,900 Accounts receivable - Griffin Debit Credit Merchandise inventory Debit Credit No. Date No. Balance 0 (3,200) 1 4 Jul 03 3,200 1 Date Jul 01 Jul 01 Jul 02 Jul 03 8,000 Balance 8,000 16,000 14,860 18,060 1,140 | 3,200 Accounts payable - Clark Debit Credit Common stock Debit Credit No. Date No. Balance 0 8,000 Date Jun 30 Balance 33,500 Jul 01 8,000 Sales Cost of goods sold Debit Credit No. Date Debit Credit Balance No. Date Balance 0 0 2 Jul 02 1,900 1,900 3 Jul 02 1,140 1,140 Schedule of Requirement General Journal General Ledger Trial Balance 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 account balance to return to the General Ledger. The trial balance is only as accurate as the underlying journal entries. If the total debits do not equal the total credits, you have a journal entry that is out of balance. If you have an abnormal ending balance indicated with brackets in the general ledger), you should review the journal entries that affected that account to ensure that the journal entries are correct. Show less Lee's Company Trial Balance July 31, 2019 Account Title Credit Debit 25,500 1,900 3,200 18,060 Cash Accounts receivable - Clinton Accounts receivable - Griffin Merchandise inventory Accounts payable - Clark Common stock Sales Cost of goods sold Total 8,000 33,500 1,900 1,140 46,600 $ $ 46,600 Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income No input required Dates: Jul 01 to: Jul 31 EA Lee's Company Schedule of Accounts Receivable Accounts receivable - Knight Accounts receivable - Clark Accounts receivable - Clinton Accounts receivable - Griffin 0 0 9,000 (3,200) 0 5,800 Total accounts receivable $ Requirement General Journal General Ledger Trial Balance Schedule of Schedule of Receivables Payables Income Statement Impact on Income No input required Dates: Jul 01 to: Jul 31 $ Lee's Company Schedule of Accounts Payable Accounts payable - Knight Accounts payable - Clark Accounts payable - Clinton Accounts payable - Griffin 8,000 0 0 8,000 Total accounts payable CA Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income Prepare a multiple-step income statement through the calculation of gross profit. Lee's Company Partial Income Statement For the Month Ended July 31, 2019 $ 0 EA 0 0 0 0 $ 0 Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on 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 minus sign. Upon completion, compare the gross profit with the amount reported on the partial income statement. Impact on income Increase (decrease) to income July 1) Purchased merchandise from Clark Company for $8,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. July 2) Sold merchandise to Clinton Co. for $1,900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2 July 2) The cost of the merchandise sold to Clinton Co. was $1,140 July 3) Paid $525 cash for freight charges on the purchase of July 1. July 8) Sold merchandise for $3,700 cash. July 8) The cost of the merchandise sold was $2,200. July 9) Purchased merchandise from Griffin Co. for $3,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11) Received a $600 credit memorandum from Griffin Co. for the return of part of the merchandise purchased on July 9. July 11) Received a $600 credit memorandum from Griffin Co. for the return of part of the merchandise purchased on July 9. July 12) Received the balance due from Clinton Co. for the invoice dated July 2, net of the discount. July 16) Paid the balance due to Clark Company within the discount period. July 19) Sold merchandise to Knight Co. for $3,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19 July 19) The cost of the merchandise sold to Knight Co. was $2,200 July 21) Issued a $600 credit memorandum to Knight Co. for an allowance on goods sold on July 19. July 24) Paid Griffin Co. the balance due, net of discount. July 30) Received the balance due from Knight Co. for the invoice dated July 19, net of discount. July 31) Sold merchandise to Clinton Co. for $9,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. July 31) The cost of the merchandise sold to Clinton Co. was $5,400 Total gross profit A 0