K Prepare journal entries to record the following merchandising transactions of Lowe'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 August 1 in Accounts Payable-Aron. August 1 Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, n/30, F08 destination, invoice dated August 1. August 5 Sold merchandise to Baird Corporation for $3,500 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $2,000. August 8 Purchased merchandise from Waters Corporation for $4,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. August 9 Paid $120 cash for shipping charges related to the August 5 sale to Baird Corporation. August 10 Baird returned merchandise from the August 5 sale that had cost Lowe's $500 and was sold for $1,000. The merchandise was restored to inventory. August 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of $400 off the $4,000 of goods purchased. Lowe's debited accounts payable for $400. August 14 At Aron's request, Lowe's paid $290 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts) payable) to Aron. August 15 Received balance due from Baird Corporation for the August 5 sale less the return on August 10. August 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. August 19 Sold merchandise to Tux Company for $3,000 under credit terms of n/10, F08 shipping point, invoice dated August 19. The merchandise had cost $1,580. August 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's gave a price reduction (allowance) of $500 to Tux and credited Tux's accounts receivable for that amount. August 29 Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. August 30 Paid Aron Company the amount due from the August 1 purchase. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 ..... 16 Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Note: Enter debits before credits. Date August 01 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 2 3 4 5 6 7 8..... 16 Sold merchandise to Baird Corporation for $3,500 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. Note: Enter debits before credits. Date August 05- General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 ..... 16 Record cost of merchandise sold, $2,000. Note: Enter debits before credits. Date: August 05 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 ..... 16 Purchased merchandise from Waters Corporation for $4,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. Note: Enter debits before credits. Date August 08 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8. 16 Paid $120 cash for shipping charges related to the August 5 sale to Baird Corporation. Note: Enter debits before credits. Date August 09 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8..... 16 Baird returned merchandise from the August 5 sale that was sold for $1,000. Note: Enter debits before credits. Date August 10 General Journal Debit Credit View general journal Record entry Clear entry View transaction list Journal entry worksheet 1 2 3 4 5 6 ^ 8 ..... 16 Record the merchandise, cost $500, that was restored to inventory. Note: Enter debits before credits. Date August 10 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 16 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of $400 off the $4,000 of goods purchased. Lowe's debited accounts payable for $400. Note: Enter debits before credits. Date August 12 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 7 16 4 5 6 7 8 9 At Aron's request, Lowe's paid $290 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron. Note: Enter debits before credits. Date August 14 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet > 1 ..... 5 6 7 8 9 10 10 16 > **** Received balance due from Baird Corporation for the August 5 sale less the return on August 10. Note: Enter debits before credits. Date August 15 General Journal Debit Credit View general journal Record entry Clear entry View transaction list Journal entry worksheet 1 ... 6 7 8 9 10 11 16 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Note: Enter debits before credits. Date August 18 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet ..... 7 8 9 10 11 12 16 Sold merchandise to Tux Company for $3,000 under credit terms of n/10, FOB shipping point, invoice dated August 19. Note: Enter debits before credits. Date August 19 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 ... 8 9 10 11 12 13 16 Record cost of merchandise sold, $1,500. Note: Enter debits before credits. Date August 19: General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 9 10 11 12 13 14 16 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's gave a price reduction (allowance) of $500 to Tux, and credited Tux's accounts receivable for that amount. Note: Enter debits before credits. Date August 22 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 9 10 11 12 13 14 15 16 Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. Note: Enter debits before credits. Date August 29 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1. 9 10 11 12 13 14 Paid Aron Company the amount due from the August 1 purchase. Note: Enter debits before credits. Date August 30 15 16 General Journal Debit Credit Record entry Clear entry View general journal