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 $7,5ee 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/6, FOB destination, invoice dated August S. The merchandise had cost $4,Bee 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 $68. The merchandise was restored to inventory. Aug. 12 After negotiations with waters Corporation concerning problems with the purchases on August 8, Lowe's Aceived a credit memorandum from Waters granting a price reduction of $400 off the 55, 4ee of goods purchased. Aug. 14 At Aron's request, Lowe's paid $2ee cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. Aug. 15 Received balance due from Baird Corp. for the August 5 sale less the return on August 18. Aug. 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Aug. 19 Sold merchandise to Tux Co. for $4,820 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 see credit memorandun toward the 54,800 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 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 debitor a credit. Total debits should always equal total credits. Income Statement tab - Prepare a multiple-step income statement. Impact on Income tab - Indicate the impact each transaction had on net income. Requiem General Journal > GLO4-02 - 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.sep under credit terms of 1/10, 1/30, FOB destination, invoice dated August Aug s Sold merchandise to Baird Corp. for $5,200 under credit terus of 2/10, 1/60, FOB destination, invoice dated August S. The merchandise had cost $4,000 Aug. 8 Purchased merchandise from waters Corporation for $5,000 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. 1e Baird returned merchandise from the August 5 sale that had cost Lowe's $400 and was sold for $689. The merchandise was restored to inventory. Aug. 12 After negotiations with waters Corporation concerning problems with the purchases on August 8, Lowe's Neceived a credit memorandum from waters granting a price reduction of $400 off the $5,480 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 from Baird Corp. for the August 5 sale less the return on August 18. Aug. 18 Paid the amount due waters Corporation for the August 8 purchase less the price allowance from August 12. Aug. 19 Sold merchandise to Tux Co. for $4,8ee under credit terms of n/10, FOS shipping point, invoice dated August 19. The merchandise had cost $2,4ee. Aug. 22 Tue requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowes sent Tux a $5ee credit memorandus toward the $4,800 invoice to resolve the issue. Aug 29 Received Tux's cash payment for the amount due from the August 13 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 Date: Jul 01 to! Aug 30 0 Lowe's Company Schedule of Accounts Receivable Accounts receivable - Aron Accounts receivable - Baird Accounts receivable-Tur Accounts receivable Waters 0 0 0 Total scoounts receivable 5 0
