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.) Aug. 1 Purchand merchandise from Aron Company for $5,000 under credit torms of 1/10, 1/30, Pon destination, invoice dated August 1. 5 sold merchandise to Baird Corp. for 53,500 under credit terms of 2/10, 1/60. FOB destination, invoice dated August 5. The merchandise had cost $2.000 Purchased merchandise from Waters Corporation for 54,000 under credit terms of 1/10, 1/45, FOB shipping point. invoice dated August 3 9 Paid $190 cash for shipping charges related to the August 5 sale to Baird Corp. 10 Baird toturned merchandise from the August 5 sale that had cont Lowe's $500 and was sold for $1,000. The merchandise wat restored to inventory. 12 After negotiations with Wators Corporation concerning problems with the purchases on August 8, Lowe's received a credit nomorandum from waters granting a price reduction of $400 off the 54,000 of goods purchased. 14 at Aron's request, Lowe's paid $420 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron 15 Received balance due from Baird Corp. for the August 5 sale lose the return on August 10 16 paid the amount duo Water Corporation for the Augusto purchase loss the price allowance from August 12. 19 Bold merchandise to Tax co. for $3,000 under credit tons of n/10, FOB shipping point, invoice dated August 19 The merchandise had cost $1,500 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's sont Tux a $500 credit senandun toward the $3,000 invoice to resolve the issue 29 Received Tux's cash payment for the amount due from the August 19 sale lose the price allowance from August 22 30 Paid Aron Company the amount din from the August 1 purchase. Journal entry worksheet 1 2 3 5 6 8 CO 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. Credit Date Aug 01 General Journal Merchandise inventory Accounts payable --Aron Debit 5,000 5,000 Journal entry worksheet 1 2 3 4 5 6 7 8 16 > Sold merchandise to Baird Corp. for $3,500 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. Note: Enter debits before credits. Credit Date Aug 05 General Journal [Accounts receivable-Baird Sales Debit 3,500 3,500 Record entry Clear entry View general Journal View transaction list Journal entry worksheet 7 2 3 5 6 7 8 16 ..... Record cost of merchandise sold, $2,000. Note: Enter debits before credits. Credit Date General Journal Aug 05 Cost of goods sold Merchandise inventory Debit 2,000 2,000 Record entry Clear entry View general journal Journal entry worksheet .... Purchased merchandise from Waters Corporation for $4,000 under credit terms of 1/10, 1/45, FOB shipping point, invoice dated August 8. Note: Enter debits before credits. Debit Credit Date Aug 08 General Journal Merchandise inventory Accounts payable-Waters 4,000 4,000 Record entry Clear entry View general Journal Journal entry worksheet Paid $190 cash for shipping charges related to the August 5 sale to Baird Corp. Note: Enter debits before credits. Credit Date Aug 09 General Journal Delivery expense Cash Debit 190 190 Record entry Clear entry View general journal Journal entry worksheet ..... Baird returned merchandise from the August 5 sale that was sold for $1,000. Note: Enter debits before credits. Date Debit Credit Aug 10 General Journal Sales returns and allowances Accounts receivable-Baird 1,000 1,000 Record entry Clear entry View general journal Journal entry worksheet ... Record the merchandise, cost $500, that was restored to inventory. Note: Enter debits before credits. Date Debit Credit Aug 10 General Journal Merchandise inventory Cost of goods sold 500 500 Record entry Clear entry View general journal Journal entry worksheet 7 to 8 G 16 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 $4,000 of goods purchased. Note: Enter debits before credits. Date General Journal Credit Debit 400 Aug 12 Accounts payable-Waters Merchandise inventory 400 Record entry Clear entry general journal Journal entry worksheet ..... 6 un 7 7 8 GD 9 9 16 .. At Aron's request, Lowe's paid $420 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. Note: Enter debits before credits. Credit Date Aug 14 General Journal Accounts payable-Aron Cash Debit 420 420 Record entry Clear entry View general journal Received balance due from Baird Corp. for the August 5 sale less the return on August 10. Note: Enter debits before credits. Date Debit Credit Aug 15 General Journal Cash Sales discounts Accounts receivable-Baird 2,450 50 2,500 Record entry Clear entry View general journal 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. es Note: Enter debits before credits. Credit Date Aug 18 General Journal Accounts payable-Waters Debit 3,465 Record entry Clear entry View general journal Journal entry worksheet 16
