Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
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 $7,500 under credit terus of 1/10, n/30, Fos destination, invoice dated August Aug. Sold merchandise to Baird Corp. for $5,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000 Aug. 8 Purchased merchandise from Matert Corporation for $5,400 under credit terns 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 Bird Corp. Aug. 20 Baird returned merchandise from the August 3 sole that had cost Lowe's $400 and was sold for $600. The marchandise was restored to inventory Aug 12 After negotiations with waters Corporation concerning problems with the purchases on August 8, Lowe's received a credit memorandum from waters granting price reduction of 5400 off the $5,400 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 tale less the return on August 10 Aug, 18 Paid the amount due waters Corporation for the August I purchase less the price allowance from August 12. Aug 19 Sold merchandise to Tux Co. for $4,000 under credit terms of W/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400 Aug 12 Tur requested price reduction on the August 19 sale becaul the merchandise did not meet specifications. Lowe's sent Tux see creditorandum toward the $4,800 invoice to resolve the issue. Aug 23 Receivet 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 mount due from the pust purchase

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Ethics

Authors: Iris Stuart

1st Edition

1118542401, 9781118542408

More Books

Students also viewed these Accounting questions