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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
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 Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, 1/30, FOB destination, invoice 5 Sold merchandise to Baird Corp. for $3,50e under credit terms of 2/10, 1/60, FOB destination, invoice dated August 5. The merchandise had cost $2,000. 8 Purchased merchandise from Waters Corporation for $4,600 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. 9 Paid $190 cash for shipping charges related to the August 5 sale to Baird Corp. 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. 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 $4,080 of goods purchased. Lowe's debited accounts payable for $400. 14 At Aron's request, Lowe's paid $500 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron. 15 Received balance due from Baird Corp. for the August 5 sale less the return on August 10. 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. 19 Sold merchandise to Tux Co. for $3,000 under credit terms of n/10, FOB shipping point, voice 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 gave a price reduction (allowance) of $500 to Tux, and credited Tux's accounts receivable for that 29 Received Tux's cash paynent for the amount due from the August 19 sale less the price allowance from August 22. 30 Paid Aron Company the amount due from the August 1 purchase. View transaction list Journal entry worksheet 1 5 6 7 8 16 Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, 1/30, FOB destination, invoice dated August 1
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