Prepare journal entries to record the following merchandising transactions of Lowes, 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 PayableAron.)

Aug.		1		Purchased merchandise from Aron Company for $4,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.
		5		Sold merchandise to Baird Corp. for $2,800 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $2,000.
		8		Purchased merchandise from Waters Corporation for $3,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8.
		9		Paid $210 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 Lowes $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, Lowes received a credit memorandum from Waters granting a price reduction of $300 off the $3,000 of goods purchased.
		14		At Arons request, Lowes paid $240 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 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 $2,400 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $1,200.
		22		Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowes sent Tux a $400 credit memorandum toward the $2,400 invoice to resolve the issue.
		29		Received Tuxs cash payment 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.

Journal entry worksheet

Transaction Index :

.....

Purchased merchandise from Aron Company for $4,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.

Sold merchandise to Baird Corp. for $2,800 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5.

Record cost of merchandise sold, $2,000.

Purchased merchandise from Waters Corporation for $3,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8.

Paid $210 cash for shipping charges related to the August 5 sale to Baird Corp.

Baird returned merchandise from the August 5 sale that was sold for $1,000.

Record the merchandise, cost $500, that was restored to inventory.

After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowes received a credit memorandum from Waters granting a price reduction of $300 off the $3,000 of goods purchased.

At Arons request, Lowes paid $240 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron.

Received balance due from Baird Corp. for the August 5 sale less the return on August 10.

Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12.

Sold merchandise to Tux Co. for $2,400 under credit terms of n/10, FOB shipping point, invoice dated August 19.

Record cost of merchandise sold, $1,200.

Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowes sent Tux a $400 credit memorandum toward the $2,400 invoice to resolve the issue.

Received Tuxs cash payment for the amount due from the August 19 sale less the price allowance from August 22.

Paid Aron Company the amount due from the August 1 purchase.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 01

Sold merchandise to Baird Corp. for $2,800 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5.

Date

General Journal

Debit

Credit

Aug 05

Record cost of merchandise sold, $2,000.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 05

Purchased merchandise from Waters Corporation for $3,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 08

+Paid $210 cash for shipping charges related to the August 5 sale to Baird Corp.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 09

+

Baird returned merchandise from the August 5 sale that was sold for $1,000.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 10

+

Record the merchandise, cost $500, that was restored to inventory.

Note: Enter debits before credits.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 10

+

After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowes received a credit memorandum from Waters granting a price reduction of $300 off the $3,000 of goods purchased.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 12

At Arons request, Lowes paid $240 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 14

+

Received balance due from Baird Corp. for the August 5 sale less the return on August 10.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 15

+

Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 18

+

Sold merchandise to Tux Co. for $2,400 under credit terms of n/10, FOB shipping point, invoice dated August 19.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 19

+

Record cost of merchandise sold, $1,200.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 19

+

Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowes sent Tux a $400 credit memorandum toward the $2,400 invoice to resolve the issue.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 22

+

Received Tuxs cash payment for the amount due from the August 19 sale less the price allowance from August 22.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 29

+

Paid Aron Company the amount due from the August 1 purchase.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Aug 30

+