Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system. (Hint: twill help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable-Aron.) Auguat 1 Putchased merchandise from Aron Company for $7,500 under eredit terma of 1/10, n/30, Fon destinatiod, invotce dated August 1 . Auguat 5 sold morchandise to Baird corporation for 55,200 under credit terms of 2/10, n/60, ros destination, involet dated Nugust 5. The merchandise had cost $4,000, Auguse 8 purchased narchandlse from Waters Corporation for $5,400 under oredit terms of 1/10, a/45, Fos ah1pping point, involce dated Aagunt 8 . Mugust 9 Faid $125 cash for shipping charges related to the August 5 nale to Baird Corporation. hugust 10 Baird returned perchandise fron the Auguit 5 inale that hod eost Love's $400 and was mold for $600. The forehandite vati restored to inventory. hugust 12 After negotiations whth Watern Corporation concerning problem with the purehases on Auquat B, Jowe's atseived a erodit memorandum from Watore granting a price reduetion of $400 off the $5,400 of goods purehased. Nuqust 14At Aron's request, Lowe's pafd 5200 caoh for freight eharges on the August 1 purchase, reducing the amount oved to Aron. hugust 15 Recelved balance due from Daird Corporation for the hugust 5 wale less the return on August 10 . Qugust 18 Paid the amount due Waters corporation for the Nugust g purchase leas the price allovance from Auguat 12. hagust 19 sold nerehanditie to Tux Colpany for $4,800 under eredit teran of n/10, rod shipping point, invoice dated Nugust 19. the merehandiee bad eont $2,400. haqust 22 Tux requested a price reduction on the August 29 aale because the nerchandioe did not meet apeoifications. rowe'b sent Tux a 5500 credit Benorandum coward the $4,800 involce to resolve the issue. Wagum 29 Regedved Fux's eash paynent for the amount due from the August 19 alde lean the price allowance from Auguat 22. hugust jo Paid Aron Company the amount doe from the Aagust 1 purchane. For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as negative values. Upon completion, compare the amount of income with the amount reported on the income statement. Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system. (Hint: twill help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable-Aron.) Auguat 1 Putchased merchandise from Aron Company for $7,500 under eredit terma of 1/10, n/30, Fon destinatiod, invotce dated August 1 . Auguat 5 sold morchandise to Baird corporation for 55,200 under credit terms of 2/10, n/60, ros destination, involet dated Nugust 5. The merchandise had cost $4,000, Auguse 8 purchased narchandlse from Waters Corporation for $5,400 under oredit terms of 1/10, a/45, Fos ah1pping point, involce dated Aagunt 8 . Mugust 9 Faid $125 cash for shipping charges related to the August 5 nale to Baird Corporation. hugust 10 Baird returned perchandise fron the Auguit 5 inale that hod eost Love's $400 and was mold for $600. The forehandite vati restored to inventory. hugust 12 After negotiations whth Watern Corporation concerning problem with the purehases on Auquat B, Jowe's atseived a erodit memorandum from Watore granting a price reduetion of $400 off the $5,400 of goods purehased. Nuqust 14At Aron's request, Lowe's pafd 5200 caoh for freight eharges on the August 1 purchase, reducing the amount oved to Aron. hugust 15 Recelved balance due from Daird Corporation for the hugust 5 wale less the return on August 10 . Qugust 18 Paid the amount due Waters corporation for the Nugust g purchase leas the price allovance from Auguat 12. hagust 19 sold nerehanditie to Tux Colpany for $4,800 under eredit teran of n/10, rod shipping point, invoice dated Nugust 19. the merehandiee bad eont $2,400. haqust 22 Tux requested a price reduction on the August 29 aale because the nerchandioe did not meet apeoifications. rowe'b sent Tux a 5500 credit Benorandum coward the $4,800 involce to resolve the issue. Wagum 29 Regedved Fux's eash paynent for the amount due from the August 19 alde lean the price allowance from Auguat 22. hugust jo Paid Aron Company the amount doe from the Aagust 1 purchane. For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as negative values. Upon completion, compare the amount of income with the amount reported on the income statement
