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Problem 4-2A Preparing journal entries for merchandising activities-perpetual system LO P1, P2 Prepare journal entries to record the following merchandising transactions of Lowe's, which uses

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Problem 4-2A Preparing journal entries for merchandising activities-perpetual system LO P1, P2 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) ug Purchased merchandise froa Aron Company for $7, 500 under credit terms of 1/10. n/30, FOB destination. invoice dated August 1. 5 Sold merchandise to Baird Corp. for $5, 200 under eredit teras of 2/10, n/60, FOB destination, invoice dated August 5. The aerchandi se had cost $4. 000. 8 Purchased merchandise from Waters Corporation for $5,400 under credit terns of 1/10, n/45, FOB shipping point, invoice dated Augast 8 9 Paid $125 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 $400 and vas sold for $600. The merchandise was restored to inventory 12 After negotiations with Waters Corporation concerning problens with the purchases on August 8. Lowe' s received a credit menorandun fron Waters granting a price reduction of $400 off the $5, 400 of goods purchased 14 At Aron' s request, Lowe s paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron 15 Received balance due frem Baird Corp. for the August 5 sale less the return on August 10 18 Paid the anount due Katers Corporation for the August 8 purchase less the price allovance from August 12 19 Sold merchandise to Tux Co. for $4. 800 under credit teras of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2, 400. 22 Tux requested a price reduction on the August 19 sale because the perchandise did not meet specifications le, i test tur a SS00 credit memorandun toward the $4, 800 invoice to resolve the issue. 29 Received Tux' s cash payment for the amount due from the August 19 sale less the price allowance from August 22 30 Paid Aron Company the anount due from the August 1 parchase. Answer is complete but not entirely correct. No Date General Journal Debit Credit Aug 01 7,500 Accounts payable-Aron 7,500 2 Aug 05 Accounts receivable-Baird 5,200 Sales 5.200 Aug 05 Cost of goods sold 4,000 Merchandise inventory 4,000 Aug 08 Merchandise inventory 5,400 Accounts payable-Waters 5.400

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