Problem 4-2A Preparing journal entries for merchandising activities-perpetual system LO P1, P2 Prepare joumal 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 eerchandise fron Aron company for 39,000 under credit teriss of 1/10, n/30, fos destination, invoice dated August 1. 5 Sold merchandise to 6 ind corp. for $6,300 under credit terns of 2/10,/60, foe destination, involce dated August 5 . The nerchandise had cost $4,000. 8 Purchased merchandise from iaters Corporation for 55,000 under credit terms of 1/10,n/45, Fob shipping point, Invoice dated August 6 . 9. Pald $240 cash for shipeing charges related to the August 5 sole to ealrd Corp. 10. Baird returned serchandise froe the August s sale that had cost Love's $500 and was sold for $1, e0e. The aerchasdise nas restored to inventory. 12 . After negotiations with Waters Corperation concerning probleas with the purchases on August b, Love's received a price. reduction from Waters of s8e0 off the 55 , eas of goods purchased. Lore's debited accounts peyoble for soev. 14 at Aron's request, Lowe's pald $360cosh for freight charges on the August 1 purchase, reduring the anount oured (accounts payable) to Aron. 15 Recelved balance due from Baird Corp. for the Augut 5 sale less the return on August 10. 11 Foid the anount due Waters Corporation for the August \& purchase less the pelce allewance from August 12. 19 sold merchandise to Tux Co. for $5,400 under credit terms of n/10, 100 shipping point, Invoice dated August 19. The merchandise had cost 52,700 . 22. Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Loue's gave a. price reduction (allowance) of speo to Tux, and credited Tux's sccounts recelveble for that amount. 29 Recelved Fux's cash paynent for the amount due from the Auguit is sale less the price allowance from August 22. 3a Pald Aren Company the anount dut from the Aupust I purchase. Journal entry worksheet 3567816 Sold merchandise to Baird Corp. for $6,300 under credit terms of 2/10,n/60, FOB destination, invoice dated August 5. Note: Enter debits before credits. Journal entry worksheet 5 Note: Enter debits before credits. Journal entry worksheet Purchased merchandise from Waters Corporation for $8,000 under credit terms of 1/10,n/45, FOB shipping point, invoice dated August 8. Note: Enter debits before credits. Journal entry worksheet Paid $240 cash for shipping charges related to the August 5 sale to Baird Corp. Note: Enter debits before credits. Journal entry worksheet 1 2 816 Baird returned merchandise from the August 5 sale that was sold for $1,000. Note: Enter debits before credits. Journal entry worksheet 1 2 34 Record the merchandise, cost $500, that was restored to inventory. Note: Enter debits before credits. Journal entry worksheet 3466 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of $800 off the $8,000 of goods purchased. Lowe's debited accounts payable for $800. Note: Enter debits before credits. Journal entry worksheet (1) . 6 7 At Aron's request, Lowe's paid $360 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron. Note: Enter debits before credits. Journal entry worksheet 1) 7 8 Received balance due from Baird Corp. for the August 5 sale less the return on August 10. Note: Enter debits before credits. Journal entry worksheet 1 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Note: Enter debits before credits. Journal entry worksheet 1 Sold merchandise to Tux Co. for $5,400 under credit terms of n/10, FOB shipping point, invoice dated August 19. Note: Enter debits before credits. Journal entry worksheet ( 1)910 Record cost of merchandise sold, $2,700. Note: Enter debits before credits. Journal entry worksheet 1 9 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 $900 to Tux, and credited Tux's accounts receivable for that amount. Journal entry worksheet (1) .9 Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. Note: Enter debits before credits. Journal entry worksheet 1 Paid Aron Company the amount due from the August 1 purchase. Note: Enter debits before credits
