problem 5-2 Preparing entries for merchandising activites perpetual LO P1 P2

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24 Problem 5-2A 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 systern and the gross method. (Hint: It will help to Identify each recevable and payable, for example, record the purchase on August 1 in Accounts Payable-Aron.) Aug. 1 Purchased merchandise from Aron Company tor s7, 500 under credit tems of 1/10, n/30, FOB destination, invoice dated August 1. destination, invoice dated August S. The merchandise had cost $4, 00D- n/45, FOB shipping point, invoice dated Auguat 8 elock 5 Sold merchandise to Baird Corp. tor $5, 200 under credst terma of 2/10, n/60, FOB 8 Purchased merchandiae from Waters Corporation for $5, 400 under credit terms of 1/10, 9 paid $125 cash for shipping charges related to the Aagaat S ale to Baird Corp. 10 Baird returned merchandie from the August S sale that had cost. Loe's s400 and 'waa aald Eor $600. The merchandise was restored to inventory. 12 fter negotsations with Matera Corporation concerning problema with the purchasea on August 8, Lowers received a credit memorandum from Katera granting a price reduction o $400 off the s5,400 of goods purchased. 14 At ron'a requeat, Lowes paid $200 cash For freight charges on the August 1 reducing the amount owed to leon. 15 Received balance due from Based corp. for the August s aale leaa the return on Aug st 10 18 Faid the amount due Waters Corporatzon for the Auguat 8 purchase less the price a 1owance 19 Sold merchandise to Tux Co. Eoz 4. 900 under ckedit tezma of n/LO FOB ahi 22 Tux requested a price reducticn on the Auquet 19 esle because the merchandise did not trom August 12. for $4, 809 under credit terms invoice dated August 19 e merchandise had e6s: s2, 409 meet opecificetions. Lowe's sent Fuxs500 crest memorandum toward the $4,800 involce to resolve the tesue. 29 Received Tux' s cash pasment foraicunt due from the August 19 sale less te prace 30 Paid Aron Company the amount due from the|auguet 1 purchase. allowance from August 22