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 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 merchandise from Aron Company tor $7,50o under credit terns of 1/10, n/30, rOB destination, invoice dated August l 5 Sold nerchandise to Baird Corp. for $5,200 under credit terms of 2/10, n/60, FOB dest ination, invoice dated August S. The merchandise had cost $4,000. 8 Purchased nerchandise from Waters Corporation for $5,400 under eredit terms of 1/10, n/45. FOs shipping point, invoice dated August 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 $400 and was sold for 5600:The merchandise was restored to inventory 12 After negotiations with waters corporation concerning problems with the purchase, on August S, twereceived a credit memor andum from Waters granting a price reduction of $400 off the $5,400 of goods purehased. 14 At Aron's request, Lowe's paid $200 cash for treight charges on the August 1 purchase, reducing the amount oved 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 Aagast 8 purchase less the price allowance fron August 12 19 Sold merchandise to Tux Co. for $4,800 under credit terms of n/10, FoB ehipping point invoice dated August 19 The merchandise had eost $2,400 22 Tux requested a price reduction on the August 19 1e because the nerchandise did not nees peatieat ions Love's sent Tux a $500 credit menorandun toward the $4.800 invoice to resolve the iesue. 29 Received Tux's cash payment for the amount due from the August 19 sale less the price allovance fros Auguat 22 30 Paid Aron Company the anount due fron the ugust purchase. View transaction list