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Problem 5-2A Preparing journal entries for merchandising activities-perpetual system LO P1, P2 Prepare journal entries to record the following merchandising transactions of Lowes, which uses
Problem 5-2A Preparing journal entries for merchandising activities-perpetual system LO P1, P2
Prepare journal entries to record the following merchandising transactions of Lowes, 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 PayableAron.)
Aug. | 1 | Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. | ||
5 | Sold merchandise to Baird Corp. for $3,500 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $2,000. | |||
8 | Purchased merchandise from Waters Corporation for $4,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. | |||
9 | Paid $260 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 Lowes $500 and was sold for $1,000. The merchandise was restored to inventory. | |||
12 | After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowes received a credit memorandum from Waters granting a price reduction of $400 off the $4,000 of goods purchased. | |||
14 | At Arons request, Lowes paid $400 cash for freight charges on the August 1 purchase, reducing the amount owed 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 August 8 purchase less the price allowance from August 12. | |||
19 | Sold merchandise to Tux Co. for $3,000 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $1,500. | |||
22 | Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowes sent Tux a $500 credit memorandum toward the $3,000 invoice to resolve the issue. | |||
29 | Received Tuxs cash payment for the amount due from the August 19 sale less the price allowance from August 22. | |||
30 | Paid Aron Company the amount due from the August 1 purchase. |
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 for $5,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. 5 Sold merchandise to Baird Corp. for $3,500 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $2,000 8 Purchase e dise from Waters Corporation for $4,000 under credit terms of 1/10, n/45, FOB shipping point, 9 Paid $260 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 $500 and was sold for $1,000. The merchandise was restored to inventory 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a credit memorandum from Waters granting a price reduction of $400 off the $4,000 of goods purchased s request, Lowe's paid $400 cash for freight charges on the August 1 purchase, reducing the amount owed 14 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 August 8 purchase less the price allowance from August 12 19 Sold merchandise to Tux Co. for $3,000 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $1,500 22 Tux requested a price eduction on the August 19 sale because the merchandise did not meet specifications. ** 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 amount due from the August 1 purchase. View transaction list Journal entry worksheet 7 2 3 6 16 1 4 5 Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1 Note: Enter debits before credits. Date General Journal Credit Debit Aug 01 Record entry Clear entry View general journal
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