O file://home/chronos/u 85e4d13e1f5f79c17331 679e7acff4493. r-- , e o 238 Chapte
ID: 2336890 • Letter: O
Question
O file://home/chronos/u 85e4d13e1f5f79c17331 679e7acff4493. r-- , e o 238 Chapter 5 Accounting for Merchandising Operations Problem 5-2A Preparing journal entries petual inventory system and the gross method. (Hint: It will help to identify each receivable and payable llowing merchandising transactions of Lowe's, which uses Prepare journal entries to record the fo for example, record the purchase on August 1 in Accounts Payable-Aron.) Aug. 1Purchased merchandise from Aron Company for $7 500 under credit terms of I/10, n/30, FOB destination, invoice dated August 1 imvoice dated August 5. The merchandise had cost $4,000 FOB shipping point, invoice dated August 8. P1 P2 5 Sold merchandise to Baird Corp. foe $5,.200 under credit terms of 2/10, n/60, FOB destination 8 Purchased merchandise from Waters Corporation for $5400 under credit terms of 1/10, n/45 9 Paid $125 cash for shipping charges related to the August 5 sale to Baird Corp Check Aug9.DxDrwery Expense, $125 10 Baird returned merchandise from the August 5 sale that had cost Lowe's $400 and was sold for S600. The merchandise was restored toi After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a credit memorandum from Waters granting a the $5,400 of goods purchased price reduction of $400 off 14 At Aron's request. Lowe's paid $200 cash for freight charges on the August I parchase, reduc- 15 Received halance due from Baird Corp. for the August 5 sale less the return on August Io. 18 Paid the amount due Waters Corporation for the August 8 parchase less the price allowance 19 Sold merchandise to Tus Co, for $4,800 under credit terms of n/10, FOB shipping point, in- 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet ing the amount owed to Aron. Aug 18, C Canh $4,990 from August 12 voice dated August 19 The merchandise had cost $2.400 specifications. Lowe's sent Tux a $500 credit memorandum toward the $4,800 invoice to re solve the issue ig 29, Dr. Cash 29 Received Tux 's cash payment for the amount due from the August 19 sale less the price allow. 54 300 ance from August 22 30 Paid Aron Company the amount due from the Augusd I purchaseExplanation / Answer
Answer:
Date
Description
Debit $
Credit
August
1
Merchandise inventory
7500
Accounts payable—Arotek
7500
5
Accounts receivable—Laird
5200
Sales
5200
5
Cost of goods sold
4000
Merchandise inventory
4000
8
Merchandise inventory (5400+140)
5540
Accounts payable—Waters
5540
9
Delivery expense
125
Cash
125
10
Sales returns and allowances
600
Accounts receivable—Laird
600
Merchandise inventory
400
Cost of goods sold
400
12
Accounts payable—Waters
400
Merchandise inventory
400
14
Accounts payable—Arotek
200
Cash
200
15
Cash
4508
Sales discounts
92
Accounts receivable—Laird (5200-600)
4600
18
Accounts payable—Waters (5540-400)
5140
Merchandise inventory (5400-400)*1%
50
Cash
5090
19
Accounts receivable—Tux
4800
Sales
4800
Cost of goods sold
2400
Merchandise inventory
2400
22
Sales returns and allowances
500
Accounts receivable—Tux
500
29
Cash
4257
Sales discounts (4300*1%)
43
Accounts receivable—Tux (4800-500)
4300
30
Accounts payable—Arotek
7300
Cash (7500-200)
7300
Date
Description
Debit $
Credit
August
1
Merchandise inventory
7500
Accounts payable—Arotek
7500
5
Accounts receivable—Laird
5200
Sales
5200
5
Cost of goods sold
4000
Merchandise inventory
4000
8
Merchandise inventory (5400+140)
5540
Accounts payable—Waters
5540
9
Delivery expense
125
Cash
125
10
Sales returns and allowances
600
Accounts receivable—Laird
600
Merchandise inventory
400
Cost of goods sold
400
12
Accounts payable—Waters
400
Merchandise inventory
400
14
Accounts payable—Arotek
200
Cash
200
15
Cash
4508
Sales discounts
92
Accounts receivable—Laird (5200-600)
4600
18
Accounts payable—Waters (5540-400)
5140
Merchandise inventory (5400-400)*1%
50
Cash
5090
19
Accounts receivable—Tux
4800
Sales
4800
Cost of goods sold
2400
Merchandise inventory
2400
22
Sales returns and allowances
500
Accounts receivable—Tux
500
29
Cash
4257
Sales discounts (4300*1%)
43
Accounts receivable—Tux (4800-500)
4300
30
Accounts payable—Arotek
7300
Cash (7500-200)
7300
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