Exercise 4-3 Recording purchases, purchases returns, and purchases allowances L&

Question

Exercise 4-3 Recording purchases, purchases returns, and purchases allowances L&P Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory gross method Apr. 2 Purchased SS, 900 ofmerehandise tr Lyon company with credit terns of 2/is, n/60, invoice dat 3 Paid 5360 cash tor shspping charges on the pril 2 purchase 1 Returned to 7 Sent a check FOB shipping point yon Company unacceptable serchandise that had an invoice price of ss00. to Lyon Company for the April 2 purchase, net of the discount and the returned m trom Frist Corp. with credic cezms or 1/10, n/30, invoice da and PoB destination 21 After negotiations, zeceived from Frist a s600 allovance tovard the $11,100 oved on the April View transaction ist Journal entry worksheet Paid $360 cash for shipping charges on the April 2 purchase. Note: Enter debits before credits. General Journal Apr 03 360 Cash 360 Record entry Clear entry View general journal KPrev 2 of 8

Explanation / Answer

Journal entry :

Date account and explanation debit credit Apr 2 Merchandise inventory 5900 Account payable 5900 (To record purchase) Apr 3 Merchandise inventory 360 Cash 360 (To record freight paid) Apr 4 Account payable 500 Merchandise inventory 500 (To record purchase return) Apr 17 Account payable (5900-500) 5400 Bank (5400*98%) 5292 Merchandise inventory (5400*2%) 108 (To record amount paid) Apr 18 Merchandise inventory 11100 Account payable 11100 (To record purchase) Apr 21 Account payable 600   Merchandise inventory 600 (To record purchase allowance) Apr 28 Account payable (11100-600) 10500 Bank (10500*99%) 10395   Merchandise inventory 105 (To record amount paid)

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