Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4,600

Question

Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4,600 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point. 3 Paid $258 for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $700. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased merchandise from Frist Corp. under the following terms: $9,650 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination. 21 After negotiations, received from Frist a $2,702 allowance on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the discount and allowance. Prepare journal entries to record the following transactions for a retail store. Assume a perpetual inventory system. View transaction list View journal entry worksheet No Date General Journal Debit Credit April 02 Merchandise inventory 4,600 Accounts payable-Lyon 4,600 2April 0 2 April 03 Merchandise inventory Cash 258 258 3April 04 Accounts payable-Lyon 700 Merchandise inventory 700 4 April 17 Accounts payable-Lyon 3,900 Merchandise inventory Cash

Explanation / Answer

Date Account Title & Explaination Debit Credit 2-Apr Merchandis Inventory $   4,600 Accounts Payable $ 4,600 ( TO record the purchase of inventory on credit) 3-Apr Merchandis Inventory $      258 Cash $    258 ( To record the payment of shipping charges on the inventory) 4-Apr Accounts Payable $      700 Merchandis Inventory $    700 ( To record the purchase returns) 17-Apr Accounts Payable (4600-700) $   3,900 Merchandis Inventory(3900*2%) $      78 Cash (3900*98%) $ 3,822 ( To record the payment of accounts payable ) 18-Apr Merchandis Inventory $   9,650 Accounts Payable $ 9,650 ( TO record the purchase of inventory on credit) 21-Apr Accounts Payable $   2,702 Merchandis Inventory $ 2,702 ( To record the allowance allowed on purchase of the inventory 28-Apr Accounts Payable (9650-2702) $   6,948 Merchandis Inventory (6948*2%) $    139 Cash (6948*98%) $ 6,809 ( To record the payment of accounts payable )

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