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Prepare journal entries to record the following transactions for a retail store
Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.
| Apr. | 2 | Purchased $6,100 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. | ||
| Apr. | 3 | Paid $280 cash for shipping charges on the April 2 purchase. | ||
| Apr. | 4 | Returned to Lyon Company unacceptable merchandise that had an invoice price of $650. | ||
| Apr. | 17 | Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. | ||
| Apr. | 18 | Purchased $11,500 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination. | ||
| Apr. | 21 | After negotiations, received from Frist a $600 allowance toward the $11,500 owed on the April 18 purchase. | ||
| Apr. | 28 | Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount. |
Expert Solution
Answer:
|
Date |
General Journal |
Debit |
Credit |
|
April 02 |
Merchandise inventory |
6100 |
|
|
Accounts payable-Lyon |
6100 |
||
|
April 03 |
Merchandise inventory |
280 |
|
|
Cash |
280 |
||
|
April 04 |
Accounts payable-Lyon |
650 |
|
|
Merchandise inventory |
650 |
||
|
April 17 |
Accounts payable-Lyon |
5450 |
|
|
Merchandise inventory |
109 |
||
|
Cash |
5341 |
||
|
April 18 |
Merchandise inventory |
11500 |
|
|
Accounts payable-First Corp. |
11500 |
||
|
April 21 |
Accounts payable-First Corp. |
600 |
|
|
Merchandise inventory |
600 |
||
|
April 28 |
Accounts payable-First Corp. |
10900 |
|
|
Merchandise inventory |
109 |
||
|
Cash |
10791 |
Explanation:
Apr. 17: Cash paid within discount period less returns = [($6100 − $650) × (100% − 2%)] = $5341
Apr. 28: Cash paid balance within discount period = [($11500 − $600) × (100% − 1%)] = $10791
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