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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.
April 2 Purchased $4,000 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. April 3 Paid $300 cash for shipping charges on the April 2 purchase. April 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $500. April 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. April 18 Purchased $7,300 of merchandise from Frist Corporation with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination. April 21 After negotiations over scuffed merchandise, received from Frist a $500 allowance toward the $7,300 owed on the April 18 purchase. April 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.
View transaction list
Journal entry worksheet
1
2 3 4 5 6 7
Purchased $4,000 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
Note: Enter debits before credits.
Apr 02
•
Record entry
gear entry
Kew general journal
Expert Solution
| Journal Entries: | |||
| Date | Account Titles and Explanation | Debit | Credit |
| 02-Apr | Merchandise Inventory | 4000 | |
| Accounts Payable - L Company | 4000 | ||
| (To record purchase of inventory) | |||
| 03-Apr | Merchandise Inventory | 300 | |
| Cash | 300 | ||
| (To record shipping charges paid) | |||
| 04-Apr | Accounts Payable - L Company | 500 | |
| Merchandise Inventory | 500 | ||
| (To record return of merchandise) | |||
| Apr-17 | Accounts Payable - L Company | 3500 | |
| Merchandise Inventory | 70 | ||
| Cash | 3430 | ||
| (To record payment made on purchase) | |||
| Apr-18 | Merchandise Inventory | 7300 | |
| Accounts Payable - F Corp. | 7300 | ||
| (To record purchase of inventory) | |||
| Apr-21 | Accounts Payable - F Corp. | 500 | |
| Merchandise Inventory | 500 | ||
| (To record allowance received) | |||
| Apr-28 | Accounts Payable - F Corp. | 6800 | |
| Merchandise Inventory | 68 | ||
| Cash | 6732 | ||
| (To record payment made on purchase) | |||
| Journal Entries: | |||
| Date | Account Titles and Explanation | Debit | Credit |
| 02-Apr | Merchandise Inventory | 4000 | |
| Accounts Payable - L Company | 4000 | ||
| (To record purchase of inventory) | |||
| 03-Apr | Merchandise Inventory | 300 | |
| Cash | 300 | ||
| (To record shipping charges paid) | |||
| 04-Apr | Accounts Payable - L Company | 500 | |
| Merchandise Inventory | 500 | ||
| (To record return of merchandise) | |||
| Apr-17 | Accounts Payable - L Company | =4000-500 | |
| Merchandise Inventory | =3500*2% | ||
| Cash | =3500-70 | ||
| (To record payment made on purchase) | |||
| Apr-18 | Merchandise Inventory | 7300 | |
| Accounts Payable - F Corp. | 7300 | ||
| (To record purchase of inventory) | |||
| Apr-21 | Accounts Payable - F Corp. | 500 | |
| Merchandise Inventory | 500 | ||
| (To record allowance received) | |||
| Apr-28 | Accounts Payable - F Corp. | =7300-500 | |
| Merchandise Inventory | =6800*1% | ||
| Cash | =6800-68 | ||
| (To record payment made on purchase) |
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