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Problem 4-2A (Algo) Preparing journal entries for merchandising activities LO P1, P2 Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. Hint: it will help to identify each recelvable and payable; for example, record the purchase on August 1 in Accounts Payable-Aron. August 1 Purchased merchandise from Aron Company for $6,000 under eredit terms of 1/10, n/30, FoB destination, involce dated August 1 . August 5 sold merchandise to Baird Corporation for $4,200 under credit terns of 2/10, n/60, rob destination, involce dated Augunt 5. The merchandise had cost $3,000. August 8 Purchased merchandise from Waters Corporation for $5,000 under credit terms of 1/10, n/45, Fob ahipping point, involee dated gqust 8 . August 9 Paid $290 cash for shipping charges related to the August 5 sale to Baird Corporation. August 10 baird returned merehandise from the Auqust 5 sale that had cost Lowe's $500 and was sold for $1,000. The merchandise was restored to inventory. August 12 After negotiations with Waters Corporation conceraing problens with the purchases on August 8 , Lowe'n received a price reduction fros Waters of $500 of f the $5,000 of goods purchased. Lowe's debited accounts payable for $500. August 14 At Aron's request, Lowe's paid $180canh for treight charges on the August 1 purchase, reducing the anount oved (accountin payable) to Aron. Auguet 15 Recelved balance due from Baird Corporation for the August 5 sale less the return on August 10. August 18 Paid the anount due Watern Corporation for the August 8 purchane leas the price allowance fron August 12. August 19 Sold merchandise to Tux Company for $3,600 under credit terms of n/10, rob shipping point, involce dated August 19. The merchandise had cost $1,800. August 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet apecificationn. Lowe's gave a price reduction (allowance) of $600 to Tux and credited Tux's accounts receivable for that. amount. August 29 Received Tux's cakh payment for the anount due from the August 19 sale less the price allowance trom Auguat August 30 Vaid Aron Company the amount due froa the August 1 purchase. 22. August 30 paid Aron Company the amount due from the August 1 purchase. Journal entry worksheet Purchased merchandise from Aron Company for $6,000 under credit terms of 1/10,n/30,FOB destination, invoice dated August 1. Note: Enter debits before credits. Problem 4-2A (Algo) Preparing journal entries for merchandising activities LO P1, P2 Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. Hint: it will help to identify each recelvable and payable; for example, record the purchase on August 1 in Accounts Payable-Aron. August 1 Purchased merchandise from Aron Company for $6,000 under eredit terms of 1/10, n/30, FoB destination, involce dated August 1 . August 5 sold merchandise to Baird Corporation for $4,200 under credit terns of 2/10, n/60, rob destination, involce dated Augunt 5. The merchandise had cost $3,000. August 8 Purchased merchandise from Waters Corporation for $5,000 under credit terms of 1/10, n/45, Fob ahipping point, involee dated gqust 8 . August 9 Paid $290 cash for shipping charges related to the August 5 sale to Baird Corporation. August 10 baird returned merehandise from the Auqust 5 sale that had cost Lowe's $500 and was sold for $1,000. The merchandise was restored to inventory. August 12 After negotiations with Waters Corporation conceraing problens with the purchases on August 8 , Lowe'n received a price reduction fros Waters of $500 of f the $5,000 of goods purchased. Lowe's debited accounts payable for $500. August 14 At Aron's request, Lowe's paid $180canh for treight charges on the August 1 purchase, reducing the anount oved (accountin payable) to Aron. Auguet 15 Recelved balance due from Baird Corporation for the August 5 sale less the return on August 10. August 18 Paid the anount due Watern Corporation for the August 8 purchane leas the price allowance fron August 12. August 19 Sold merchandise to Tux Company for $3,600 under credit terms of n/10, rob shipping point, involce dated August 19. The merchandise had cost $1,800. August 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet apecificationn. Lowe's gave a price reduction (allowance) of $600 to Tux and credited Tux's accounts receivable for that. amount. August 29 Received Tux's cakh payment for the anount due from the August 19 sale less the price allowance trom Auguat August 30 Vaid Aron Company the amount due froa the August 1 purchase. 22. August 30 paid Aron Company the amount due from the August 1 purchase. Journal entry worksheet Purchased merchandise from Aron Company for $6,000 under credit terms of 1/10,n/30,FOB destination, invoice dated August 1. Note: Enter debits before credits

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