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Problem 4-2A (Static) 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. August 1 Purchaed merchandise from Aron Company for $7,500 under credit toras of 1/10, n/30, FOB destination, invoice dated August 1 . August 5 sold merchandise to Baird Corporation for $5,200 under credit terms of 2/10, n/60, rob destination, invoice dated Auguet 5 , The morehandise had eost $4,000. August 8 Purchased merchandise from Waters Corporation for $5,400 under oredit terme of 1/10, n/45, FoD shipping point, involee dated August 8 . August 9 Paid $125 cash for ahipping charges related to the August 5 sale to Baird Corporation. pugust 10 Baird returned merchandise from the August 5 sale that had eost lowe's $400 and was sold for $600. The merchandise was restored to inventory. hagust 12 After negotiations with Waters Corporation concorning problemi with the purchases on August 8 , Lowe's received a price reduction from Katers of $400 off the $5,400 of goods purchalled, Lowe'a debited accounta payable for. 3400 Wugust 14 At Aron's request, Lowe' a pald $200 eash for freight chargen on the August 1 purehase, reducing the amount oved (account payable) to Aron. hugust 15 Recelved balance due froe Balrd Corporation for the August 5 wale less the return on August 10 . Qugunt 18 Paid the amount due Maters Corporation for the Auguet porchase lese the price allowance f rom August 12. Wugust 19 sold merchandine to Tux Company for:54, 800 under eredit terms of n/10, Fob shipping point, invoice dated Nugunt 22 . Tuxust 19. The merchandile had cost 52,400 . Tux requested a priee reduction on the sugust 19 aale because the aerchandise did not meet mpecifications. towe's gave a price reduction (allowance) of 5500 to Tux and eredited Fux' a aceounts receivable for that. hagust 29 Recelved Tux's cash payment for the anount dae from the August 19 sale lesa the price allowance from August hugust 10 Pald Aron conpany the anount due from the Augunt 1 purchase

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