Prepare journal entries to record the following transactions

Prepare journal entries to record the following transactions for a retail store. The company uses a perpet- ual inventory system and the gross method. Exercise 4-3 Recording purchases Apr. 2 Purchased $4,600 of merchandise from Lyon Company with credit terms of 2/15,n/6,ipuchss seum purchases allowances P1 3 4 17 dated April 2, and FOB shipping point. Paid $300 cash for shipping charges on the April 2 purchase. Returned to Lyon Company unacceptable merchandise that had an invoice price of $600. Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. Purchased $8,500 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination. After negotiations, received from Frist a $500 allowance toward the $8,500 owed on the April 18 purchase. 18 21 Check Aprl 28, C. Cas 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount. $79

Solution

Ex-4-3 Date General Journal Debit Credit Apr. 2 Merchandise Inventory       4,600 Accounts Payable—Lyon                4,600 Purchased merchandise on credit 3 Merchandise Inventory          300 Cash                   300 Paid shipping charges on purchased merchandise 4 Accounts Payable—Lyon          600 Merchandise Inventory                   600 Returned unacceptable merchandise 17 Accounts Payable—Lyon       4,000 Merchandise Inventory*                     80 Cash                3,920 *[($4,600 - $600) x 2%] Paid balance (less 2%) within discount period 18 Merchandise Inventory       8,500 Accounts Payable—Frist                8,500 Purchased merchandise on credit 21 Accounts Payable—Frist          500 Merchandise Inventory                   500 Received an allowance on purchase 28 Accounts Payable—Frist       8,000 Merchandise Inventory*                     80 Cash                7,920 *[($8,500 - $500) x 1%] Paid balance (less 1%) within discount period. QS-4-4 Merchandise (gross) Terms Calculation Amount a. $                                                                                                              5,000 2/10, n/60 (5000 - 5000 x 2%) $          4,900 b. $                                                                                                            20,000 1/15, EOM (20000 - 20000 x 1%) $        19,800 c. $                                                                                                            75,000 1/10, n/30 (75000 - 75000 x 1%) $        74,250 d. $                                                                                                            10,000 3/15, n/45 (10000 - 10000 x 3%) $          9,700