Question

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 $6,200 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $200 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $450. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased $11,700 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination. 21 After negotiations, received from Frist a $500 allowance toward the $11,700 owed on the April 18 purchase. 28 Sent check to Frist paying f

Answer 1

Answer:

April 2

Merchandise $6,200 (debit)

Accounts Payable :  Lyon Company $6,200 (credit)

Purchase of Merchandise on credit from Lyon Company (FOB)

April 3

Accounts Payable :  Lyon Company $200 (debit)

Cash $200 (credit)

Payment of Shipping Costs included in the Invoice

April 4

Accounts Payable :  Lyon Company $450 (debit)

Merchandise $450 (credit)

Return of unacceptable merchandise to Lyon Company

April 17

Accounts Payable :  Lyon Company $5,550 (debit)

Discount Received $111 (credit)

Cash $5,439 (credit)

Settlement of Account with supplier and recognition of discount received

April 18

Merchandise $11,700 (debit)

Accounts Payable :  Frist Corp $11,700 (credit)

Purchase of Merchandise on credit from Frist Corp (FOB)

April 21

Accounts Payable :  Frist Corp  $500 (debit)

Merchandise $500 (credit)

Allowance received from supplier (Frist Corp)

Explanation:

There is some missing transactions for the dates closer to end of April.

However the rest of the journals and their narrations have been prepared. This will help with completing the rest of the transactions.

See journals above.