Answer:
A Retail Store
Journal Entries:
Apr. 2: Debit Inventory $3,600
Credit Accounts Payable (Lyon Company) $3,600
To record the purchase of inventory on account; FOB Shipping point, credit terms of 2/15, n/60.
Apr. 3: Debit Freight-in $360
Credit Cash $360
To record the payment of freight with cash.
Apr. 4: Debit Accounts Payable (Lyon Company) $500
Credit Inventory $500
To record the return of inventory on account.
Apr. 17: Debit Accounts Payable (Lyon Company) $3,100
Credit Cash $3,038
Credit Cash Discounts $62
To record the payment of cash on account, with discount.
Apr. 18: Debit Inventory $6,500
Credit Accounts Payable (Frist Corp.) $6,500
To record the purchase of inventory on account; FOB destination, credit terms of 1/10, n/30.
Apr. 21: Debit Accounts Payable (Frist Corp.) $500
Credit Inventory $500
To record the allowance received.
Apr. 28: Debit Accounts Payable (Frist Corp.) $6,000
Credit Cash $5,940
Credit Cash Discounts $60
To record the payment of cash on account, with discount.
Explanation:
a) Data and Analysis:
Apr. 2: Inventory $3,600 Accounts Payable (Lyon Company) $3,600. FOB Shipping point, credit terms of 2/15, n/60.
Apr. 3: Freight-in $360 Cash $360
Apr. 4: Accounts Payable (Lyon Company) $500 Inventory $500
Apr. 17: Accounts Payable (Lyon Company) $3,100 Cash $3,038 Cash Discounts $62
Apr. 18: Inventory $6,500 Accounts Payable (Frist Corp.) $6,500. FOB destination, credit terms of 1/10, n/30.
Apr. 21: Accounts Payable (Frist Corp.) $500 Inventory $500
Apr. 28: Accounts Payable (Frist Corp.) $6,000 Cash $5,940 Cash Discounts $60
