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 $4,600 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $300 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $600. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased $8,500 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 $8,500 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Answer 1

Answer:

Apr. 2 Purchased $4,600 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.

Dr Merchandise inventory 4,600

    Cr Accounts payable 4,600

3 Paid $300 cash for shipping charges on the April 2 purchase.

Dr Merchandise inventory 300

    Cr Cash 300

4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $600.

Dr Accounts payable 600

    Cr Merchandise inventory 600

17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.

Dr Accounts payable 4,000

    Cr Cash 3,920

    Cr Purchase discounts 80

18 Purchased $8,500 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.

Dr Merchandise inventory 8,500

    Cr Accounts payable 8,500

21 After negotiations, received from Frist a $500 allowance toward the $8,500 owed on the April 18 purchase.

Cr Accounts payable 500

    Cr Purchase allowances 500

28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Dr Accounts payable 8,000

    Cr Cash 7,920

    Cr Purchase discounts 80