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 $3,200 of merchandise from Lyon Company with credit terms of 2/15, 1/60. Invoice dated April 2. And FOB shipping point. Paid $270 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $800. 17 Sent a cheek to Lyon Company for the April 2 purchase, not of the discount and the returned merchandise 18 Purchased $5,700 of merchandise from Frist Corp. with credit terms of 1/10, 1/30, Invoice dated April 18, and POR destination. 21 After negotiations, received from Frist a $600 allowance toward the $5,700 owed on the April 18 purchase 28 Sent check to Friat paying for the April 18 purchase, net of the allowance and the discount.

Answer 1

Date	Account	Debit	Credit
Apr. 2	Merchandise Inventory	$3200
	Accounts Payable		$3200
3	Merchandise Inventory	270
	Cash		270
4	Accounts Payable	800
	Merchandise Inventory		800
17	Accounts Payable (3200-800)	$2400
	Cash {(3200-800)*0.98}		$2352
	Merchandise Inventory		$48
18	Merchandise Inventory	5700
	Accounts Payable		5700
21	Merchandise Inventory	600
	Accounts Payable		600
28	Accounts Payable (5700-600)	5100
	Cash (5100*.99)		5059
	Merchandise Inventory		51