Question

Need help preparing journal entries.

2		Sold merchandise to Creek Co. for $950 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $550.
		3		Paid $140 cash for freight charges on the purchase of July 1.
		8		Sold merchandise that had cost $1,900 for $2,300 cash.
		9		Purchased merchandise from Leight Co. for $2,400 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
		11		Returned $400 of merchandise purchased on July 9 from Leight Co. and debited its account payable for that amount.
		12		Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.
		16		Paid the balance due to Boden Company within the discount period.
		19		Sold merchandise that cost $1,000 to Art Co. for $1,500 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
		21		Gave a price reduction (allowance) of $250 to Art Co. for merchandise sold on July 19 and credited Art's accounts receivable for that amount.
		24		Paid Leight Co. the balance due, net of discount.
		30		Received the balance due from Art Co. for the invoice dated July 19, net of discount.
		31		Sold merchandise that cost $5,400 to Creek Co. for $7,500 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Prepare journal entries to record the following merchandising transactions of Lowe’s, which uses the perpetual inventory system and the gross method. Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Aron.

Aug.		1		Purchased merchandise from Aron Company for $10,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.
		5		Sold merchandise to Baird Corp. for $7,000 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $5,000.
		8		Purchased merchandise from Waters Corporation for $9,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8.
		9		Paid $120 cash for shipping charges related to the August 5 sale to Baird Corp.
		10		Baird returned merchandise from the August 5 sale that had cost Lowe’s $500 and was sold for $1,000. The merchandise was restored to inventory.
		12		After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe’s received a price reduction from Waters of $900 off the $9,000 of goods purchased. Lowe's debited accounts payable for $900.
		14		At Aron’s request, Lowe’s paid $190 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron.
		15		Received balance due from Baird Corp. for the August 5 sale less the return on August 10.
		18		Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12.
		19		Sold merchandise to Tux Co. for $6,000 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $3,000.
		22		Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe’s gave a price reduction (allowance) of $1,000 to Tux, and credited Tux's accounts receivable for that amount.
		29		Received Tux’s cash payment for the amount due from the August 19 sale less the price allowance from August 22.
		30		Paid Aron Company the amount due from the August 1 purchase.

Answer 1

Journal Entry
Date	Particulars	Debit	Credit
Jul-02	Accounts Receivable - Creek & Co	$950
	Sales		$950
	(To record the sales)
	Cost of Goods Sold	$550
	Merchandise Inventory		$550
	(To record the Cost of Goods Sold)
Jul-03	Freight In	$140
	Cash		$140
	(To record Fright Expenses)
Jul-08	Cash	$2,300
	Sales		$2,300
	(To record the sales)
	Cost of Goods Sold	$1,900
	Merchandise Inventory		$1,900
	(To record the Cost of Goods Sold)
Jul-09	Merchandise Inventory	$2,400
	Accounts Payable - Leight Co.		$2,400
	(To record the inventory purchase )
Jul-11	Accounts Payable - Leight Co.	$400
	Merchandise Inventory		$400
	(To record purchase return)
Jul-12	Cash ($950 * 98%)	$931
	Sales Discount ($950 * 2%)	$19
	Accounts Receivable - Creek & Co		$950
Jul-16	Details Not Available about boden compnay
Jul-19	Accounts Receivable - Art & Co	$1,500
	Sales		$1,500
	(To record the sales)
	Cost of Goods Sold	$1,000
	Merchandise Inventory		$1,000
	(To record the Cost of Goods Sold)
Jul-21	Discount and Allowance	$250
	Accounts Receivable - Art & Co		$250
Jul-24	Accounts Payable - Leight Co.	$2,000
	Discount ($2,000 * 2%)		$40
	Cash ($2,000 * 98%)		$1,960
Jul-30	Cash ($1,250 * 98%)	$1,225
	Discount ($1,250 * 2%)	$25
	Accounts Receivable - Art & Co		$1,250
Jul-31	Accounts Receivable - Creek & Co	$7,500
	Sales		$7,500
	(To record the sales)
	Cost of Goods Sold	$5,400
	Merchandise Inventory		$5,400
	(To record the Cost of Goods Sold)

Journal Entry
Date	Particulars	Debit	Credit
Aug-01	Merchandise Inventory	$10,000
	Accounts Payable-Aron Company		$10,000
Aug-05	Accounts Receivable - Baird Corp.	$7,000
	Sales		$7,000
	(To record the sales)
	Cost of Goods Sold	$5,000
	Merchandise Inventory		$5,000
	(To record the Cost of Goods Sold)
Aug-08	Merchandise Inventory	$9,000
	Accounts Payable-Water Corporation		$9,000
	(To record the inventory purchase )
Aug-09	Merchandise Inventory	$120
	Cash		$120
	(To record Freight Expenses)
Aug-10	Sales Return	$1,000
	Accounts Receivable - Baird Corp.		$1,000
	(To record the sales return)
	Merchandise Inventory	$500
	Cost of Goods Sold		$500
	(To record the return in Cost of goods sold)
Aug-12	Accounts Payable-Water Corporation	$900
	Discount & Allowance		$900
	(To record discount)
Aug-14	Accounts Payable-Aron Company	$190
	Freight in		$190
	(To record freight expenses on behalf of Aron Company)
Aug-15	Cash ($6,000 * 98%)	$5,880
	Discount ($6,000 * 2%)	$120
	Accounts Receivable - Baird Corp.		$6,000
Aug-18	Accounts Payable-Water Corporation	$8,100
	Discount & Allowance ($8,100 * 1%)		$81
	Cash ($8,100 * 99%)		$8,019
Aug-19	Accounts Receivable - Tux Co.	$6,000
	Sales		$6,000
	(To record the sales)
	Cost of Goods Sold	$3,000
	Merchandise Inventory		$3,000
	(To record the Cost of Goods Sold)
Aug-22	Discount & Allowance	$1,000
	Accounts Receivable - Tux Co.		$1,000
Aug-29	Cash	$5,000
	Accounts Receivable - Tux Co.		$5,000
Aug-30	Accounts Payable-Aron Company
	Cash ($10,000 - $190)		$9,810
	(To record payment after adjustment for Freight Expense)