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 $4,000 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
		3		Paid $280 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 check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
		18		Purchased $7,300 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 $7,300 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

No. Date 1. Apr. 02 eral Journal Debit Credit Merchandise Inventory $4,000 Accounts Payable - Lyon (to second merchandise purchased) $4,000 2. Apr. 03 $200 Merchandise Inventory Cash To record shipping charges paid) $ 280 3. Apr. 04 $ 800 Accounts Payable - Lyon Merchandise Inventory To secosd merchandise returned) $ 800 4. Apr. 17 $3,200 $ 64 Accounts Payable - Lyon Merchandise Inventory Cash (To record check sent) $3,136 5. Apr. 18 $ 7,300 Merchandise Inventory $ 7,300 Accounts payable - frist (To second merchandise purchased)

6. Ao Apr. 21 $500 Accounts Payable - frist Merchandise Inventory To second allowance received) $ 500 7. Apr. 28 Accounts Payable - frist $6,800 Merchandise Inventory $68 Casho $6,732 (To record check beut) calculation: Apr. 17. Accounts Payable-Lyon = Merchandise Purchased - Returned Merchandise - $4,000 - $ 800 = $ 3,200 Merchandise Inventory a $3,200 x 2% discount = $64 Cash = accounts payable - Merchandise Inventory = $3,200 - $ 64 = $ 3,136 Apr. 28: Accounts Payable = Merchandise Purchased - Allowance received $7,300 - $500 & $6,800 Merchandise Inventory = $6,000 X 1% discount = $ 68 cash & Accounts Payable - Merchandise Inventory = $ 6,800 - $ 68 = $ 6,732