Question

Exercise 4-3 Recording purchases, purchases returns, and purchases allowances LO P1 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, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $350 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $850. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased $5,700 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 $5,700 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount. No Debit Credit Date Apr 02 1 General Journal Merchandise inventory Accounts payable-Lyon 3,200 3,200 2 Apr 03 350 Merchandise inventory Cash 350 3 Apr 04 800 Accounts payable-Lyon Merchandise inventory 800 4 Apr 17 2,400 Accounts payable-Lyon Cash Merchandise inventory 2,352 48 %

Answer 1

Journal entry

No	Date	General Journal	Debit	Credit
1	Apr 02	Merchandise inventory	3200
		Accounts payable-Lyon		3200
2	Apr 03	Merchandise inventory	350
		Cash		350
3	Apr 04	Account payable-Lyon	850
		Merchandise inventory		850
4	Apr 17	Account payable-Lyon (3200-850)	2350
		Cash (2350*98%)		2303
		Merchandise inventory		47
5	Apr 18	Merchandise inventory	5700
		Account payable-Frist Corp		5700
6	Apr 21	Account payable-Frist Corp	500
		Merchandise inventory		500
7	Apr 28	Account payable-Frist Corp (5700-500)	5200
		Cash (5200*99%)		5148
		Merchandise inventory		52