Prepare journal entries to record the following transactions for a retail store.
ID: 2499002 • Letter: P
Question
Prepare journal entries to record the following transactions for a retail store. Assume a perpetual inventory system Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4,600 price, invoice dated April 2. credit terms of 2/15, n/60, and FOB shipping point. 3 Paid $300 for shipping charges on the April 2 purchase. 4 Resumed 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 merchandise from Frist Corp. under the following terms: $8,500 price, invoice dated April 18. credit terms of 2/10, n/30, and FOB destination. 21 After negotiations, received from Frist a $1,100 allowance on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the discount and allowance.Explanation / Answer
Sl No Date Account Tittles Debit credit 1 02-Apr Purchases a/c 4600 Lyon company a/c 4600 (For purchase of merchandise) 2 03-Apr Freight Inwards A/c 300 Cash a/c 300 (As Inco terms are FOB, Shipping charges to be incurred) 3 04-Apr Lyon company a/c 600 Purchase return a/c 600 4 17-Apr Lyon company a/c 80 (4600-600)*2% Discount Received a/c 80 (Disc Accrued 4000*2%) 17-Apr Lyon company a/c 3920 (4600-600-80) Bank a/c 3920 (Being Cheque sent)_ 5 18-Apr Purchases a/c 8500 First Corp. a/c 8500 6 21-Apr First Corp. a/c 1100 Allowance Income a/c 1100 7 28-Apr First Corp. a/c 148 (8500-1100)*2% Discount Received a/c 148 28-Apr First Corp. a/c 7252 (8500-1100-148) Bank a/c 7252 (Being Cheque sent)_