Question

Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4.600 price. invoicedated April 2. credit terms of 2/15, N60. and F08 shipping point.3 Paid $300 for shipping charges on the April 2 purchase.4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $600.17 Sent 3 check to Lyon Company for the April 2 purchase, net of the discount and the returnedmerchandise.18 Purchased merchandise from Frist Corp. under the following terms: $8.500 price. invoice datedApril 18, credit terms of 2110, n/30, and F08 destination.21 Alter negotiations, received from Fn'st 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.Prepare journal entries to record the above transactions for a retail store. Assume a perpetual inventorysystem.

Answer 1

Lyon Purchase journal entries

merchadise 4600 debit

accounts payable 4600 credit

merchandise 300 debit

cash 300 credit

account payable 600 debit

merchandise 600 credit

accounts payable 4000 debit

merchandise 80 credit

Cash 3920 credit

First Purchase journal entries

merchadise 8500 debit

accounts payable 8500 credit

accounts payable 1100 debit

merchandise 1100

accounts payable 7400 debit

merchandise 148 credit

Cash 7252 credit

Step-by-step explanation:

Lyon company:

the freight are a cost necessary to acquire the merchandise thus, it is considered merchandise

the return decrease our payable and merchandise amount

net balance: 4,600 - 600 = 4,000

discount 4,000 x 2% = 80

cash outlay 4,000 - 80 = 3,920

First Company:

the allowance decrease both, the amount due and the merchandise value

The net amount is:

8,500 - 1,100 = 7,400

discount 7,400 x 2% = 148

cash outlay: 7,400 - 148 = 7,252