Question 1: Fill in each journal entry for each date.
Apr. 2 Purchased merchandise from Lyon Company under the following terms: $6,200 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point.
3 Paid $347 for shipping charges on the April 2 purchase.
4 Returned 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: $12,850 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination.
21 After negotiations, received from Frist a $3,598 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 inventory system.
Question 2: Fill in each journal entry for each date.
Apr. 2 Purchased merchandise from Lyon Company under the following terms: $5,900 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point.
3 Paid $330 for shipping charges on the April 2 purchase.
4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $550.
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: $12,250 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination.
21 After negotiations, received from Frist a $3,430 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 inventory system.
Question 3: Fill in each journal entry for each date.
Allied Parts was organized on May 1, 2015, and made its first purchase of merchandise on May 3. The purchase was for 1,900 units at a price of $12 per unit. On May 5, Allied Parts sold 1,140 of the units for $16 per unit to Baker Co. Terms of the sale were 2/10, n/60.
a. On May 7, Baker returns 399 units because they did not fit the customer's needs. Allied Parts restores the units to its inventory.
b. On May 8, Baker discovers that 95 units are damaged but are still of some use and, therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $760 to compensate for the damage.
c. On May 15, Baker discovers that 114 units are the wrong color. Baker keeps 68 of these units because Allied Parts sends a $134 credit memorandum to compensate. Baker returns the remaining 46 units to Allied Parts. Allied Parts restores the 46 returned units to its inventory.
Prepare entries for Allied Parts to record the May 5 sale and each of the above separate transactions using a perpetual inventory system.