August 1 Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. August 5 Sold merchandise to Baird Corporation for $5,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000. August 8 Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. Paid $125 cash for shipping charges related to the August 5 sale to Baird Corporation. Baird returned merchandise from the August 5 sale that had cost Lowe's $400 and was sold for $600. The merchandise was restored to inventory. After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of $400 off the $5,400 of goods purchased. Lowe's debited accounts payable for $400. August 9 August 10 August 12 August 14 August 15 August 18 August 19 August 22 At Aron's request, Lowe's paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron. Received balance due from Baird Corporation for the August 5 sale less the return on August 10. Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Sold merchandise to Tux Company for $4,800 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400. Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's gave a price reduction (allowance) of $500 to Tux and credited Tux's accounts receivable for that amount. August 29 Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. August 30 Paid Aron Company the amount due from the August 1 purchase.
August 1 Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. August 5 Sold merchandise to Baird Corporation for $5,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000. August 8 Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. Paid $125 cash for shipping charges related to the August 5 sale to Baird Corporation. Baird returned merchandise from the August 5 sale that had cost Lowe's $400 and was sold for $600. The merchandise was restored to inventory. After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of $400 off the $5,400 of goods purchased. Lowe's debited accounts payable for $400. August 9 August 10 August 12 August 14 August 15 August 18 August 19 August 22 At Aron's request, Lowe's paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron. Received balance due from Baird Corporation for the August 5 sale less the return on August 10. Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. Sold merchandise to Tux Company for $4,800 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400. Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's gave a price reduction (allowance) of $500 to Tux and credited Tux's accounts receivable for that amount. August 29 Received Tux's cash payment for the amount due from the August 19 sale less the price allowance from August 22. August 30 Paid Aron Company the amount due from the August 1 purchase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:### Transaction Record Overview
**August 1**
- Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination. Invoice dated August 1.
**August 5**
- Sold merchandise to Baird Corporation for $5,200 under credit terms of 2/10, n/60, FOB destination. Invoice dated August 5. The merchandise had cost $4,000.
**August 8**
- Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB shipping point. Invoice dated August 8.
**August 9**
- Paid $125 cash for shipping charges on the August 5 sale to Baird Corporation.
**August 10**
- Baird returned merchandise from the August 5 sale that was sold for $600. The merchandise was restored to inventory.
**August 12**
- After negotiations with Waters Corporation regarding problems with the purchases on August 8, Lowe’s received a price reduction from Waters of $400 off goods purchased. Lowe’s debited accounts payable for $400.
**August 14**
- At Aron's request, Lowe's paid Aron $7,410 owed (accounts payable) to Aron.
**August 15**
- Received balance due from Baird on the August 5 sale less the return on August 10.
**August 18**
- Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12.
**August 19**
- Sold merchandise to Tux Company for $4,800 under credit terms of 1/10, FOB shipping point. Invoice dated August 19. The merchandise had cost $3,100.
**August 22**
- Tux requested a price reduction of $500 because the merchandise did not meet specifications. Lowe’s gave a price reduction (allowance) of $500 to Tux and credited Tux’s accounts receivable for that amount.
**August 29**
- Received Tux’s cash payment for the amount due from the August 19 sale less the price allowance from August 22.
**August 30**
- Paid Aron Company the amount due from the August 1 purchase.
### Journal Entry Worksheet
#### Entry #1 - August 01
- **Transaction Detail**: Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10
Transcribed Image Text:**Journal Entries for Selected Transactions**
**1. August 10: Record the merchandise cost, $400, that was restored to inventory.**
*Note: Enter debits before credits.*
| Date | General Journal | Debit | Credit |
|----------|-------------------------|-------|--------|
| Aug 10 | | | |
| | | | |
**2. August 12: After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe’s received a price reduction from Waters of $400 off the $5,400 of goods purchased. Lowe’s debited accounts payable for $400.**
*Note: Enter debits before credits.*
| Date | General Journal | Debit | Credit |
|----------|-------------------------|-------|--------|
| Aug 12 | | | |
| | | | |
**3. August 14: At Aron’s request, Lowe’s paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron.**
*Note: Enter debits before credits.*
| Date | General Journal | Debit | Credit |
|----------|-------------------------|-------|--------|
| Aug 14 | | | |
| | | | |
**4. August 15: Received balance due from Baird Corporation for the August 5 sale less the return on August 10.**
*Note: Enter debits before credits.*
| Date | General Journal | Debit | Credit |
|----------|-------------------------|-------|--------|
| Aug 15 | | | |
| | | | |
**5. August 18: Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12.**
*Note: Enter debits before credits.*
| Date | General Journal | Debit | Credit |
|----------|-------------------------|-------|--------|
| Aug 18 | | | |
| | | | |
**6. August 19: Sold merchandise to Tux Company for $4,800 under credit terms of n/10, FOB shipping point, invoice dated August 19.**
*Note: Enter debits before credits.*
| Date | General Journal | Debit | Credit |
|
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