Exercise 5-3 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 $6,800 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $360 cash 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 $12,900 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 $12,900 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase; net of the allowance and the discount.

Exercise 5-3 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 $6,800 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $360 cash 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 $12,900 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 $12,900 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase; net of the allowance and the discount.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Ff.115.

Exercise 5-3 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 $6,800 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and
FOB shipping point.
3 Paid $360 cash 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 $12,900 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 $12,900 owed on the April 18 purchase.
28 Sent check to Frist paying for the April 18 purchase; net of the allowance and the discount.
A
View transaction list
Journal entry worksheet
1
2
3 4 5 6
Date
Apr 02
Purchased $6,800 of merchandise from Lyon Company with credit terms of
2/15, n/60, invoice dated April 2, and FOB shipping point.
Note: Enter debits before credits.
7
General Journal
Debit Credit

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