**Journal Entries for Merchandising Transactions of Lowe's**Lowe's utilizes the perpetual inventory system and the gross method for recording merchandising transactions. Below are the journal entries for the specified transactions during the month of August:**August 1**- Purchased merchandise from Aron Company: - Amount: $7,500 - Credit terms: 1/10, n/30, FOB destination - Invoice dated: August 1 - Journal Entry: ``` Merchandise Inventory 7,500 Accounts Payable - Aron Company 7,500 ```**August 5**- Sold merchandise to Baird Corporation: - Sales Amount: $5,200 - Credit terms: 2/10, n/60, FOB destination - Invoice dated: August 5 - Cost of Goods Sold: $4,000 - Journal Entries: ``` Accounts Receivable - Baird Corporation 5,200 Sales Revenue 5,200 Cost of Goods Sold 4,000 Merchandise Inventory 4,000 ```**August 8**- Purchased merchandise from Waters Corporation: - Amount: $5,400 - Credit terms: 1/10, n/45, FOB shipping point - Invoice dated: August 8 - Journal Entry: ``` Merchandise Inventory 5,400 Accounts Payable - Waters Corporation 5,400 ```**August 9**- Paid cash for shipping charges: - Amount: $125 - Related to the August 5 sale to Baird Corporation - Journal Entry: ``` Delivery Expense 125 Cash 125 ```**August 10**- Baird returned merchandise from August 5 sale: - Cost to Lowe's: $400 - Sold for: $600 - Merchandise restored to inventory - Journal Entries: ``` Sales Returns and Allowances 600 Accounts Receivable - Baird Corporation 600 Merchandise Inventory 400 Cost of Goods Sold 400 ```**August 12**- Price reduction received from Waters Corporation for the August 8 purchase: - Amount: $400 - Journal Entry: ``` Accounts Payable - Waters ## Journal Entry Worksheet for Educational PurposesThis worksheet demonstrates the process of recording various financial transactions through general journal entries. Each section details a specific transaction, its date, and the debits and credits involved. ### August 19**Transaction:** Record cost of merchandise sold, $2,400.- **Date:** Aug 19- **General Journal:** - Debit: [Placeholder for entry] - Credit: [Placeholder for entry]### August 22**Transaction:** 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.- **Date:** Aug 22- **General Journal:** - Debit: [Placeholder for entry] - Credit: [Placeholder for entry]### August 29**Transaction:** Received Tux’s cash payment for the amount due from the August 19 sale less the price allowance from August 22.- **Date:** Aug 29- **General Journal:** - Debit: [Placeholder for entry] - Credit: [Placeholder for entry]### August 30**Transaction:** Paid Aron Company the amount due from the August 1 purchase.- **Date:** Aug 30- **General Journal:** - Debit: [Placeholder for entry] - Credit: [Placeholder for entry]### Notes- **Entries:** Make sure to enter debits before credits.- This worksheet helps accounting students understand how to record transactions correctly in a general journal by specifying the date, transaction details, and the corresponding debit and credit entries.Use this worksheet as a guide to practice and verify your journal entries, ensuring accuracy in financial record-keeping.

Name: **Journal Entries for Merchandising Transactions of Lowe's**Lowe's ut
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Description: **Journal Entries for Merchandising Transactions of Lowe's**Lowe's utilizes the perpetual inventory system and the gross method for recording merchandising transactions. Below are the journal entries for the specified transactions during the month o

Perpetual inventory system is a method of inventory where the inventory and cost of goods sold is…

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Accounting

Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. 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." 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. 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. August 15 Received balance due from Baird Corporation for 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 n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400. August 22 August 9 August 10 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe's gave 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.