Question

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 $3,200 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
		3		Paid $300 cash for shipping charges on the April 2 purchase.
		4		Returned to Lyon Company unacceptable merchandise that had an invoice price of $650.
		17		Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
		18		Purchased $5,700 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 $400 allowance toward the $5,700 owed on the April 18 purchase.
		28		Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Answer 1

Date	Accounts Title and explanation	Dr($)	Cr($)
Apr 2	Inventory	$     3,200
	Accounts payable—Lyon		$     3,200
	(To record goods purchased on account with 2/15, n60)
Apr 3	Inventory	$       300
	Cash		$       300
	(To record payment of shipent charges)
Apr 4	Accounts payable—Lyon	$       650
	Inventory		$       650
	(To record the goods returned of Apr 2 purchase)
Apr 17	Accounts payable—Lyon (3200-650)	$     2,550
	Inventory		$         51
	Cash (3200-650)*98%		$     2,499
	(To record payment on account of apr 2 purchase net of discount and return)
Apr 18	Inventory	$     5,700
	Accounts payable—Frist		$     5,700
	(To record goods purchased on account with 1/10, n30)
Apr 21	Accounts payable—Frist	$       400
	Inventory		$       400
	(To record allowance received on Apr 18 purchase)
Apr 28	Accounts payable—Frist (5700-400)	$     5,300
	Inventory		$         53
	Cash (5700-400) x 99%		$     5,247
	(To record payment on account of apr 18 purchase net of Allowance and discount)