Question

Aug.	1	Purchased merchandise from Arotek Company for $7,100 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.
	5	Sold merchandise to Laird Corp. for $4,970 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,549.
	8	Purchased merchandise from Waters Corporation for $6,400 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. The invoice showed that at Sheng’s request, Waters paid the $240 shipping charges and added that amount to the bill. (Hint: Discounts are not applied to freight and shipping charges.)
	9	Paid $300 cash for shipping charges related to the August 5 sale to Laird Corp.
	10	Laird returned merchandise from the August 5 sale that had cost Sheng $591 and been sold for $828. The merchandise was restored to inventory.
	12	After negotiations with Waters Corporation concerning problems with the merchandise purchased on August 8, Sheng received a credit memorandum from Waters granting a price reduction of $966.
	14	At Arotek's request, Sheng paid $400 cash for freight charges on the August 1 purchase, reducing the amount owed to Arotek.
	15	Received balance due from Laird Corp. for the August 5 sale less the return on August 10.
	18	Paid the amount due Waters Corporation for the August 8 purchase less the price reduction granted.
	19	Sold merchandise to Tux Co. for $4,260 under credit terms of 1/10, n/30, FOB shipping point, invoice dated August 19. The merchandise had cost $2,956.
	22	Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Sheng sent Tux a $710 credit memorandum to resolve the issue.
	29	Received Tux's cash payment for the amount due from the August 19 sale.
	30	Paid Arotek Company the amount due from the August 1 purchase.

   

Prepare journal entries to record the above merchandising transactions of Sheng Company, which applies the perpetual inventory system.

Find the general journal entries to August 18, 19, 22, 29, and 30.

Thank you ,,

Answer 1

		DR	CR
Aug-01	Merchandise inventory	7100
	Accounts payable—Arotek		7100.
Aug 05	Accounts receivable—Laird	4970.
	Sales		4970
Aug-05	Cost of goods sold	3549.
	Merchandise inventory		3549.
	. _
Aug-08	Merchandise inventory	6640.
	Accounts payable—Waters		6640.
Aug-09	Delivery expense	300
	Cash		300
Aug-10	Sales returns and allowances	828
	Accounts receivable—Laird		828.
Aug-10	Merchandise inventory	591
	Cost of goods sold		591
Aug-12	Accounts payable—Waters	966
	Merchandise inventory		966.
	Accounts payable—Arotek	250
	Cash		250.
Aug-15	Cash	4059
	Sales discounts	83
	Accounts receivable—Laird		4142.
Aug-18	Accounts payable—Waters	5,674
	Cash		5617
	Merchandise inventory		57
Aug-19	Accounts receivable—Tux	4260.
	Sales		4260.
Aug-19	Merchandise inventory	2956
	Cost of goods sold		2956
Aug-22	Sales returns and allowances	710
	Accounts receivable—Tux		710
Aug-29	Cash	2224
	Sales discounts	22
	Accounts receivable—Tux		2246
Aug-30	Accounts payable—Arotek	6850
	Cash		6850