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Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. Hint: It will help to identify each receivable and payable; for example, record the purchase on August $1$ in Accounts Payable$-$Aron.

Aug. $1$ Purchased merchandise from Aron Company for $$7,500$ under credit terms of $\frac{1}{10},\frac{n}{30},$ FOB destination, invoice dated August $1.$

$5$ Sold merchandise to Baird Corp. for $$5,200$ under credit terms of $\frac{2}{10},\frac{n}{60},$ FOB destination, invoice dated August $5.$ The merchandise had cost $$4,000.$

$8$ Purchased merchandise from Waters Corporation for $$5,400$ under credit terms of $\frac{1}{10},\frac{n}{45},$ FOB shipping point, invoice dated August $8.$

$9$ Paid $$125$ cash for shipping charges related to the August $5$ sale to Baird Corp.

$10$ 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.

$12$ 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.$

$14$ 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.

$15$ Received balance due from Baird 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 allowance from August $12.$

$19$ Sold merchandise to Tux Co$.$ for $$4,800$ under credit terms of $\frac{n}{10},$ FOB shipping point, invoice dated August $19.$ The merchandise had cost $$2,400.$

$22$ 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.

$30$ Paid Aron Company the amount due from the August $1$ purchase.

Journal entry worksheet

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