Problem 5-2A Preparing journal entries for
merchandising activities-perpetual system LO P1, P2
Aug.1Purchased merchandise from Arotek Company for $7,300 under credit
terms of 1/10, n/30, FOB destination, invoice dated August 1.
4At Arotek's request, Sheng paid $270 cash for freight charges on the
August 1 purchase, reducing the amount owed to Arotek.
5Sold merchandise to Laird Corp. for $5,110 under credit terms of 2/10,
n/60, FOB destination, invoice dated August 5. The merchandise had cost
$3,649.
8Purchased merchandise from Waters Corporation for $6,600 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.)
9Paid $110 cash for shipping charges related to the August 5 sale to Lux
Corp.
10Laird returned merchandise from the August 5 sale that had cost Sheng
$608 and been sold for $852. The merchandise was restored to inventory.
12After 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 $997.
15Received balance due from Laird Corp. for the August 5 sale less the
return on August 10.
18Paid the amount due to Waters Corporation for the August 8 purchase
less the price reduction granted.
19Sold merchandise to Tux Co. for $4,380 under credit terms of 1/10,
n/30, FOB shipping point, invoice dated August 19. The merchandise had
cost $3,040.
22Tux requested a price reduction on the August 19 sale because the
merchandise did not meet specifications. Sheng sent Tux a $730 credit
memorandum to resolve the issue.
29Received Tux's cash payment for the amount due from the August 19
sale.
30Paid 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.
- Assignment status: Resolved by our Writing Team
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