Aug. 1 Purchased merchandise from Abilene Company for $7,300 under credit terms

Question

Aug. 1 Purchased merchandise from Abilene Company for $7,300 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1 4 At Abilene's request, Stone paid $180 cash for freight charges on the August 1 purchase, reducing the amount owed to Abilene. 5 Sold merchandise to Lux Corp. for $5,110 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,649. 8 Purchased merchandise from Welch Corporation for $6,600 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. The invoice showed that at Stone's request, Welch paid the $240 shipping charges and added that amount to the bill. (Hint: Discounts are not applied to freight and shipping charges.) 9 Paid $210 cash for shipping charges related to the August 5 sale to Lux Corp. 10 Lux returned merchandise from the August 5 sale that had cost Stone $608 and been sold for $852. The merchandise was restored to inventory. 12 After negotiations with Welch Corporation concerning problems with the merchandise purchased on August 8, Stone received a credit memorandum from Welch granting a price of $997 15 Received balance due from Lux Corp. for the August 5 sale less the return on gust 10 18 Paid the amount due to Welch Corporation for the August 8 purchase less 19 Sold merchandise to Trax Co. for $4,380 under credit terms of 1/10, n/30, FOB shipping point, invoice reduction granted. dated August 19. The merchandise had cost $3,040 22 Trax requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Stone sent Trax a $730 credit memorandum to resolve the issue. 29 Received Trax's cash payment for the amount due from the August 19 sale. 30 Paid Abilene Company the amount due from the August 1 purchase. Prepare journal entries to record the above merchandising transactions of Stone Company, which applies the perpetual inventory system. (Identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable- Abilene.) (Round your answer to nearest dollar amount. Omit the "$" sign in your response. General Journal Aug. 1 (Click to select) (Click to select) 4 (Click to select) (Click to select) 5 (Click to select) Click to select) (Click to select) (Click to select) 8 (Click to select) (Click to select) MacBook Pro

Explanation / Answer

Amount in $ Date Account title & Explanation Debit Credit Aug-01 Mechandise Inventory 7300 Abilene Company 7300 To record the purchase of inventory Aug-04 Abilene Company 190 Cash 190 To record the freight receivable Aug-01 inventory purchase. Aug-05 Lux Corp. 5110 Revenue from sales 5110 Cost of goods sold 3649 Merchandise Inventory 3649 To record the sale of merchandise inventory Aug-08 Merchandise Inventory 6600 Freight In 240 Welch corporation 6840 To record the purchase of Inventory Aug-09 Freight Out 210 Cash 210 To record the freight on sales Aug-10 Sales Returns 852 Lux Corp. 852 Merchandise Inventory 608 Cost of goods sold 608 To record the return of inventory sold Aug-12 Welch corporation 997 Purchase allowance 997 To record the purchase allowance Aug-15 Cash 4172.84 Sales Discount 85.16 Lux Corp. 4258 To recordthe collection from customer Aug-18 Welch corporation 5843 Cash 5786.97 Purchase Discount 56.03 Aug-19 Trax Co. 4380 Revenue from sales 4380 Cost of goods sold 3040 Merchandise Inventory 3040 To record the sale of merchandise inventory Aug-22 Sales Allowance 730 Trax Co. 730 To record the sales allowance Aug-29 Cash 3613.5 Sales Discount 36.5 Trax Co. 3650 To record the collection from customer Aug-30 Abilene Company 7110 Cash 7110 To record payment to supplier

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