Fundamental Accounting Principles 21st Ed. Chapter 5 Connect Problems

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1. The operating cycle of a merchandising company contains the following five activites. With merchandise acquisition as the starting point, arrange the events in the correct order. a. Inventory made available for sale 2 b. Cash collections from customers 5 c. Credit sales to customers 3 d. Purchases of merchandise 1 e. Accounts receivable accounted for 4 2. Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4,600 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point. 3 Paid $300 for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $600. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased merchandise from Frist Corp. under the following terms: $8,500 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination. 21 After negotiations, received from Frist a $1,100 allowance on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the discount and allowance. Prepare journal entries to record the above transactions for a retail store. Assume a perpetual inventory system.
Apr 28: Paid balance (less 2%) within discount period = $148 = ($8,500 − $1,100) × 2% 3.

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