Question

Prepare journal entries to record the following merchandising transactions of Cabela’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 July 1 in Accounts Payable—Boden. July 1 Purchased merchandise from Boden Company for $6,300 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $1,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $525. 3 Paid $135 cash for freight charges on the purchase of July 1. 8 Sold merchandise that had cost $1,600 for $2,000 cash. 9 Purchased merchandise from Leight Co. for $2,700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. 11 Returned $700 of merchandise purchased on July 9 from Leight Co., and debited its account payable for that amount. 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. 16 Paid the balance due to Boden Company within the discount period. 19 Sold merchandise that cost $1,200 to Art Co. for $1,800 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. 21 Gave a price reduction (allowance) of $300 to Art Co. for merchandise sold on July 19, and credited Art's accounts receivable for that amount. 24 Paid Leight Co. the balance due, net of discount. 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount. 31 Sold merchandise that cost $5,100 to Creek Co. for $7,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Answer 1

Date	General Journal					Debit	Credit
1-Jul	Merchandise inventory					6,300
	Accounts payable-Boden						6,300
2-Jul	Accounts receivable-Creek					1,000
	Sales						1,000
	cost of goods sold					525
	Merchandise inventory						525
3-Jul	Merchandise inventory					135
	cash						135
8-Jul	Cash					2,000
	sales						2,000
	cost of goods sold					1,600
	Merchandise inventory						1,600
9-Jul	Merchandise inventory					2,700
	Accounts payable-Leight co						2,700
11-Jul	Accounts payable-Leight co					700
	merchandise inventory						700
12-Jul	Cash					980
	Sales discount					20
	Accounts receivable-Creek						1,000
16-Jul	Accounts payable-Boden					6,300
	Merchandise inventory						126
	cash						6174
19-Jul	Accounts receivable-Art co					1,800
	Sales						1,800
	Cost of goods sold					1,200
	Merchandise inventoy						1,200
21-Jul	Sales return and allowance					300
	Accounts receivable-Art co						300
24-Aug	Accounts payable-leight co					2,000
	Merchandise inventory						40
	Cash						1960
30-Jul	Cash					1470
	Sales discount					30
	Accounts receivable-Art co						1,500
31-Jul	Accounts recievable-Creek					7,400
	Sales						7,400
	Merchandise inventory					5,100
	Cost of goods sold						5,100