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 $6,100 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 $508.
		3		Paid $130 cash for freight charges on the purchase of July 1.
		8		Sold merchandise that had cost $1,400 for $1,800 cash.
		9		Purchased merchandise from Leight Co. for $2,900 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
		11		Returned $900 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 $1,000 to Art Co. for $1,500 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
		21		Gave a price reduction (allowance) of $250 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 $4,900 to Creek Co. for $7,100 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					6,100
	Accounts payable-Boden						6,100
2-Jul	Accounts receivable-Creek					1,000
	Sales						1,000
	cost of goods sold					508
	Merchandise inventory						508
3-Jul	Merchandise inventory					130
	cash						130
8-Jul	Cash					1,800
	sales						1,800
	cost of goods sold					1,400
	Merchandise inventory						1,400
9-Jul	Merchandise inventory					2,900
	Accounts payable-Leight co						2,900
11-Jul	Accounts payable-Leight co					900
	merchandise inventory						900
12-Jul	Cash					980
	Sales discount					20
	Accounts receivable-Creek						1,000
16-Jul	Accounts payable-Boden					6,100
	Merchandise inventory						122
	cash						5978
19-Jul	Accounts receivable-Art co					1,500
	Sales						1,500
	Cost of goods sold					1,000
	Merchandise inventoy						1,000
21-Jul	Sales return and allowance					250
	Accounts receivable-Art co						250
24-Aug	Accounts payable-leight co					2,000
	Merchandise inventory						40
	Cash						1960
30-Jul	Cash					1225
	Sales discount					25
	Accounts receivable-Art co						1,250
31-Jul	Accounts recievable-Creek					7,100
	Sales						7,100
	Merchandise inventory					4,900
	Cost of goods sold						4,900