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 $6,800 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1.
		2		Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $567.
		3		Paid $140 cash for freight charges on the purchase of July 1.
		8		Sold merchandise that had cost $2,100 for $2,500 cash.
		9		Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
		11		Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9.
		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		Issued a $250 credit memorandum to Art Co. for an allowance on goods sold on July 19.
		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 $5,600 to Creek Co. for $7,100 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

  

Answer 1

Ched pate July Debit $ 6800 ACCOUnt name 1 merchandise Inventory TO ACCounts payable - Boden 6800 - creek co $ 900 Account Receivable TO sales $ 900 $ 567 cost of Good sold To merchandise Inventory $ 567 meochandise Invento34 To cash cash to soles $ 2500 $ 2500 cost of Good sold 10 meochondise Invento $ 2100 $ 2100 merchandise Inventory TO Accounts payable - Leight co. 2200 $ 2200 Accounts payable - Leight co. TO merchandise Inventory $ 200 $ 200 +2 cash (900x98%) sales Discount (900x2%) TO Account Receivable $ 882 I 18 s -creek co & 900 Accounts Payoble - Boden & 6800 To merchandise Inventory (6700x77) $ 136 to cash C 6800X 2%) 6664

Date Account Name Account Receivable - Astco. To sales pebit caedit & Isoo $ 1500 19. cost of Good sola TO merchandise Inventory $ 1000 $ 1000 21. $ 250 sales retum & Allowance TO ACcount Receivable - Astco. $ 250 24. Accounts payable - Leight co. (2200- 200) to merchandise Inventory (2000x 2% I TO cash [ 2000x 987] $2000 s 40 s 1960 30. cash IS 1225 $25 sales Discount ( 1250 X 2%) TO Account Receivable costcol (1500-250) 1250 7100 $ 5600 Account Receivable - creek co, To sales 360o $ 5600 cost of Good sold To merchandise Inventory $ 5600