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 $950 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $508. 3 Paid $105 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 $2,700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. 11 Received a $700 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 $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. 21 Issued a $200 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 $4,900 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					6,100
	Accounts payable-Boden						6,100
2-Jul	Accounts receivable-Creek					950
	Sales						950
	cost of goods sold					508
	Merchandise inventory						508
3-Jul	Merchandise inventory					105
	cash						105
8-Jul	Cash					1,800
	sales						1,800
	cost of goods sold					1,400
	Merchandise inventory						1,400
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					931
	Sales discount					19
	Accounts receivable-Creek						950
16-Jul	Accounts payable-Boden					6,100
	Merchandise inventory						122
	cash						5978
19-Jul	Accounts receivable-Art co					1,200
	Sales						1,200
	Cost of goods sold					800
	Merchandise inventoy						800
21-Jul	Sales return and allowance					200
	Accounts receivable-Art co						100
24-Aug	Accounts payable-leight co					2,000
	Merchandise inventory						40
	Cash						1960
30-Jul	Cash					980
	Sales discount					20
	Accounts receivable-Art co						1,000
31-Jul	Accounts recievable-Creek					7,400
	Sales						7,400
	Merchandise inventory					4,900
	Cost of goods sold						4,900