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 $6,400 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 $533. 3 Paid $115 cash for freight charges on the purchase of July 1. 8 Sold merchandise that had cost $1,700 for $2,100 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 Received a $900 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 $5,200 to Creek Co. for $6,800 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					6,400
	Accounts payable-Boden						6,400
2-Jul	Accounts receivable-Creek					1,000
	Sales						1,000
	cost of goods sold					533
	Merchandise inventory						533
3-Jul	Merchandise inventory					115
	cash						115
8-Jul	Cash					2,100
	sales						2,100
	cost of goods sold					1,700
	Merchandise inventory						1,700
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					6,400
	Merchandise inventory						128
	cash						6272
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						200
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					6,800
	Sales						6,800
	Merchandise inventory					5,200
	Cost of goods sold						5,200