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 $6,000 under credit terms of 1/15, 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 $500. 3 Paid $125 cash for freight charges on the purchase of July 1. 8 Sold merchandise that had cost $1,300 for $1,700 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 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 $100 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 $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Answer 1

PERPETUAL
Date	General Journal	Debit	Credit
Jul-01	Merchandise inventory	6,000
	Accounts payable—Boden		6,000
Jul-02	Accounts receivable—Creek	900
	Sales		900
Jul-02	Cost of goods sold	500
	Merchandise inventory		500
Jul-03	Merchandise inventory	125
	Cash		125
Jul-08	Cash	1,700
	Sales		1,700
Jul-08	Cost of goods sold	1,300
	Merchandise inventory		1,300
Jul-09	Merchandise inventory	2,200
	Accounts payable—Leight		2,200
Jul-11	Accounts payable—Leight	200
	Merchandise inventory		200
Jul-12	Cash	882
	Sales discounts(900*2%)	18
	Accounts receivable—Creek		900
Jul-16	Accounts payable—Boden	6,000
	Merchandise inventory(6000*1%)		60
	Cash		5,940
Jul-19	Accounts receivable—Art	1,200
	Sales		1,200
Jul-19	Cost of goods sold	800
	Merchandise inventory		800
Jul-21	Sales returns and allowances	100
	Accounts receivable—Art		100
Jul-24	Accounts payable—Leight	2,000
	Merchandise inventory(2000*2%)		40
	Cash		1,960
Jul-30	Cash	1,078
	Sales discounts(1100*2%)	22
	Accounts receivable—Art		1,100
Jul-31	Accounts receivable—Creek	7,000
	Sales		7,000
Jul-31	Cost of goods sold	4,800
	Merchandise inventory		4,800