Question

Problem 5-1A Preparing journal entries for merchandising activities--perpetual system P1 P2 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 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. Sold merchandise to Creek Co. for $900 under credit terms of 2/10,n/60, FOB shipping point, invoice dated July 2. 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. Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, POB destination, invoice dated 9 July 9. 11 Returned $200 of merchandise purchased on July 9 from Leight Co. and debited its account payable for that amount. Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. 12 Check July 12, Dr. Cash, $882 Paid the balance due to Boden Company within the discount period. 16 July 16. Cr. Cash, $5,940 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, 1/60, FOB shipping point, invoice 19 dated July 19. Gave a price reduction (allowance) of $100 to Art Co. for merchandise sold on July 19 and credited Art's accounts 21 receivable for that amount. Paid Leight Co the balance due, net of discount. 24 July 24, Cr. Cash $1,960 Received the balance due from Art Co. for the invoice dated July 19, net of discount 30 July 30, Dr. Cash, $1,078 Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10,n/60, FOB shipping point, 31 invoice dated July 31.

Answer 1

Date	General Journal					Debit	Credit
1-Jul	Merchandise inventory					6,000
	Accounts payable-Boden						6,000
2-Jul	Accounts receivable-Creek					900
	Sales						900
	cost of goods sold					500
	Merchandise inventory						500
3-Jul	Merchandise inventory					125
	cash						125
8-Jul	Cash					1,700
	sales						1,700
	cost of goods sold					1,300
	Merchandise inventory						1,300
9-Jul	Merchandise inventory					2,200
	Accounts payable-Leight co						2,200
11-Jul	Accounts payable-Leight co					200
	merchandise inventory						200
12-Jul	Cash					882
	Sales discount					18
	Accounts receivable-Creek						900
16-Jul	Accounts payable-Boden					6,000
	Merchandise inventory						60
	cash						5940
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					100
	Accounts receivable-Art co						100
24-Aug	Accounts payable-leight co					2,000
	Merchandise inventory						40
	Cash						1960
30-Jul	Cash					1078
	Sales discount					22
	Accounts receivable-Art co						1,100
31-Jul	Accounts recievable-Creek					7,000
	Sales						7,000
	Merchandise inventory					4,800
	Cost of goods sold						4,800