Question

Prepare journal entries to record the following merchandising transactions of Cabela's, which uses the perpetual inventory system a 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, POB shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $1,000 under credit terms of 2/10, n/60, POB shipping point, invoice dated July 2. The merchandise had cost $567. 3 Paid $125 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 $2,700 under credit terms of 2/15, n/60, TOB destination, invoice dated July 9. 11 Returned $700 of merchandise purchased on July 9 from Leight Co., and debited its account payable for that amount. 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, TOB shipping point, invoice dated July 19. 21 Gave a price reduction (allowance) of $250 to Art Co. for merchandise, sold on July 19, and credited Art's accounts receivable for that amount. 24 Paid Leight Co. the balance dus, 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 $7,300 under credit terms of 2/10, n/60, POB shipping point, invoice dated July 31. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 ..... 17 > < Prev 1 of 3 !! Next >

Answer 1

Answer: Credit Date July 1 Debit 6,800 6,800 July 2 1,000 1,000 July 2 567 567 July 3 125 July 8 2,500 2,500 July 8 2,100 2,100 July 9 2,700 2,700 July 11 700 July 12 980 20 Accounts Titles & Explanation Merchandise Inventory Accounts Payable-Boden Company Accounts Receivable-Creek Co. Sales Cost of Goods Sold Merchandise Inventory Merchandise Inventory Cash Cash Sales Cost of Goods Sold Merchandise Inventory Merchandise Inventory Accounts Payable-Leight Accounts Payable - Leight Merchandise Inventory Cash Sales Discount ($1,000 * 2%) Accounts Receivable-Creek Accounts Payable-Boden Merchandise Inventory($6,800 * 2%) Cash Accounts Receivable-Art Sales Cost of Goods Sold Merchandise Inventory Sales Returns and Allowances Accounts Receivable-Art Accounts Payable-Leight ($2,700 - $700) Merchandise Inventory [($2,700 - $700)*2%] Cash Cash Sales Discounts Accounts Receivable-Art ($1,500-$250) Accounts Receivbale-Creek Sales Cost of Goods Sold Merchandise Inventory 1,000 July 16 6,800 136 6,664 July 19 1,500 1,500 July 19 1,000 1,000 July 21 250 250 July 24 2,000 40 1,960 July 30 25 1,250 July 31 7,300 7,300 July 31 5,600 5,600