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 wil 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 $6.900 under credit terms of 2/15, 5/30, POS shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $1,000 under credit terms of 2/10, 1/60, TOS shipping point, invoice dated July 2. The merchandise had cost $575. 3 Paid $105 cash for freight charges on the purchase of July 1. 8 Sold merchandise that had cost $2,200 for $2,600 cash. 9 Purchased merchandise from Leight Co. for $2.400 under credit terms of 2/15 n/60, FOB destination, Invoice dated July 9. 11 Returned $400 of merchandise purchased on July 9 from Leight Co. and debited ta 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 $800 to Art Co. for $1.200 under credit terms of 2/15, 1/60, POS shipping point, invoice dated July 19. 21 Gave a price reduction (allowance) of $200 to Art Co. for merchandise bold on July 19 and credited it's accounts receivable for that amount. 24 Pald 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 $5,700 to Creek Co. for $7,200 under credit terma 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 > Purchased merchandise from Boden Company for $6,900 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1. Note: Enter debits before credits. Date General Journal July 01 Debit Credit Record entry Clear entry View general journal

Answer 1

Journal Entries:

No	Date	Account title and explanation	Debit	Credit
1	Jul 01	Merchandise inventory	6,900
		Accounts payable-Boden		6,900
		[To record purchases on account]
2	Jul 02	Accounts receivable-Creek	1,000
		Sales		1,000
		[To record Sales on account]
3	Jul 02	Cost of goods sold	575
		Merchandise inventory		575
		[To record cost of goods sold]
4	Jul 03	Merchandise inventory	105
		Cash		105
		[To record cash paid for freight]
5	Jul 08	Cash	2,600
		Sales		2,600
		[To record cash sales]
6	Jul 08	Cost of goods sold	2,200
		Merchandise inventory		2,200
		[To record cost of goods sold]
7	Jul 09	Merchandise inventory	2,400
		Accounts payable-Leight		2,400
		[To record purchase of inventory on account]
8	Jul 11	Accounts payable-Leight	400
		Merchandise inventory		400
		[To record purchase returns]
9	Jul 12	Cash	980
		Sales discount [1,000 x 2%]	20
		Accounts receivable-Creek		1,000
		[To record cash collected from customers]
10	Jul 16	Accounts receivable	6,900
		Cash		6,762
		Merchandise inventory [6,900 x 2%]		138
		[To record payment for accounts payable]
11	Jul 19	Accounts receivable-Art	1,200
		Sales		1,200
		[To record sales on account]
12	Jul 19	Cost of goods sold	800
		Sales		800
		[To record cost of goods sold]
13	Jul 21	Sales returns and allowance	200
		Accounts receivable-Art		200
		[To record allowance given]
14	Jul 24	Accounts payable-Leight [2,400-400]	2,000
		Cash		1,960
		Merchandise inventory [2,000 x 2%]		40
		[To record payment for accounts payable]
15	Jul 30	Cash	980
		Sales Discount [1,000 x 2%]	20
		Accounts receivable-Art [1,200-200 allowance]		1,000
		[To record collection from customers]
16	Jul 31	Accounts receivable-Creek	7,200
		Sales		7,200
		[To record sales on account]
17	Jul 31	Cost of goods sold	5,700
		Merchandise inventory		5,700
		[To record cost of goods sold]