Question

what did i do wrong?

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, 1/30, FOB shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $950 under credit terms of 2/10, 1/60) FOB shipping point invoice dated July 2. The merchandise had cost $533 3 Paid $125 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 $2,800 under credit terms of 2/15, 1/60, FOB destination, invoice dated July 9 11 Returned $100 of merchandise purchased on July ofron 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 10 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, 1/60) FOB ship ng point, invoice dated July 19. 21 Gave a price reduction (allowance) of $200 to Art Co. for merchandise sold on July 19 and credited Art's accounts receivable for that amount 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 $7.300 under credit terns of 2/10, n/60, FOB shipping point, invoice dated July 31. Answer is not complete. No Debit Credit Date July 01 1 General Journal Merchandise inventory Accounts payable--Boden 6.100 6,400 2 July 02 Accounts receivable Creek 950 < Prey 8 of 15 Next >

Answer 1

Account recceivable - Art balance as on July 30 = $1200 - $200 = $1000 (less price reduction allowance).

Since amount received from Art co., with in 15 days, as per credit term 2/15, n/30 a 2% discount is allowed on amount receivable. i.e., 2% on $1000 = $20. therefore net cash received = $1000 - $20 = $980.

Jouranla entry on July 30 for amount received from Art co.,

Cash A/c Dr $980

Sales Discount A/c Dr $20

To Accounts Receivable $1000.

Note : Please comment down for any further clarifications.