Question

2W Prepure journal entries perpetual inventory system able; for example, record July | Purchased mer 2 Sold merchandis entries to record the following merchandising transactions of Cabela's, which uses the ory system and the gross method. (Hint: It will help to identify each receivable and pay- PROBLEM SET A ample, record the purchase on July 1 in Accounts Payable-Boden.) chased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30. Problem 4-1A Preparing journal entries FOB shipping point, invoice dated July 1. old merchandise to Creek Co, for $900 under credit terms of 2/10,n/60, FOB shipping point, for merchandising activities-perpetual invoice dated July 2. The merchandise had cost $500. system Paid $125 cash for freight charges on the purchase of July 1. P1 P2 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, 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 9. 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. Check July 12. Dr. Cash, 16 Paid the balance due to Boden Company within the discount period. $882 19 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB July 16. C. Cash $5.940 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. July 24, Cr Cash 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount. $1.960 July 30. Dr. Cash 31 Sold merchandise that cost $4,800 to Creek Co. for $7.000 under credit terms of 2/10, n/60, $1,078 FOB shipping point, invoice dated July 31.

Answer 1

Solution of the above problem is as under:

Statement showing Journal Entries to record the merchandising transactions of Cabela's
Date	Particulars	Debit ($)	Credit ($)
Jul-01	Purchases A/c Dr.	6000
	To Accounts Payable-Bodem Co.		6000
	(Being merchandise purchased from Bodem Co on credit amounting to $6000)
Jul-02	Accounts Receivable-Creek Co. A/c Dr.	900
	To Sales A/c		900
	(Being merchandise sold to Creek Co on credit amounting to $ 900)
Jul-03	Freight Charges A/c Dr.	125
	To Cash A/c		125
	(Being freight paid in cash amounting to $ 125)
Jul-08	Cash A/c Dr.	1700
	To Sales A/c		1700
	(Being merchandise sold amounting to $ 1700)
Jul-09	Purchases A/c Dr.	2200
	To Accounts Payable-Leight Co.		2200
	(Being merchandise purchased from Leight Co. on credit amounting to $ 2200)
Jul-11	Accounts Payable-Leight Co. A/c Dr.	200
	To Purchases Return A/c		200
	(Being purchases return from Leight Co. recorded amounting to $ 200)
Jul-12	Cash A/c Dr.	882
	Discount A/c Dr.	18
	To Account Receivable-Creek Co.		900
	(Being amount received from Creek Co within the dicount period 2/10)
Jul-16	Accounts Payable-Boden Co A/c Dr.	6000
	To Cash A/c		5940
	To Discount Received A/c		60
	(Being payment made to Boden Co within the discounting period)
Jul-19	Account Receivable-Art Co A/c Dr.	1200
	To Sales		1200
	(Being Merchandise sold on credit to Art Co. amounting to $ 1200)
Jul-21	Sales Return and Allownace A/c Dr.	100
	To Account Receivable-Art Co A/c		100
	(Being credit memo amounting to $100 issued to Art Co for an allowance on goods sold)
Jul-24	Account Payable-Leight Co A/c Dr.	2000
	To Cash A/c		1960
	To Discount Received A/c		40
	(Being amount paid to leight co within the discounting period)
Jul-30	Cash A/c Dr.	1078
	Discount A/c Dr.	22
	To Account Receivable- Art Co. A/c		1100
	(Being amount received from Art Co net of discount for making payment within discounting period)
Jul-31	Account Receivable-Creek Co A/c Dr.	7000
	To Sales A/c		7000
	(Being merchandise sold to Creek Co on credit amounting to $ 7000)