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 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, FOB shipping point, invoice dated July 1.
		2		Sold merchandise to Creek Co. for $1,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $567.
		3		Paid $115 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, FOB destination, invoice dated July 9.
		11		Received a $700 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.
		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, FOB shipping point, invoice dated July 19.
		21		Issued a $250 credit memorandum to Art Co. for an allowance on goods sold on July 19.
		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 $5,600 to Creek Co. for $7,100 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Answer 1

Date	General Journal					Debit	Credit
1-Jul	Merchandise inventory					6,800
	Accounts payable-Boden						6,800
2-Jul	Accounts receivable-Creek					1,000
	Sales						1,000
	cost of goods sold					567
	Merchandise inventory						567
3-Jul	Merchandise inventory					115
	cash						115
8-Jul	Cash					2,500
	sales						2,500
	cost of goods sold					2,100
	Merchandise inventory						2,100
9-Jul	Merchandise inventory					2,700
	Accounts payable-Leight co						2,700
11-Jul	Accounts payable-Leight co					700
	merchandise inventory						700
12-Jul	Cash					980
	Sales discount					20
	Accounts receivable-Creek						1,000
16-Jul	Accounts payable-Boden					6,800
	Merchandise inventory						136
	cash						6664
19-Jul	Accounts receivable-Art co					1,500
	Sales						1,500
	Cost of goods sold					1,000
	Merchandise inventoy						1,000
21-Jul	Sales return and allowance					250
	Accounts receivable-Art co						250
24-Aug	Accounts payable-leight co					2,000
	Merchandise inventory						40
	Cash						1960
30-Jul	Cash					1225
	Sales discount					25
	Accounts receivable-Art co						1,250
31-Jul	Accounts recievable-Creek					7,100
	Sales						7,100
	Merchandise inventory					5,600
	Cost of goods sold						5,600