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 $6,600 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1.
		2		Sold merchandise to Creek Co. for $950 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $550.
		3		Paid $135 cash for freight charges on the purchase of July 1.
		8		Sold merchandise that had cost $1,900 for $2,300 cash.
		9		Purchased merchandise from Leight Co. for $2,300 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
		11		Returned $300 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, FOB 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 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 $5,400 to Creek Co. for $7,200 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31

Answer 1

Date	General Journal	Debit	Credit
1-July	Merchandise inventory	6,600
	Accounts payable-Boden		6,600
2-July	Accounts receivable-Creek	950
	Sales Revenue		950
2-July	Cost of goods sold	550
	Merchandise inventory		550
3-July	Merchandise inventory	135
	cash		135
8-July	Cash	2,300
	Sales Revenue		2,300
8-July	Cost of goods sold	1,900
	Merchandise inventory		1,900
9-July	Merchandise inventory	2,300
	Accounts payable-Leight co		2,300
11-July	Accounts payable-Leight co	300
	merchandise inventory		300
12-July	Cash	961
	Sales discount($950*2%)	19
	Accounts receivable-Creek		950
16-July	Accounts payable-Boden	6,600
	Merchandise inventory($6600*2%)		132
	Cash		6468
19-July	Accounts receivable-Art co	1,500
	Sales		1,500
19 - July	Cost of goods sold	1,000
	Merchandise inventoy		1,000
21-July	Sales return and allowance	250
	Accounts receivable-Art co		250
21-July	Merchandise Inventory	166.67
	Cost of Good sold ($1000/1500*$250)		166.67
24-july	Accounts payable-leight co	2,000
	Merchandise inventory($2000*2%)		40
	Cash		1960
30-Jul	Cash	1225
	Sales discount	25
	Accounts receivable-Art co($1500-$250)*2%		1,250
31-Jul	Accounts recievable-Creek	7,200
	Sales		7,200
31-July	Merchandise inventory	5,400
	Cost of goods sold		5,400