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 $6,300 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 $525.
		3		Paid $120 cash for freight charges on the purchase of July 1.
		8		Sold merchandise that had cost $1,600 for $2,000 cash.
		9		Purchased merchandise from Leight Co. for $2,900 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
		11		Returned $900 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 $5,100 to Creek Co. for $7,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

  

Answer 1