Prepare journal entries to record the following merchandising transactions of Ca
ID: 2335818 • Letter: P
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 $125 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 $2,200 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. 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 $5,100 to Creek Co. for $7,100 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31Explanation / Answer
Date General Journal Debit Credit 10 Jul. 16 Accounts payable-Boden 6300 Merchandise inventory (2% x $6300) 126 Cash 6174 (To record payment on account) 13 Jul. 21 Sales returns and allowances 250 Accounts receivable-Art Co. 250 (To record credit memo for sales allowance) 14 Jul. 24 Accounts payable-Leight Co. ($2200 - $200) 2000 Merchandise inventory [2% x ($2200 - $200)] 40 Cash 1960 (To record payment on account) 15 Jul. 30 Cash 1225 Sales discount [2% x ($1500 - $250)] 25 Accounts receivable-Art Co. ($1500 - $250) 1250 (To record collection on account) 16 Jul. 31 Accounts receivable-Creek Co. 7100 Sales revenue 7100 (To record sales on account) 17 Jul. 31 Cost of goods sold 5100 Merchandise inventory 5100 (To record the cost of sales)