100.00 points Prepare journal entries to record the following merchandising tran

Question

100.00 points Prepare journal entries to record the following merchandising transactions of Cabela's, which applies 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 1Purchased merchandise from Boden Company for $6,700 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 $558 3 Paid $105 cash for freight charges on the purchase of July 1 8 Sold merchandise that had cost $2,000 for $2,400 cash 9 Purchased merchandise from Leight Co. for $2,900 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9 1 Received a $900 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. 6 Paid the balance due to Boden Company within the discount period 19 Sold merchandise that cost $1,200 to Art Co. for $1,800 under credit terms of 2/15, n/60 FOB shipping point, invoice dated July 19 21 Issued a $300 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 $5,500 to Creek Co. for $7,300 under credit terms of 2/10, n/60 FOB shipping point, invoice dated July 31

Explanation / Answer

Date General Journal Debit Credit 01-Jul Merchandise inventory 6,700 Accounts payable—Boden 6,700 02-Jul Accounts receivable—Creek     950 Sales     950 02-Jul Cost of goods sold     558 Merchandise inventory     558 03-Jul Merchandise inventory     105 Cash     105 08-Jul Cash 2,400 Sales 2,400 08-Jul Cost of goods sold 2,000 Merchandise inventory 2,000 09-Jul Merchandise inventory 2,900 Accounts payable—Leight 2,900 11-Jul Accounts payable—Leight     900 Merchandise inventory     900 12-Jul Cash     933 Sales discounts       17 Accounts receivable—Creek     950 16-Jul Accounts payable—Boden 6,700 Merchandise inventory     134 Cash 6,566 19-Jul Accounts receivable—Art 1,800 Sales 1,800 19-Jul Cost of goods sold 1,200 Merchandise inventory 1,200 21-Jul Sales returns and allowances     300 Accounts receivable—Art     300 24-Jul Accounts payable—Leight (2900-900) 2,000 Merchandise inventory (2900-900)*2%       40 Cash 1,960 30-Jul Cash     882 Sales discounts       18 Accounts receivable—Art (1200-300)     900 31-Jul Accounts receivable—Creek 7,300 Sales 7,300 31-Jul Cost of goods sold 5,500 Merchandise inventory 5,500

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