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Saved Problem 4-1A Preparing journal entries for merchandising activities-perpetual system LO P1, P2 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 $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $550. 3 Paid $125 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, 1/60, FOB shipping point, invoice dated July 19. 21 Gave 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 55,400 to Creek Co. for $7,000 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 31, View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8. .. 17 < Prey 6 of 8 Next >

Answer 1

Answer -

No.	Date	General Journal	Debit ($)	Credit ($)
1.	July 1	Merchandise inventory Accounts payable--Boden	6600 -	- 6600
2.	July 2	Accounts receivable--Creek Sales	900 -	- 900
3.	July 2	Cost of goods sold Merchandise inventory	550 -	- 550
4.	July 3	Merchandise inventory Cash	125 -	- 125
5.	July 8	Cash Sales	2300 -	- 2300
6.	July 8	Cost of goods sold Merchandise inventory	1900 -	- 1900
7.	July 9	Merchandise inventory Accounts payable--Leight	2300 -	- 2300
8.	July 11	Accounts payable--Leight Merchandise inventory	300 -	- 300
9.	July 12	Cash [Difference] Sales discounts [$900 * 2%] Accounts receivable--Creek	882 18 -	- - 900
10.	July 16	Accounts payable--Boden Merchandise inventory [$6600 * 2%] Cash [Difference]	6600 - -	- 132 6468
11.	July 19	Accounts receivable--Art Sales	1500 -	- 1500
12.	July 19	Cost of goods sold Merchandise inventory	1000 -	- 1000
13.	July 21	Sales returns and allowances Accounts receivable--Art	250 -	- 250
14.	July 24	Accounts payable--Leight Merchandise inventory [$2000 * 2%] Cash [Difference]	2000 - -	- 40 1960
15.	July 30	Cash [Difference] Sales discounts [$1250 * 2%] Accounts receivable--Art	1225 25 -	- - 1250
16.	July 31	Accounts receivable--Creek Sales	7000 -	- 7000
17.	July 31	Cost of goods sold Merchandise inventory	5400 -	- 5400