Question
Prepare journal entries to record the following merchandising transactions of Cabelas, which uses the perpetual inventory system and the gross method. Hint: It will help
Prepare journal entries to record the following merchandising transactions of Cabelas, 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 PayableBoden.
July 1 | Purchased merchandise from Boden Company for $7,000 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1. |
---|---|
July 2 | Sold merchandise to Creek Company for $1,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $583. |
July 3 | Paid $130 cash for freight charges on the purchase of July 1. |
July 8 | Sold merchandise that had cost $2,300 for $2,700 cash. |
July 9 | Purchased merchandise from Leight Company for $2,700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. |
July 11 | Returned $700 of merchandise purchased on July 9 from Leight Company and debited its account payable for that amount. |
July 12 | Received the balance due from Creek Company for the invoice dated July 2, net of the discount. |
July 16 | Paid the balance due to Boden Company within the discount period. |
July 19 | Sold merchandise that cost $1,000 to Art Company for $1,500 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. |
July 21 | Gave a price reduction (allowance) of $250 to Art Company for merchandise sold on July 19 and credited Art's accounts receivable for that amount. |
July 24 | Paid Leight Company the balance due, net of discount. |
July 30 | Received the balance due from Art Company for the invoice dated July 19, net of discount. |
July 31 | Sold merchandise that cost $5,800 to Creek Company for $6,900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. |
Only answer the following transactions:
1. Purchased merchandise from Boden Company for $7,000 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1.
2. Sold merchandise to Creek Company for $1,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2.
3. Record the cost of merchandise sold, $583.
4. Paid $130 cash for freight charges on the purchase of July 1.
5. Record sale of merchandise for $2,700 cash.
6. Record cost of merchandise sold, $2,300.
7. Purchased merchandise from Leight Company for $2,700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
8. Returned $700 of merchandise purchased on July 9 from Leight Company and debited its account payable for that amount.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started