Problem 4-1A (Algo) Preparing journal entries for merchandising activities 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 $1,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $550. 3 Paid $120 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 $2,400 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. 11 Returned $400 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 $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. 21 Gave a price reduction (allowance) of $200 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 $5,400 to Creek Co. for $7,100 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. X Answer is not complete. No Credit Date July 01 General Journal Merchandise inventory Accounts payable-Boden Debit 6,600 1 6,600 2 July 02 1,000 Accounts receivable-Creek Sales 1,000 3 July 02 550 Cost of goods sold Merchandise inventory 550 4 July 03 120 Merchandise inventory Cash 120 5 July 08 X 2,300 Accounts receivable Creek Sales 2,300 6 July 08 1,900 Cost of goods sold Merchandise inventory 1,900 . 7 July 09 2,200 X Merchandise inventory Accounts payable-Leight 2,200 X 8 July 11 400 Accounts payable-Leight Merchandise inventory oo 400 9 July 12 Cash Sales discounts Accounts receivable-Creek 11 July 19 X 1,200 Accounts payable-Art Sales 1,200 o 12 July 19 800 Cost of goods sold Merchandise inventory 800 13 July 21 200 Sales returns and allowances Accounts receivable-Art 200 14 July 24 Accounts payable-Leight Sales discounts Cash X 15 July 30 Cash Sales discounts 16 July 31 7,100 Accounts receivable-Creek Sales OO 7,100 17 July 31 5,400 Cost of goods sold Merchandise inventory 5,400
