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 $6,200 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 $517. 3 Paid $130 cash for freight charges on the purchase July 1. 8 Sold merchandise that had cost $1,500 for $1,900 cash. 9 Purchased merchandise from Leight Co. for $2,900 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. 11 Returned $900 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 $1,200 to Art Co. for $1,800 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. 21 Gave a price reduction (allowance) of $300 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 $5,000 to Creek Co. for $6,990 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. Date Debit Answer is not complete. General Journal Merchandise inventory Accounts payable-Boden No 1 Credit July 01 6,200 6,200 2 July 02 950 Accounts receivable-Creek Sales 950 July 02 517 Cost of goods sold Merchandise inventory 217 4 July 03 130 Merchandise inventory Cash 130 5 July 08 1,900 Cash Sales 1,900 6 July 08 1,500 Cost of goods sold Merchandise inventory 1,500 7 July 09 2.900 Merchandise inventory Accounts payable-Leight 2.900 8 July 11 900 Accounts payable-Leight Merchandise inventory 900 9 July 12 Cash Sales discounts Accounts receivableCreek 950 X 95 x DI 950 10 July 16 6,400 Accounts payable-Boden Cash Merchandise inventory 6,272 x 128 11 July 19 1,800 Accounts receivable-Art Sales 1,800 12 July 19 1,200 Cost of goods sold Merchandise inventory 1,200 13 July 21 300 Sales returns and allowances Accounts receivableArt 300 14 July 24 Accounts payable-Leight Cash Merchandise inventory >> 15 July 30 Cash Sales discounts Accounts receivable-Art 16 July 31 6,900 Accounts receivable-Creek Sales 6,900 17 July 31 5,000 Cost of goods sold Merchandise inventory 5,000
