Problem 5-1A 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 $7,000 under credit terms of 2/15, 1/30, FOB shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $900 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 2. The merchandise had cost $583. 3 Paid $125 cash for freight charges on the purchase of July 1. 8 Sold merchandise that had cost $2,300 for $2,700 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 Received a $400 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. 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 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 $5,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. ces View transaction list View journal entry worksheet No 1 Date July 01 Credit General Journal Merchandise inventory Accounts payable--Boden Debit 7,000 7,000 2 July 02 Accounts receivable-Creek Sales 900 900 N July 02 Accounts receivable-Creek Sales Cost of goods sold Merchandise inventory 900 900 583 583 3 July 02 ces Merchandise inventory Cash 583 583 4 July 03 Merchandise inventory Cash 125 125 5 July 08 Accounts receivable-Leight Sales Cost of goods sold Merchandise inventory 2,700 2,700 2,300 2,300 6 July 08 Accounts receivable-Leight Sales Cost of goods sold Merchandise inventory 2,700 2,700 2,300 2,300 7 July 09 Merchandise inventory Accounts payable-Leight 2,400 2.400 7 July 09 Merchandise inventory Accounts payable--Leight 2,400 2,400 8 July 11 200 Accounts payable--Leight Merchandise inventory 200 9 July 12 Cash Sales discounts Accounts receivable-Creek 10 July 16 Accounts payable Boden Merchandise inventory Cash 11 July 19 Accounts receivable-Art Sales Cost of goods sold Merchandise inventory 1,800 1,800 12 July 19 1,200 Cost of goods sold Merchandise inventory 1,200 13 July 21 Sales returns and allowances 300 A 10 July 16 Accounts payable-Boden Merchandise inventory Cash 11 July 19 Accounts receivable Art Sales Cost of goods sold Merchandise inventory 1,800 1,800 12 July 19 Cost of goods sold Merchandise inventory 1,200 1,200 13 July 21 Sales returns and allowances Accounts receivableArt 300 300 14 July 24 Accounts receivable-Leight Merchandise inventory Cash 15 July 30 Cash Sales discounts Accounts receivable Art 16 July 31 Accounts receivable Creek Sales 7,000 7,000 17 July 31 Cost of goods sold Merchandise inventory 5,800 5,800