PROBLEM SETA Problem 5-1A Preparing journal entries for merchandising activities--perpetual System P1 P2 En connect 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 pay- able: for example, record the purchase on July 1 in Accounts Payable-Boden July 1 Purchased merchandise from Boden Company for $6.000 under credit terms of 1/15. 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 $500 3 Paid S125 cash for freight charges on the purchase of July 1. 8 Sold merchandise that had cost $1.300 for $1.700 cash. 9 Purchased merchandise from Leight Co. for S2.200 under credit terms of 2/15. n/60, FOB destination, invoice dated July 9. 11 Returned 5200 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 5800 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 $100 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 $4,800 to Creek Co. for $7.000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. Check July 12. De Cash 588 July 16, Cash 55,940 July 24. C Cash $1,960 July 30, Dr. Cash, $1,078