Prepare journal entries to record the following merchandising transactions of Cabela’s, which uses the perpetual inventory system and the gross method. July 1 Purchased merchandise from Boden Company for $6,900 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1. July 2 Sold merchandise to Creek Company for $950 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $575. July 3 Paid $110 cash for freight charges on the purchase of July 1. July 8 Sold merchandise that had cost $2,200 for $2,600 cash. July 9 Purchased merchandise from Leight Company for $2,500 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11 Returned $500 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 $5,700 to Creek Company for $7,200 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 7E: Record the following transactions for a perpetual inventory system in general journal form. a. Sold...

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Prepare journal entries to record the following merchandising transactions of Cabela’s, which uses the perpetual inventory system and the gross method.

July 1	Purchased merchandise from Boden Company for $6,900 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1.
July 2	Sold merchandise to Creek Company for $950 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $575.
July 3	Paid $110 cash for freight charges on the purchase of July 1.
July 8	Sold merchandise that had cost $2,200 for $2,600 cash.
July 9	Purchased merchandise from Leight Company for $2,500 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
July 11	Returned $500 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 $5,700 to Creek Company for $7,200 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

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Preparation of journal entries to record the following merchandising transactions of Cabela’s using the perpetual inventory system and the gross method as follows under:-

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