Journal Entries – Financial Accounting Fundamentals -Week 1

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Journal Entries – Financial Accounting Fundamentals – Week 1 Practice Week 1 Quiz

The key terms in this Financial Accounting course include Journal Entries – Financial Accounting Fundamentals – Week 1 Practice Week 1 Quiz


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 $950 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 $2,600 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
  11 Received a $600 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 $5,400 to Creek Co. for $6,900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Solution

NoDateGeneral JournalDebitCredit
1July 01Merchandise inventory6,600
Accounts payable—Boden6,600
2July 02Accounts receivable—Creek950
Sales950
3July 02Cost of goods sold550
Merchandise inventory550
4July 03Merchandise inventory120
Cash120
5July 08Cash2,300
Sales2,300
6July 08Cost of goods sold1,900
Merchandise inventory1,900
7July 09Merchandise inventory2,600
Accounts payable—Leight2,600
8July 11Accounts payable—Leight600
Merchandise inventory600
9July 12Cashselected answer correct931
Sales discountst19
Accounts receivable—Creek950
10July 16Accounts payable—Boden6,600
Merchandise inventory132
Cash6,468
11July 19Accounts receivable—Art1,800
Sales1,800
12July 19Cost of goods sold1,200
Merchandise inventory1,200
13July 21Sales returns and allowances300
Accounts receivable—Art300
14July 24Accounts payable—Leight2,000
Merchandise inventory40
Cash1,960
15July 30Cash1,470
Sales discounts30
Accounts receivable—Art1,500
16July 31Accounts receivable—Creek6,900
Sales6,900
17July 31Cost of goods sold5,400
Merchandise inventory5,400