General Ledger (GL) Assignments For the following GL assignments, prepare journal entries highlighting the operating cycle of a merchandising company. A trial balance is automatically generated based on the journal entries recorded—this feature can be turned off.

GL 5-1 Based on Problem 5-1A 

GL 5-2 Based on Problem 5-2A

GL 5-3 Based on Problem 5-5A

Based on Problem 5-1A

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 $6,000 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 $125 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 $2,200 under credit terms of 2∕15, n∕60, FOB destination, invoice dated July 9.
11. Returned $200 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 $800 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.

Based on Problem 5-2A

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

Aug. 1. Purchased merchandise from Aron Company for $7,500 under credit terms of 1∕10, n∕30, FOB destination, invoice dated August 1.

5. Sold merchandise to Baird Corp. for $5,200 under credit terms of 2∕10, n∕60, FOB destination, invoice dated August 5. The merchandise had cost $4,000.

8. Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1∕10, n∕45, FOB shipping point, invoice dated August 8.

9. Paid $125 cash for shipping charges related to the August 5 sale to Baird Corp.

10. Baird returned merchandise from the August 5 sale that had cost Lowe’s $400 and was sold for $600. The merchandise was restored to inventory.

12. After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe’s received a price reduction from Waters of $400 off the $5,400 of goods purchased. Lowe’s debited accounts payable for $400.

14. At Aron’s request, Lowe’s paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed (accounts payable) to Aron.

15. Received balance due from Baird Corp. for the August 5 sale less the return on August 10.

18. Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12.

19. Sold merchandise to Tux Co. for $4,800 under credit terms of n∕10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400.

22. Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe’s gave a price reduction (allowance) of $500 to Tux and credited Tux’s accounts receivable for that amount.

29. Received Tux’s cash payment for the amount due from the August 19 sale less the price allowance from August 22.

30. Paid Aron Company the amount due from the August 1 purchase.

Based on Problem 5-5A

The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense—Store Equipment, Sales Salaries Expense, Rent Expense—Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.

Transcribed Image Text:

NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit Cash $ 1,000 Merchandise inventory 12,500 Store supplies 5,800 Prepaid insurance 2,400 Store equipment 42,900 $ 15,250 Accumulated depreciation-Store equipment Accounts payable 10,000 J. Nelson, Capital J. Nelson, Withdrawals 32,000 2,200 Sales 111,950 Sales discounts 2,000 Sales returns and allowances 2,200 Cost of goods sold 38,400 Depreciation expense-Store equipment Sales salaries expense 17,500 Office salaries expense 17,500 Insurance expense Rent expense-Selling space 7,500 Rent expense-Office space 7,500 Store supplies expense Advertising expense 9,800 Totals $169,200 $169,200