Effects on cash vs. Effects on net income

Using basic transactions that we have covered before, analyze the transaction with respect to its effect on cash and net income

Use INC if the transactions increases cash (net Income)

DEC if the transaction decreases cash (net Income)

USE NE if the transaction does not affect cash (net income)

Use the transactions in Problem 2-1A (page 74) **I COMPLETED THIS ONE ALREADY** and

Problem 5-1A (page 201)

Problem 5-1A Preparing journal entries for merchandising activities P1 P2 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 115, 130, 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 $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, 1160, 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 215, 1/60, 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, 160, FOB shipping point, invoice dated July 31. P 5-1A, page 201 July 1 2 3 8 9 11 12 16 19 21 24 30 31