Problems 5-1A, 5-3A Step 3 Only, and 5-4A. Pages 204 - 205. A) P5-1A: You must use Accounts Receivable-Creek; Accounts Receivable-Art: Accounts Payable-Boden; Accounts Payable-Leight. Using T-Accounts for the 2 receivables and 2 payables is helpful. B) P5-3A: Only prepare a multiple-step income statement Problem 5-1A Preparing journal entries for merchandising activitiesperpetual system @P2 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. Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, July 1 invoice dated July 1. Sold merchandise to Creek Co. for $900 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 2. 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. Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, 1/60, FOB destination, invoice dated 9 July 9. 11 Returned $200 of merchandise purchased on July 9 from Leight Co. and debited its account payable for that amount Received the balance due from Creek Co. for the involce dated July 2, net of the discount 12 Check 2xy 12 De Cash, 8882 Paid the balance due to Boden Company within the discount period. 16 July 15. Cath $5.040 Sold merchandise that cost $800 to Art Co. for $1.200 under credit terms of 2/15, 1/60, FOB shipping point, invoice 19 dated July 19. Gave a price reduction (allowance) of $100 to Art Co. for merchandise sold on July 19 and credited Art's accounts 21 receivable for that amount. Paid Leight Co the balance due, net of discount. Problem 5-1A Preparing journal entries for merchandising activities-perpetual system P1 P2 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 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, 1 invoice dated July 1. Sold merchandise to Creek Co. for $900 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 2. 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. Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated 9 July 9. 11 Returned $200 of merchandise purchased on July 9 from Leight Co. and debited its account payable for that amount. Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. 12 Check July 12. Dr Cath, 5882 Paid the balance due to Boden Company within the discount period. 16 July 16, C Cash $5.040 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice 19 dated July 19. Gave a price reduction (allowance) of $100 to Art Co. for merchandise sold on July 19 and credited Art's accounts 21 receivable for that amount. Paid Leight Co. the balance due, net of discount. 24 July 24. Ct Cash 1.960 Received the balance due from Art Co. for the invoice dated July 19, net of discount. 30 July 30. Dr. Cash $1078 Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, 31 invoice dated July 31. Problem 5-3A Computing merchandising amounts and formatting income statements c2P4 Valley Company's adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Debit Credit Merchandise inventory (ending) $ 41,000 Other (noninventory) assets 130,400 Total liabilities $ 25,000 K. Valley, Capital 10,000 K. Valley, Withdrawals 8,000 Sales 225,600 Sales discounts 2,250 Sales returns and allowances 12,000 Cost of goods sold 74,500 Sales salaries expense 32,000 Rent expense-selling space 8,000 Store supplies expense 1,500 Advertising expense 13,000 Office salaries expense 28,500 Rent expense-Office space 3,600 Office supplies expense 400 Totals $355.150 $355.150 Beginning merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of merchandise purchases $92,000 Purchases discounts received 2,000 Purchases returns and allowances $4,500 Costs of transportation in 4.600 Beginning merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of merchandise purchases $92,000 Purchases retums and allowances $4,500 Purchases discounts received 2,000 Costs of transportation-in 4,600 Required 1. Compute the company's net sales for the year. 2. Compute the company's total cost of merchandise purchased for the year. Check (2) $90100 3. Prepare a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. (3) Gross profit. $136,850, Net income $49,850 4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses. (4) Total expenses. $161.500 Problem 5-4A Preparing closing entries and interpreting information about discounts and returns c2P3 Use the data for Valley Company in Problem 5-3A to complete the following requirement Required Prepare closing entries as of August 31 (the perpetual inventory system is used)