Prepare journal entries to record the following merchandising transactions of Cabela's, which uses the perpetual inventory

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 $6,000 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 Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9.

Electronic Innovators is the defendant in a $10 million lawsuit filed by one of its customers

Electronic Innovators is the defendant in a $10 million lawsuit filed by one of its customers, Aviation Systems. The litigation is in final appeal, and legal counsel advises that it is probable that Electronic Innovators will lose the lawsuit. The estimated amount is somewhere between $6 and $10 million.

Which of the following statement(s) are true? (Select all that apply.)

A loss and a liability must be recorded for $6 million.

A loss and a liability must be recorded for $10 million.

A disclosure note should be included for a range of $6 and $10 million to the financial statements with an entry for the minimum amount.

A disclosure note should be included for a range of $6 and $10 million to the financial statements with an entry for the maximum amount.

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Electronic Innovators has a contingent liability that is probable and can be reasonably estimated within a range between $6 and $10 million. Electronic Innovators should record a loss and a liability for the minimum amount ($6 million) and disclose the range between $6 and $10 million in the notes to the financial statements.