Exercise 1 Merchandising Updated [PDF]

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JOURNAL ENTRIES FOR MERCHANDISING BUSINESS Problem 1 Some of the transactions of Leonila Company whose credit terms are 2/10, n/30 follow: June



June



1



Cash sales, P180,000



4



Sales on account, P650,000.



7



Received returned merchandise sold on account, P90,000.



10



Collected the amount due on credit sales.



1



Cash



180,000 Sales



4



180,000



Accounts Receivables



650,000



Sales 7



650,000



Sales Returns and Allowances



90,000



Accounts Receivables 10



90,000



Cash



548,800



Sales Discounts



11,200



Accounts Receivables



560,000



Problem 2 Several purchase transactions of the Icaro Company are presented below. The credit terms of the company are 3/10, n/30. Oct



Oct



6



Purchased merchandise for cash, P200,000; FOB shipping point.



12



Purchased merchandise on account, P700,000.



15



Returned merchandise purchased on account, P50,000.



17



Paid supplier the amount due.



19



Paid freight charges of P7,000 on merchandise acquired last Oct. 6.



6



Purchases Cash



200,000 200,000



12



Purchases



700,000



Accounts Payable 15



700,000



Accounts Payable



50,000



Purchases Returns and Allowances 17



19



Accounts Payable



50,000 650,000



Cash



630,500



Purchases Discounts



19,500



Cash



7,000 Freight-in



7,000



Problem 3 On June 16, Ilano Co. sold merchandise to Pascual Co. for P6,000, terms 2/10, n/30. Shipping costs were P600. Pascual Co. received the goods and Ilano Co. invoice on June 17. On June 24, Pascual Co. sent the payment to Ilano Co., which Ilano Co. received on June 25. Both Ilano Co. and Pascual Co. use the periodic inventory system. The following are several arrangements regarding the shipping costs: a. Shipping terms are FOB shipping point, freight collect. Pascual Co. paid the shipping costs on June 17 and remitted P5,880 on June 24. Required: 1. Prepare the entries for Ilano Co. to record the sale and cash receipt. 2. Prepare the entries for Pascual Co. to record the purchase, the payment of shipping costs, and the cash remittance. June 16



Accounts Receivables 6,000 Sales 6,000 24 Cash 5,880 Sales Discount 120 Accounts Receivables 6,000 b. Shipping terms are FOB destination, freight prepaid. Ilano Co. paid the shipping costs on June 16. Pascual Co. remitted P5,880 on June 24.



Required: 1. Prepare the entries for Ilano Co. to record the sale, the payment of shipping costs, and the cash receipt. 2. Prepare the entries for Pascual Co. to record the purchase and cash remittance. June 16



Accounts Receivable Sales



6,000 6,000



Freight-out Cash 24



600 600



Cash 5,880 Sales Discount 120 Account Receivables



6,000



c. Shipping terms are FOB shipping point, freight prepaid. Ilano Co. paid the shipping costs on June 16 and added the P600 cost to the invoice sent to Pascual Co. Pascua Co. remitted P6,480 on June 24. Required: 1. Prepare the entries for Ilano Co. to record the sale and freight payment, and the cash receipt. 2. Prepare the entries for Pascual Co. to record the purchase and the cash remittance. June 16



24



Accounts Receivables Sales



6,000



Accounts Receivables Cash



600



Cash Sales Discount Accounts Receivables



6,480 120



6,000



600



6,600



d. Shipping terms are FOB destination, freight collect. Pascual Co. paid the shipping costs on June 17 and deducted the P600 from the amount owed to Ilano Co. A copy of the freight bill to Ilano Co. was provided with the June 24 cash remittance. Pascual Co. remitted P5,280 on June 24. Required: 1. Prepare the entries for Ilano Co. to record the sale and cash receipt. 2. Prepare the entries for Pacual Co. to record the purchase, the freight payment, and the remittance.



June 16



24



Accounts Receivables Sales



6,000



Freight-out Accounts Receivable



600



Cash Sales Discount Accounts Receivables



5,280 120



6,000



600



5,400



Problem 4 Armando Company entered into the following transactions during the month of June: June



2



Purchased 1,000 tires at a cost of P600 per tire, 1/10, n/45.



4



Paid trucking firm P 8,000 to ship the tires purchased on June 2.



5



Purchased 600 tires at a cost of P600 per tire, 2/10, n/30.



6



Paid trucking firm P5,000 to ship the tires purchased on June 5.



7 Received a 11 13 tire, 1/10,



June



Returned 150 of the tires purchased on June 2 because they were defective. credit on open account from seller. Paid tires purchased on June 2. Sold 700 tires from those purchased on June 2. The selling price was P900 per n/30.



22



Received cash from sale of tires on June 13.



30



Paid for tires purchased on June 5.



2



Purchases



600,000



Accounts Payable 4



Freight-in



600,000 8,000



Cash 5



Purchases



8,000 120,000



Accounts Payable 6



Freight-in



120,000 5,000



Cash 7



Accounts Payable



5,000 90,000



Purchases Returns and Allowances 11



13



Accounts Payable



90,000 510,000



Cash



504,900



Purchases discounts



5,100



Accounts Receivable Sales



630,000 630,000



22



Cash



623,700



Sales Discount



6,300



Sales 30



Accounts Payable



630,000 120,000



Cash



120,000



Problem 5 Virginia engaged in the following transactions in August: Aug



1



3 P38,000.



Purchased merchandise on credit from Cabellon n/30, FOB shipping point,



5



Paid Southmin for freight charges on merchandise received, P290.



6



Purchased store supplies on credit from Ipil, n/20, P6,360.



8



Purchased merchandise on credit from Pagadian Company n/30, FOB shipping P36,000. Pagadian Company paid P200 for freight.



12



Returned some of the merchandise received on Aug 3 for credit, P6,000.



point,



15 P12,000.



Aug



Sold merchandise to Lacierda on credit, n/30, FOB shipping point, P21,000.



Sold merchandise on credit to Columban Stores, n/30, FOB shipping point,



16



Returned some of the store supplies purchased on Aug 6 for credit, P2,000.



17



Sold merchandise for cash, P10,000.



18



Accepted for full credit a return from Lacierda, P2,000.



24



Paid accounts to Cabellon.



25



Received full payment from Lacierda.



1



Accounts Receivable



21,000



Sales 3



Purchases



21,000 38,000



Accounts Payable 5



Freight-in



38,000 290



Cash 6



Supplies



290 6,360



Accounts Payable 8



Purchases



6,360 36,000



Accounts Payable 12



Accounts Payable



36,000 6,000



Purchases Returns and Allowances 15



Accounts Receivable



6,000 12,000



Sales 16



Accounts Payable



12,000 2,000



Supplies 17



Cash



2,000 10,000



Sales 18



Sales Returns and Allowances



10,000 2,000



Accounts Receivables 24



Accounts Payable 25



Cash Cash Accounts Receivable



2,000 32,000 32,000 19,000 19,000



Problem 6 Montrose Company completed the following transactions during May of the current year. Montrose Company uses a perpetual inventory system. M ay      



                   



3   Purchased merchandise on account from Floyd Co., P4,000, terms FOB .   shipping point, 2/10, n/30, with prepaid transportation costs of P120 added to   the invoice. 5   Purchased merchandise on account from Kramer Co., P8,500, terms FOB .   destination, 1/10, n/30.   6   Sold merchandise on account to C. F. Howell Co., list price P4,000, trade .   discount 30%, terms 2/10, n/30. The cost of the merchandise sold was P1,125.   8   Purchased office supplies for cash, P150.



                   



May



                                                               



.     1   0   .   1   3   .   1   4   .   1   5   .   1   6   .   1   9   .   2   2   .   2   4   .   2   5   .   3   1   .   3



Returned merchandise purchased on May 5 from Kramer Co., P1,300. Paid Floyd Co. on account for purchase of May 3, less discount. Purchased merchandise for cash, P10,500. Paid Kramer Co. on account for purchase of May 5, less return of May 10 and discount. Received cash on account from sale of May 6 to C. F. Howell Co., less discount. Sold merchandise on nonbank credit cards and reported accounts to the card company, American Express, P2,450. The cost of the merchandise sold was P980. Sold merchandise on account to Comer Co., P3,480, terms 2/10, n/30. The cost of the merchandise sold was P1,400. Sold merchandise for cash, P4,350. The cost of the merchandise sold was P1,750. Received merchandise returned by Comer Co. from sale on May 22, P1,480. The cost of the returned merchandise was P600. Received cash from card company for nonbank credit card sales of May 19, less P140 service fee.



Inventory



4,000



Accounts Payable 5



Inventory



4,000 8,500



Accounts Payable 6



Accounts Receivable



8,500 2,800



Sales Cost of Goods Sold



2,800 1,125



Inventory 8



Office Supplies Cash



1,125 150 150



10



Accounts Payable



1,300



Inventory 13



14



1,300



Accounts Payable



4000



Cash



3920



Purchases Discount



80



Inventory



10,500



Cash 15



16



10,500



Accounts Payable



7.200



Cash



7128



Purchases Discount



72



Cash



2744



Sales Discount



56



Accounts Receivable 19



Accounts Receivable



2,800 2,450



Sales Cost of Goods Sold



2,450 980



Inventory 22



Accounts Receivable



980 3,480



Sales Cost of Goods Sold



3,480 1,400



Inventory 24



Cash



1,400 4,350



Sales Cost of Goods Sold



4,350 1,750



Inventory 25



Sales Returns and Allowances



1,750 1,480



Accounts Receivable Inventory



1,480 600



Cost of Goods Sold 31



Cash



600 2,310



Accounts Receivable



2,310



Problem 7 Marichu engaged in the following transactions in December: Dec 7 P30,000.



Sold merchandise on credit to Caindec Company, n/30, FOB shipping point,



8 P60,000.



Purchased merchandise on credit from Kho Company, n/30, FOB shipping point,



9 8, P254.



Paid Dinopol Company for shipping charges on merchandise purchased on Dec



10 Purchased merchandise on credit from Magallanes Company, n/30, FOB shipping point, P95,400. Freight costs of P600 was paid by Magallanes. 13 14 P24,000.



Purchased office supplies on credit from Carlos Company, n/10, P24,000. Sold merchandise on credit to Zosa Company, n/30, FOB shipping point,



14 Returned damaged merchandise received from Kho Company on Dec 8 for credit, P6,000. 17



Received check from Caindec Company for his purchase on Dec 7.



18 Returned portions of the office supplies received on Dec 13 for credit because the wrong items were sent, P4,000.



Dec



19



Sold merchandise for cash, P18,000.



20



Paid Magallanes Company for purchase on Dec 10.



21



Paid Kho Company.



24



Accepted from Zosa Company a return of merchandise, P2,000.



7



Accounts Receivable



30,000



Sales 8



Purchases



30,000 60,000



Accounts Payable 9



Freight-in



60,000 254



Cash 10



Purchases



254 95,400



Accounts Payable Freight-in



95,400 600



Accounts Payable 13



Office Supplies



600 24,000



Accounts Payable 14



Accounts Receivable



24,000 24,000



Sales



14



Accounts Payable



24,000



6,000



Purchases Returns and Allowances 17



Cash



6000 30,000



Accounts Receivable 18



Accounts Payable



30,000 4,000



Office Supplies 19



Cash



4,000 18,000



Sales 20



Accounts Payable



18,000 96,000



Cash 21



Accounts Payable



96,000 54,000



Cash 24



Sales Returns and Allowances Accounts Receivable



54,000 2,000 2,000



Problem 8 Ramos Company and Cammayo Company engaged in the following transactions for the month of May: May 4 Ramos sold merchandise on account to Cammayo, P162,000. Terms: FOB destination, 2/10, n/30. Freight charges amounted to P2,000.



5 Ramos sold merchandise on account to Cammayo, P710,000. Terms: FOB shipping point, 2/10, n/30. Freight charges amounted to P8,000. 6



Cammayo paid freight charges on purchase of May 5.



7 Ramos received returned merchandise from Cammayo in the amount of P12,000 from May 4 sale. 9



Ramos received payment from Cammayo for the May 4 transaction.



10



Ramos paid transportation charges on the May 4 shipment.



12



Ramos received payment from Cammayo for the May 5 transaction.



18 Ramos sold merchandise on account to Cammayo, P250,000 list price. Terms: 40% trade discount discount, FOB shipping point, 2/10, n/30. 21



Cammayo paid freight charges on the May 18 transaction, P3,000.



23 transaction.



Ramos received payment from Cammayo for the amount due from the May 18



May



Accounts Receivable



4



162,000



Sales Freight-out



162,000 2,000



Accounts Payable 5



Accounts Receivable



2,000 162,000



Sales Accounts Receivable



162,000 8,000



Cash 6



Cash



8,000 8,000



Accounts Receivable 7



Sales Returns and Allowances



8,000 12,000



Accounts Receivable 9



12,000



Cash



147,000



Sales Discount



3,000



Accounts Receivable



150,000



10



Accounts Payable



2,000



Cash 12



2,000



Cash



695,800



Sales Discount



14,200



Accounts Receivable 18



Accounts Receivable



710,000 150,000



Sales Accounts Receivable



150,000 3,000



Cash



21



Cash



3,000



3,000 Accounts Receivable



23



3,000



Cash



147,000



Sales Discount



3,000



Accounts Receivable



150,000