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During the month of April 2015, the Smith Company had the transactions:
April 1
Smith sold on account merchandise costing P75, 000 for P93, 750.
Terms: FOB destination; 2/10, n/30. Freight charges P1, 500.
Accounts Receivable
Sales
93, 750
93, 750
Accounts Receivable
Sales
93, 750
93, 750
Cost of sales
75, 000
Merchandise Inventory
75, 000
April 5
Purchases
Accounts Payable
243, 000
243, 000
Freight in
Cash
4, 000
April 7
4, 000
Merchandise Inventory
Accounts Payable
243, 000
243, 000
Merchandise Inventory
Cash
4, 000
Purchases
Accounts Payable
470, 000
470, 000
Merchandise Inventory
Accounts Payable
April 8
4, 000
470, 000
470, 000
Smith returned P18, 000 of merchandise to Gold Supply from April 5 purchase.
Accounts Payable
Purchase returns
18, 000
18, 000
Accounts Payable
18, 000
Merchandise Inventory
18, 000
April 9
Smith sold one half of the net purchases from April 5 for P135, 000.
Terms: FOB shipping point; 2/10, n/30. Freight charges prepaid amounted to P5, 000.
Accounts Receivable
Sales
135, 000
135, 000
Accounts Receivable
Cash
5, 000
5, 000
Accounts Receivable
Sales
135, 000
135, 000
Cost of sales
112, 500
Merchandise Inventory
112, 500
Accounts Receivable
Cash
April 10
5, 000
5, 000
Smith paid Gold Supply the amount due on the April 5 transaction.
Accounts Payable
Cash
Purchase Discount
225, 000
218, 250
6, 750
Accounts Payable
225, 000
Cash
218, 250
Merchandise Inventory
6, 750
April 11
Cash
Sales Discount
Accounts Receivable
91, 875
1, 875
93, 750
Cash
Sales Discount
Accounts Receivable
April 14
216, 000
216, 000
Merchandise Inventory
Accounts Payable
216, 000
216, 000
Cash
Sales Discount
Accounts Receivable
132, 300
2, 700
135, 000
Cash
Sales Discount
Accounts Receivable
April 25
93, 750
Purchases
Accounts Payable
April 19
91, 875
1, 875
132, 300
2, 700
135, 000
Freight charges on the April 14 transaction amounted to P3, 000 and was paid by Gold Supply.
Freight in
Accounts Payable
3, 000
3, 000
Merchandise Inventory
Accounts Payable
3, 000
3, 000
April 26
Accounts Payable
Cash
219, 000
219, 000
Accounts Payable
Cash
April 28
219, 000
219, 000
Sold merchandise for P515, 000 on a cash basis. The merchandise cost P485, 000.
Terms: FOB destination.
Cash
515, 000
515, 000
Sales
Cash
Sales
515, 000
515, 000
Cost of Sales
485, 000
Merchandise Inventory
485, 000
April 29
Received returns from customers of merchandise costing P12, 250. Sales on April 28; selling
price P17, 500.
Sales returns
Cash
April 30
17, 500
17, 500
Sales returns
Cash
17, 500
Merchandise Inventory
Cost of Sales
12, 250
17, 500
12, 250
Freight out
Cash
9, 700
9, 700
Freight out
Cash
9, 700
9, 700
Additional information:
1. Beginning inventory amounted to P115, 000.
Income Summary
115, 000
Merchandise Inventory
115, 000
2. Ending inventory per count amounted P410, 000.
Merchandise Inventory
Income Summary
410, 000
410, 000
Merchandise Inventory
Cost of Sales
Requirements:
1. Prepare journal entries.
44, 000
44, 000