ASSIGNMENT: MERCHANDISING BUSINESS

Transactions for May 2019:

May 5 Purchased merchandise on account, P200,000; terms: trade discount 20%; 3/15, n/30, FOB
shipping point, freight collect, P5,000.
6 Sold merchandise on account, list price 100,000. Terms: trade discount 10%; 5/15, n/30,
FOB destination, freight collect, P10,000.
7 Purchased merchandise for cash, 150,000, FOB destination, freight prepaid, 1,500.
8 Sold goods for cash, 100,000. Transportation cost is 1,000, FOB shipping point, freight collect
9 Purchased merchandise on account, 300,000; terms: trade discount 20% and 10%; 5/10, n/30. FOB,
destination, freight collect, 10,000.
10 Sold merchandise, list price 200,000. Terms: trade discount 20% and 10%; 5/10, n/30. FOB destination,
freight prepaid, 30,000.
11 Purchased on account 100,000. FOB shipping point, freight prepaid, 1,000.
12 Sold 200,000. Terms: 3/10, n/30; FOB shipping point, freight prepaid, 2,000.
15 Paid the account for May 5.
20 Paid the account for May 9.
21 Collected sales for May 6.
Requirement:
1. Prepare the journal entries for the following transactions above using: (write your entries on the provided journal sheet)
a. Periodic Inventory System
b. Perpetual Inventory System (cost of sale is 50% of the invoice price)
2. Compute for the correct amount of the following: (Provide solutions, NO solution/s, NO point/s).
a. Total Net Sales _______________
b. Total Accounts Receivable _________________
c. Total Freight-Out _______________________
d. Total sales discount _______________________
e. Net Purchases _______________________
f. Accounts payable _______________________
g. Total freight-in _______________________
h. Cost of sales _______________________
i. Net Income _______________________
PERIODIC INVENTORY SYSTEM PERPETUAL INVENTORY SYSTEM
Date Account Title and Explanation Debit Credit Account Title and Debit Credit
Explanation

5 Purchases 160,000 Merchandise Inventory 160,000

0

Accounts Payable 155,000 Accounts Payable 155,00

0

Cash 5,000 Cash 5,000

Purchased on account, P200,000;

terms: trade discount 20%; 3/15,
n/30, FOB shipping point, freight
collect, P5,000.
6 Accounts Receivable 100,000 Accounts Receivable 100,000

Freight-Out 10,000 Freight-Out 10,000

Sales 100,000 Sales 100,00

0

Cash 10,000 Cash 10,000

Sold on account, list price Cost of Sales 50,000

100,000. Terms: trade discount
Merchandise Inventory 50,000
10%; 5/15, n/30, FOB destination,
freight collect, P10,000.

7 Purchases 150,000 Merchandise Inventory 150,000

Cash 150,000 Cash 150,00

0

Purchased merchandise for cash,

150,000, FOB destination, freight
prepaid, 1,500.
8 Cash 100,000 Cash 100,000

Sales 1000,00 Sales 100,00

0 0

Sold goods for cash, 100,000. Cost of Sales 50,000

Transportation cost is 1,000, FOB
Merchandise Inventory 50,000
shipping point, freight collect.

9 Purchases 216,000 Merchandise Inventory 216,000

Accounts Payable 206,000 Accounts Payable 206,00

0

Cash 10,000 Cash 10,000

Purchased merchandise on Purchased merchandise on

account, 300,000; terms: trade account, 300,000; terms: trade
discount 20% and 10%; 5/10, discount 20% and 10%; 5/10,
n/30. FOB, destination, freight n/30. FOB, destination, freight
 collect, 10,000. collect, 10,000.

10 Accounts Receivable 144,000 Accounts Receivable 144,000

Freight-Out 30,000 Freight-Out 30,000

Sales 144,000 Sales 144,00

0

Cash 30,000 Cash 30,000

Sold merchandise, list price Cost of Sales 72,000

200,000. Terms: trade discount
Merchandise Inventory 72,000
20% and 10%; 5/10, n/30. FOB
destination, freight prepaid, Sold merchandise, list price
30,000. 200,000. Terms: trade discount
20% and 10%; 5/10, n/30. FOB
destination, freight prepaid,
30,000.

11 Purchases 1000,00 Merchandise Inventory 100,000

0

Cash 1,000 Cash 1,000

Accounts Payable 101,000 Accounts Pa1yable 101,00

0

Purchased on account 100,000. Purchased on account 100,000.

FOB shipping point, freight FOB shipping point, freight
prepaid, 1,000. prepaid, 1,000.

12 Accounts Receivable 202,000 Accounts Receivable 202,000

Cost of Sales 202,000 Cost of Sales 202,00

0

Sold 200,000. Terms: 3/10, n/30; Sold 200,000. Terms: 3/10,

FOB shipping point, freight n/30; FOB shipping point,
prepaid, 2,000. freight prepaid, 2,000.

PERIODIC INVENTORY SYSTEM PERPETUAL INVENTORY SYSTEM

Date Account Title and Explanation Debit Credit Account Title and Debit Credit
Explanation

15 Accounts Payable 155,000 Accounts Payable 155,000

Cash 155,000 Cash 155,00

0

Paid the account for May 5. Paid the account for May 5.

20 Accounts Payable 206,000 Accounts Payable 206,000

Cash 206,000 Cash 206,00

0
 Paid the account for May 9. Paid the account for May 9.

21 Sales 100,000 Cost of Sales 50,000

Cash 100,000 Cash 50,000

Collected sales for May 6. Collected sales for May 6.