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    Exercises - Sept. 29

    Uploaded by

    Keitheia Quidlat
    This document contains 7 problems related to calculating trade discounts, cash discounts, sales returns, and purchases and sales transactions using different credit terms. The problems require journalizing transactions, calculating amounts recorded as sales and cash received/remitted, determining cash discounts and purchase amounts under different recognition policies.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Exercises - Sept. 29

    Uploaded by

    Keitheia Quidlat
    559 views3 pages
    This document contains 7 problems related to calculating trade discounts, cash discounts, sales returns, and purchases and sales transactions using different credit terms. The problems require journalizing transactions, calculating amounts recorded as sales and cash received/remitted, determining cash discounts and purchase amounts under different recognition policies.

    Original Title

    Exercises - Sept. 29 (1)

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    This document contains 7 problems related to calculating trade discounts, cash discounts, sales returns, and purchases and sales transactions using different credit terms. The problems require journalizing transactions, calculating amounts recorded as sales and cash received/remitted, determining cash discounts and purchase amounts under different recognition policies.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    559 views3 pages

    Exercises - Sept. 29

    Uploaded by

    Keitheia Quidlat
    This document contains 7 problems related to calculating trade discounts, cash discounts, sales returns, and purchases and sales transactions using different credit terms. The problems require journalizing transactions, calculating amounts recorded as sales and cash received/remitted, determining cash discounts and purchase amounts under different recognition policies.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Problem 1

    Trade and Cash Discount Calculations

    On June 1, 2021, Eleno Buray Jr. Forest Products sold merchandise with a P120,000 list price

    Trade Discount Credit Terms Date Paid

    a. 40% 2/10,n/30 June 8


    b. 40% 1/10, n/30 June 15
    c. - 2/10, n/30 June 11
    d. 20% 1/15, n/30 June 14
    e. 40% n/30 June 28

    Required:

    For each of the sales terms, determine the following:

    1. The amount recorded as a sale


    2. The amount of cash received

    Problem 2

    On May 15, 2021, the Guzon Book Distributors acquired for resale books on account with alist price
    of P108,000. Butuan Publishing, the supplier, allowed a 15% trade discount as well as credit terms
    2/10, n/30. Guzon paid the invoice in full on May 20, 2021

    Required:

    Prepare the journal entries for Guzon Book Distributors

    Problem 3

    Cash Discount and remittance calculations

    For each of the following Mary Paz Abad Retailers purchases, assume that credit terms are 2/10,
    n/30 and that any credit memorandum was issued and known before Mary Paz Abad Retailers made
    the payments

    Purchases Shipping terms Prepaid Freight Credit Memo

    a. 12,000 FOB Shipping point P1,000 P3,000


    b. 24,000 FOB Destination P2,400 P2,000
    c. 28,000 FOB shipping point 4,000
    d. 40,000 FOB shipping point 3,000

    Required:

    1. Determine the cash discount available


    2. Determine the cash remitted if the payment is made within the discount period
    Problem 4

    Point of recognition

    Edgel Abear Car Repairs Shop purchases a large amount of auto parts for its business. The following
    table summarizes selected transaction data:

    Order Date shipped Date received Amount

    A June 26 July 5 P30,000

    B July 10 15 75,000

    C 16 22 40,000

    D 23 30 60,000

    E 27 Aug. 1 75,000

    F Aug. 3 7 50,000

    Required:

    Determine the July total purchases under each of the following assumptions:

    1. The entity recognizes purchases when orders are shipped


    2. The entity recognizes purchases when orders are received

    Problem 5

    Renz Aguhob Fireworks engaged in the following purchase transactions during the month. The entity
    observes the policy that all returns are made one day after the goods are received, and that all
    purchases are paid within the discount period.

    List price FOB Terms Freight charges Purchase Credit terms Trade Discount

    Returns and Allow

    P224,000 Shipping point P4,000 P21,000 2/10, n/30 30%

    P126,000 Destination 9,000 - 1/10, n/30 20%

    P90,000 Shipping point 2,000 7,000 2/10, n/30 -

    P41,000 Shipping point 1,000 9,000 n/30 25%

    357,000 Destination 14,000 24,000 3/10, n/30 20%

    Required:
    Using the table above, calculate the amount needed to settle each purchase
    Problem 6
    Sales Transactions
    Some of the sales transactions of Jefferson Triguero Distributors whose credit term terms
    are 2/10, n/30 follow:
    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 from credit sales
    Required:

    Prepare the journal entries

    Problem 7
    On June 8, 2021, Beatriz Onate Curtains sold merchandise for P16,000 to Northern Interiors;
    terms 2/10, n/30. On June 12, P14,000 worth of the merchandise was returned. On June 18,
    Beatriz Onate Curtains received a check for the amount due. Onate uses the periodic
    inventory system
    Required:
    Prepare the journal entries for Beatriz Onate Curtains

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