1. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n /30, FOB destination. 2. Fall Company paid freight charge of P50,000. 3. During the year, Fall Company paid for 80% of the merchandise within the discount period. 4. The remaining 20% was paid beyond the discount period. 5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required: Prepare journal entries to record the transactions usıng gross method and net method.

1. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n /30, FOB destination. 2. Fall Company paid freight charge of P50,000. 3. During the year, Fall Company paid for 80% of the merchandise within the discount period. 4. The remaining 20% was paid beyond the discount period. 5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required: Prepare journal entries to record the transactions usıng gross method and net method.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 11RE: Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year,...

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Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year, it made net purchases of 180,000 at cost and 322,000 at retail. Johnson nude sales of 300,000. Assuming a price index of 100 at the beginning of the year and 110 at the end of the year, compute Johnsons ending inventory at cost using the dollar-value LIFO retail method.
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
JBL undertook the following transactions for the month of Nov Purchased merchandise or $80,000 less 5-5 on terms 3/10 n/30. The entity paid freight for $2,500 and returned defective goods worth $7,000. JBL paid this account in full within the discount period. How much was the purchase discount?
During the year, a firm purchased $56,970 of merchandise and paid freight charges of $12,680. If the total purchases returns and allowances were $6,495 and purchases discounts were $2,050 for the year, what is the net delivered cost of purchases? Multiple Choice $72,349 $69,650 $61,105 $35,745
ABC company purchased 10,000 units of merchandise for Php40 per unit. The credit term is 2/10, n/30m, FOB shipping point, freight collect of Php 1,000. Prepare the journal entry at the point of sale using the gross method. Prepare the journal entry at the date of collection using the gross method if the collection is made within the discount period ABC company purchased 10,000 units of merchandise for Php40 per unit. The credit term is 2/10, n/30m, FOB shipping point, freight collect of Php 1,000. Prepare the journal entry at point of sale using net method Prepare the journal entry at date of collection using net method if collection is made beyond the discount period
Vanessa company purchased P15,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point, freight prepaid. The freight charge was P500. On June 20, it returned P800 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:
Presented below are transactions related to Pharoah Company. 1. On December 3, Pharoah Company sold $606,000 of merchandise to Flounder Co., terms 3/10, n/30, FOB destination. Pharoah paid $560 for freight charges. The cost of the merchandise sold was $384,100. 2. On December 8, Flounder Co. was granted an allowance of $29,500 for merchandise purchased on December 3. 3. On December 13, Pharoah Company received the balance due from Flounder Co. (a) Prepare the journal entries to record these transactions on the books of Pharoah Company using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Date Account Titles and Explanation Debit Credit 1. 2.…
Hayao Co. purchases inventory from overseas and incurs the following costs: the cost of the merchandise is $50,000 with the credit terms of 2/10, n/30; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000. Hayao paid within the discount period and incurred additional costs of $1,200 for advertising, $5,000 for sales commissions and $500 for delivery of goods to the customers. Compute the cost that should be assigned to the inventory.
On October 1, XYZ Company purchased P6,000 worth of goods on terms of 2/15,n/30. Freight of P500 was prepaid by the seller under the term FOB shipping point. Goods worth P1,000 were returned on October 2 and the account was paid on October 3. The discount received from the seller was
Refer to the above transaction. Shaw paid Reynold Company in full within discount period. Provide the necessary journal entry to record the transaction. Debit Credit Shaw sold 1500 units of XOM for $20 per unit plus 8% sales taxes to Polo Company in cash. Sales tax was not included in price. Each unit of XOM had cost company $10.40. Provide the necessary journal entry to record the transaction. Debit Credit The following information pertains merchandise inventory of Bloom Company at the end of year.Apply Lower of Cost or Market rule and provide the necessary adjusting entry for adjustment of inventory account balance in the space provided on the Answer Sheets. Item Quantity on hand Unit Cost Selling Price Replacement Cost Net Realizable Value (Ceiling Price) Net Realizable Value Less Normal Profit (Floor Price) LCM Zoom 300 $90 $120 $105 $100 $75 Zap 600 $60…
Bell Corporation sold merchandise on account with a list price of $18,000 and a cost of $10,000. Payment terms were 1/10, n/30. Bell shipped the goods FOB destination and paid $600 in freight costs. Prior to payment of the invoice, the customer returned merchandise with a list price of $1,800 and a $1,000 cost. The customer paid the amount due within the discount period. What is Bell Corporation's net sales amount as a result of these transactions?
Lapu-lapu Company sold merchandise on a consignment basis to dealers. The gross profit was 25% above cost. The dealer is paid a 10% commission of the sales price for all sales made. All dealer sales are made on a cash basis. The following consignment activities occurred during the current year Manufacturing cost of goods shipped on consignment 8,800,000 Sales price of merchandise sold by dealers 9,600,000 Payments remitted by dealers after deducting commission 6,300,000 19. What was the gross profit on consignment sales? 1,920,000 c. 1,700,000 1,220,000 d. 2,400,000