MGT111: Principle of Accounting

M.A. Perez

Problem 14 ((Weygandt, et al page 221)

This information relates to Bill Rohan Ltd.
1. On 5 April purchased inventory from M. Deluxed Ltd. For P19,800, terms 2/10, n/30, FOB delivery point.
2. On 6 April paid freight cost of P990 on inventory purchased from M. Deluxed Ltd.
3. On 7 April purchased equipment on account for P28,600.
4. On 8 April returned some of 5 April inventory to M. Deluxed Ltd. which cost P3,080.
5. On 15 April paid the amount due to M. Deluxed Ltd in full.
Instructions:
a. Prepare the journal entries to record these transactions on the books of Bill Rohan Ltd using periodic inventory
system.
b. Assume that Bill Rohan Ltd paid the balance due to M. Deluxe Ltd on 4 May instead of 15 April. Prepare the
journal entry to record this payment.
Problem 15
Determine the amount to be paid for the following purchases, assuming that returns were made before payment and
payment was made within the discount period.
List Price

Merchandise
Returned

Trade Discount

1. P 20,000

None

Terms

200

Cash Payment?

2/10, n/60

2.

42,000

5%

None

2 EOM, n/50

3.

12,000

10%

500

1/15,n/30

4.

500,000

20%

1,000

1/20, n/45

5.

80,000

12%

3,000

3/45, n/75

Problem 16
For each of the following sales, determine the amount collected.
Invoice Date
1. May 07

Amount

Terms

8,000

Date of
Payment

Cash collected?

2/10, 1/15, n/30

May 18

2. May 11

10,000

2/10, n/30

May 20

3. May 15

40,000

2/10, 1/20,n/60

June 04

4. May 28

33,000

3/10,2/30,1/45,
n/60

July 27

5. May 30

30,000

3/7, 2/15, n/30

June 14

Problem 17
Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns
and allowances was received prior to payment and that all invoices were paid within the discount period.
Merchandi
se
1.
)
2.
)
3.
)
4.
)

Transportatio
n paid by the
seller

Terms

P 8,000

3,000

P 100

19,000

5,000

150

FOB
Shipping
point,
1/10,n/30
FOB Shipping point,
2/10,n/30
FOB Destination, n/30
FOB Shipping point, 1/10,
n/30

Returns and
allowances
P 2,400
1,400
800
1,200

Cash
Payment?

MGT111: Principle of Accounting

5.
)

10,000

M.A. Perez

FOB Destination, 2/10,

n/30

Problem 18
The Sel Co. sold merchandise to Bun Co. on October 1, 2012 at list price of P100,000, trade discount of 5% and 10%,
FOB destination. Cash discount terms: 3/eom, n/60. Bun Co. paid the freight on October 5, 2012 amounting to P5,000.
Because defective merchandise amounting to P3,000 was erroneously delivered, the Sel Co. issued a credit
memorandum to Bun Co. on October 7, 2012. Bun Co. paid in full the balance due on October 31, 2012.
Required: Journalize the above transactions on the books of Sel Company and Bun Company. Show computations.
Omit explanations.
Sel Companys Journal Book
Date

Particulars

Debit

Bun Companys Journal Book

Credit

Date

Particulars

Debit

Credi
t