ACC 1 – FINANCIAL ACCOUNTING AND REPORTING

QUIZ NO. 14 – Accounting Cycle of a Merchandising Business (Application)

“Integrity is doing the right thing, even when no one is watching.” – C.S. Lewis

INSTRUCTIONS: Read and analyze carefully the problem given below, and accomplish the
requirements that follow. Write your answers on two-column journals. Write legibly and avoid erasures.
Good luck!

Quality Computer Sales completed the following transactions in the month of September 2018: (Cost of
goods sold is 60% of the invoice price)

September 1 Purchased merchandise on account, ₱200,000; terms: 20; 3/15, n/30, FOB shipping
point, freight collect, ₱5,000.
September 3 Purchased a new computer for office use on credit for ₱100,000.
September 6 Sold merchandise on credit; list price ₱500,000. Terms: 10; 5/15, n/30, FOB
destination, freight collect, ₱25,000.
September 7 Purchased merchandise for cash, ₱150,000, FOB destination, freight prepaid,
₱1,500.
September 8 Sold merchandise for cash, ₱300,000. Transportation cost is ₱3,000, FOB shipping
point, freight collect.
September 10 Purchased merchandise on credit; terms 2/15, n/30; ₱26,000, FOB destination,
freight prepaid, ₱900.
September 12 Received ₱4,000 credit memorandum for merchandise purchased on September 10
and returned for credit.
September 15 Purchased merchandise on account, ₱300,000; terms: 20, 10; 5/10, n/30, FOB
destination, freight collect, ₱10,000.
September 19 Sold merchandise on credit, ₱24,600. Terms: 2/10, n/30; FOB destination, freight
collect, ₱1,000.
September 21 Collected sales for September 6.
September 22 Issued a ₱335 credit memorandum to customer who had returned a portion of the
merchandise purchased on September 19.
September 23 Purchased office supplies on credit, ₱2,950.
September 24 Received credit memorandum of ₱700 for unsatisfactory quality of office supplies
purchased on September 23 and returned for credit.
September 25 Paid for the merchandise purchased on September 10.
September 26 Paid the purchases made on September 15.
September 29 Received payment for the merchandise sold on September 19.
September 30 Purchased merchandise on account ₱100,000. Terms: 2/10; n/30, FOB shipping
point, freight prepaid, ₱1,000.

Requirements: Prepare the general journal entries of the above transactions using the:
1. Perpetual inventory method
2. Periodic inventory method
---END OF QUIZ NO.14---
“Even if you’re on the right track, you’ll get run over if you just sit there.” – Will Rogers

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