Exercise 2

The Merchandise Inventory of Pilipinas Marketing on June 30 , 20X1 is P 800,000 . following are the transaction

July 1 - Purchased merchandise on account from Agoncillo Trading , 1,000,000 . Terms : 3/10, n/30 ,

Fob destination .

3 – Purchased merchandise on account from Bonifacio Trading , 1,100,000 . Terms : 5/10, n/30 .

4 - Returned defective merchandise to Agoncillo Trading , 10,000 .

5 - Sold merchandise on account to Katipunan Merchandising 1,100,000 . terms : 3/10, n/30 ;

FOB destination . The cost of merchandise sold is 1,000,000 .

10 – Paid in full the account due to Agoncillo Trading .

10 – Sold merchandise on account to Kalayaan Merchandising 1,210,000 . Terms : 5/10, n/30 .

The cost of merchandise sold is 1,100,000 .

11 – Received defective merchandise from Katipunan Merchandising , 11,000 . The cost of the

Defective merchandise received is 10,000 .

12 - Paid in full the account due to Bonifacio .

15 – Collected in full the account due from Katipunan Merchandising .

20 – Collected in full the account due from Kalayaan Merchandising .

22 – Purchased merchandise on account from Del Pilar Trading , 1,200,000 . Terms : 20 , n/30 ,

FOB destination , freight collect . Paid charge for freight , 3,000 .

25 – Sold merchandise on account to Katarungan Merchandising 1,320,000 . Terms : 20,n/30,

FOB destination , freight prepaid . Paid charge for freight 4,000 . The cost of
 Merchandise sold is 960,000 .

27 - Purchased merchandise on account from Gabriela Trading , 1,500,000 . Terms 20 and 5 ,

n/30 ,FOB Shipping point , freight collect . Paid charge for freight , P 5,000 .

30 - Sold merchandise on account to Kapayapaan Merchandising P 1,650,000. Terms :

20 and 5 , n /30 . FOB shipping point , freight collect . The cost of merchandise sold is

1,140,000 .

31 – Actual count of merchandise inventory on hand , 719,300 .

Required :

1. Prepare the journal entries applying a) Periodic Inventory System b) Perpetual Inventory System

2. Prepare a ledger for Merchandise Inventory account and post the entries

3. Determine the inventory loss , if any .

,000 . following are the transactions for the month of July 20X1 .

000 . Terms : 3/10, n/30 ,

000 . Terms : 5/10, n/30 .

000 . terms : 3/10, n/30 ;

00 . Terms : 5/10, n/30 .

, 11,000 . The cost of the

0,000 . Terms : 20 , n/30 ,

0,000 . Terms : 20,n/30,

. The cost of
00,000 . Terms 20 and 5 ,

1,650,000. Terms :

f merchandise sold is

etual Inventory System

 `

PERIODIC INVENTORY SYSTEM

July 01, 20X1 Purchases

Accounts Payable - Agoncillo Trading

July 03, 20X1 Purchases

Accounts Payable - Bonifacio Trading

July 04, 20X1 Accounts Payable - Agoncillo Trading

Purchase Returns and Allowances

July 05, 20X1 Accounts Receivable - Katipunan Merchandising

Sales

July 10, 20X1 Accounts Payable - Agoncillo Trading

Purchase Discounts
Cash

Invoice Price
Less: Returns

Less: Discounts (5%)

Net Price

July 10, 20X1 Accounts Receivable - Kalayaan Merchandising

Sales

July 11, 20X1 Sales Returns & Allowances

Accounts Receivable - Katipunan Merchandising
July 12, 20X1 Accounts Payable - Bonifacio Trading
Purchase Discounts
Cash

Invoice Price
Less: Returns

Less: Discounts (5%)

Net Price

July 15, 20X1 Cash

Sales Discount
Accounts Receivable - Katipunan Merchandising

Invoice Price
Less: Returns

Less: Discounts (3%)

Net Price

July 20, 20X1 Cash

Sales Discount
Accounts Receivable - Kalayaan Merchandising

Invoice Price
Less: Returns

Less: Discounts (5%)

Net Price

July 22, 20X1 Purchases

Accounts Payable- Del Pilar Trading
Accounts Payable- Del Pilar Trading
Cash

List Price
Less:Trade Discount 20%
 Invoice Price

July 25, 20X1 Accounts Receivable -Katarungan Merchandising

Freight-Out
Sales
Cash

List Price
Less:Trade Discount 20%
Invoice Price

July 27, 20X1 Purchases

Freight- In
Accounts Payable - Gabriela Trading
Cash

List Price
Less: 1st Trade Discount 20%

Less: 2nd Trade Discount 5%

Invoice Price

July 30, 20X1 Accounts Receivable - Kapayapaan Merchandising

Sales

July 30, 20X1 Merchandise Inventory, end

Income & Expense Summary
Merchandise Inventory, beg
YSTEM PERPETUAL INVENTORY SYS

1,000,000.00 July 01, 20X1 Merchandise Inventory

1,000,000.00

1,100,000.00 July 03, 20X1 Merchandise Inventory

1,100,000.00

10,000.00 July 04, 20X1 Accounts Payable - Agoncillo Trading

10,000.00

1,100,000.00 July 05, 20X1 Accounts Receivable - Katipunan Merchandising

1,100,000.00

Cost of Sales

990,000.00 July 10, 20X1 Accounts Payable - Agoncillo Trading

49,500.00
940,500.00

1,000,000.00
10,000.00
990,000.00
49,500.00
940,500.00

1,210,000.00 July 10, 20X1 Accounts Receivable - Kalayaan Merchandising

1,210,000.00

Cost of Sales

11,000.00
11,000.00 July 11, 20X1 Sales Returns & Allowances
 Merchandise Inventory

1,100,000.00 July 12, 20X1 Accounts Payable - Bonifacio Trading

55,000.00
1,045,000.00

1,100,000.00
-
1,100,000.00
55,000.00
1,045,000.00

1,056,330.00 July 15, 20X1 Cash

32,670.00 Sales Discount
1,089,000.00

1,100,000.00
11,000.00
1,089,000.00
32,670.00
1,056,330.00

1,149,500.00 July 20, 20X1 Cash

60,500.00 Sales Discount
1,210,000.00

1,210,000.00
-
1,210,000.00
60,500.00
1,149,500.00

960,000.00 July 22, 20X1 Merchandise Inventory

3,000.00 Accounts Payable- Del Pilar Trading
960,000.00
3,000.00

1,200,000.00
240,000.00
 960,000.00

1,056,000.00 July 25, 20X1 Accounts Receivable -Katarungan Merchandising

4,000.00 Freight-Out
1,056,000.00
4,000.00

Cost of Sales
1,320,000.00
264,000.00
1,056,000.00

1,140,000.00 July 27, 20X1 Merchandise Inventory

5,000.00 Merchandise Inventory
1,140,000.00
5,000.00

1,500,000.00
300,000.00
1,200,000.00
60,000.00
1,140,000.00

1,650,000.00 July 30, 20X1 Accounts Receivable - Kapayapaan Merchandising

1,650,000.00

Cost of Sales

719,300.00 July 30, 20X1

- 80,700.00
800,000.00
 PERPETUAL INVENTORY SYSTEM

Merchandise Inventory 1,000,000.00

Accounts Payable - Agoncillo Trading 1,000,000.00

Merchandise Inventory 1,100,000.00

Accounts Payable - Bonifacio Trading 1,100,000.00

Accounts Payable - Agoncillo Trading 10,000.00

Merchandise Inventory 10,000.00

Accounts Receivable - Katipunan Merchandising 1,100,000.00

Sales 1,100,000.00

Cost of Sales 1,000,000.00

Merchandise Inventory 1,000,000.00

Accounts Payable - Agoncillo Trading 990,000.00

Merchandise Inventory 49,500.00
Cash 940,500.00

Accounts Receivable - Kalayaan Merchandising 1,210,000.00

Sakes 1,210,000.00

Cost of Sales 1,100,000.00

Merchandise Inventory 1,100,000.00

Sales Returns & Allowances 11,000.00

Accounts Receivable - Katipunan Merchandising 11,000.00
Merchandise Inventory 10,000.00
Cost of Sales 10,000.00

Accounts Payable - Bonifacio Trading 1,100,000.00

Merchandise Inventory 55,000.00
Cash 1,045,000.00

1,056,330.00
Sales Discount 32,670.00
Accounts Receivable - Katipunan Merchandising 1,089,000.00

1,149,500.00
Sales Discount 60,500.00
Accounts Receivable - Kalayaan Merchandising 1,210,000.00

Merchandise Inventory 960,000.00

Accounts Payable- Del Pilar Trading 3,000.00
Accounts Payable- Del Pilar Trading 960,000.00
Cash 3,000.00
Accounts Receivable -Katarungan Merchandising 1,056,000.00
Freight-Out 4,000.00
Sales 1,056,000.00
Cash 4,000.00

Cost of Sales 960,000.00

Merchandise Inventory 960,000.00

Merchandise Inventory 1,140,000.00

Merchandise Inventory 5,000.00
Accounts Payable - Gabriela Trading 1,140,000.00
Cash 5,000.00

Accounts Receivable - Kapayapaan Merchandising 1,650,000.00

Sales Sales

Cost of Sales 1,140,000.00

Merchandise Inventory 1,140,000.00
 PERIODIC INVENTORY SYSTEM

General Ledger: Merchandise Inventory

Date Particulars PR Debit Credit

20X1
Jul-01 Balance forwarded, 07-31-x0
Jul-30 Adjusting entry 80,700.00 800,000.00

PERPETUAL INVENTORY SYSTEM

General Ledger: Merchandise Inventory

Date Particulars PR Debit Credit

20X1
Jul-01 Balance forwarded, 07-31-x0
Jul-01 Agoncillo Trading, Terms: 3/10, n/30 1,000,000.00
Jul-03 Bonifacio Trading, Terms: 5/10, n/30 1,100,000.00
Jul-04 Purchase Returns 10,000.00
Jul-05 Cost of Sales 1,000,000.00
Jul-10 Purchase Discounts 49,500.00
Jul-10 Cost of Sales 1,100,000.00
Jul-11 Sales returns from Katipunan M. 10,000.00
Jul-12 Purchase Discounts 55,000.00
Jul-22 Del Pilar Trading, Terms: 20, n/30 960,000.00
Jul-25 Cost of Sales 960,000.00
Jul-27 Gabriela, Trading, Terms: 20 and 5, n/30 1,140,000.00
Jul-27 Freight-In 5,000.00
Jul-30 Cost of Sales 1,140,000.00
M

Balance
Debit Credit

800,000.00
80,700.00

EM

Balance
Debit Credit

800,000.00
1,800,000.00
2,900,000.00
2,890,000.00
1,890,000.00
1,840,500.00
740,500.00
750,500.00
695,500.00
1,655,500.00
695,500.00
1,835,500.00
1,840,500.00
700,500.00