PROBLEM #2

On January 1, 2019, Entity A had an inventory balance of 9,000.

The following transactions affected Entity A's inventory during the year:
i. Purchased goods woth 130,000 on account.
ii. Paid freight of 5,000 on the purchased above.
iii. Returned damaged goods worth 3,000 to the supplier.
iv. Sold goods costing 128,000 for 320,000, on credit.
v. A customer returned goods with sale price of 2,500, and cost of 1,000.

JOURNAL ENTRIES

PERPETUAL INVENTORY SYSTEM PERIODIC INVENTORY SYSTEM

Inventory 130,000 Purchases 130,000

Accounts Payable 130,000 Accounts Payable

Inventory 5,000 Freight-in 5,000

Cash 5,000 Cash

Accounts Payable 3,000 Accounts Payable 3,000

Inventory 3,000 Purchase Returns

Accounts Receivable 320,000 Accounts Receivable 320,000

Sales 320,000 Sales

Cost of goods sold 128,000 No Entry

Inventory 128,000

Sales returns 2,500 Sales Returns 2,500

Accounts Receivable 2,500 Accounts Receivable

Inventory 1,000 No Entry

Cost of goods sold 1,000

PROBLEM #3
Entity A had the following transactions during the period:
1. Purchased goods worth 90,000 on account.
2. paid transportation costs of 7,000 on the purchase above.
3. Returned damaged goods worth 2,000 to the supplier.
4. Sold goods costing 80,000 for 132,000 on account.
5. A customer returned goods with the sale price of 9,000 and cost of 6,000.

JOURNAL ENTRIES

PERPETUAL INVENTORY SYSTEM PERIODIC INVENTORY SYSTEM

Inventory 90,000 Purchases 90,000

Accounts Payable 90,000 Accounts Payable

Inventory 7,000 Freight-in 7,000

Cash 7,000 Cash

Accounts Payable 2,000 Accounts Payable 2,000

Inventory 2,000 Purchase Returns

Accounts Receivable 132,000 Accounts Receivable 132,000

Sales 132,000 Sales

Cost of goods sold 80,000 No Entry

Inventory 80,000

Sales returns 9,000 Sales Returns 9,000

Accounts Receivable 9,000 Accounts Receivable

Inventory 6,000 No Entry

Cost of goods sold 6,000

PROBLEM #4
Peaceful Morning Co. had a beginning inventory of 6,200.
The following transactions occurred during the period.
1. Purchased goods worth 120,000 on account.
2. Paid transportation costs of 12,000 on the purchase above.
3. Returned damaged goods worth 2,400 to the supplier.
4. Sold goods costing 98,400 for 147,600 on account.
5. A customer returned goods with sale price of 10,800 and cost of 7,200.

JOURNAL ENTRIES

PERPETUAL INVENTORY SYSTEM PERIODIC INVENTORY SYSTEM

Inventory 120,000 Purchases 120,000

Accounts Payable 120,000 Accounts Payable

Inventory 12,000 Freight-in 12,000

Cash 12,000 Cash
Accounts Payable 2,400 Accounts Payable 2,400
Inventory 2,400 Purchase Returns

Accounts Receivable 147,600 Accounts Receivable 147,600

Sales 147,600 Sales

Cost of goods sold 98,400 No Entry

Inventory 98,400

Sales returns 10,800 Sales Returns 10,800

Accounts Receivable 10,800 Accounts Receivable

Inventory 7,200 No Entry

Cost of goods sold 7,200
 MERCHANDISING BUSINESS

COMPUTATION FOR COST OF GOODS SOLD

ORY SYSTEM PERPETUAL INVENTORY SYSTEM PERIODIC INVENT

INVENTORY Beginning inventory

130,000 beg. bal. 9,000 Purchases (1)
(1) Purchases 130,000 Freight-in (2)
(2) Freight-in 5,000 Purchase returns (3)
5,000 128,000 (3) Purchase return Purchase discounts
128,000 (4) Cost of goods sold Net purchases
(5) Sales Return 1,000 Total goods available for sale
3,000 14,000 end. bal. Ending inventory
Cost of goods sold

320,000 COST OF GOODS SOLD

(4) Cost of goods sold 128,000 Sales
1,000 (5) Sales return Sales return
127,000 end. bal. Net Sales

2,500 Entity A
Statement of Cost of goods sold and Gross profit
For the period ended December 31, 2019

Sales 319,000
Cost of goods sold: 9,000
Add: Net purchases 132,000
Total goods available for sale 141,000
Less: Ending inventory -14,000 -127,000
Gross Profit ₱ 192,000.00
 COMPUTATION FOR COST OF GOODS SOLD

ORY SYSTEM PERPETUAL INVENTORY SYSTEM PERIODIC INVENT

INVENTORY Beginning inventory

90,000 beg. bal. ---- Purchases (1)
(1) Purchases 90,000 Freight-in (2)
(2) Freight-in 7,000 Purchase returns (3)
7,000 2,000 (3) Purchase return Purchase discounts
80,000 (4) Cost of goods sold Net purchases
(5) Sales Return 6,000 Total goods available for sale
2,000 21,000 end. bal. Ending inventory
Cost of goods sold

132,000 COST OF GOODS SOLD

(4) Cost of goods sold 80,000
6,000 (5) Sales return
74,000 end. bal.

9,000

COMPUTATION FOR COST OF GOODS SOLD

ORY SYSTEM PERPETUAL INVENTORY SYSTEM PERIODIC INVENT

INVENTORY Beginning inventory

120,000 beg. bal. 6,200 Purchases (1)
(1) Purchases 120,000 Freight-in (2)
(2) Freight-in 12,000 Purchase returns (3)
12,000 2,400 (3) Purchase return Purchase discounts
 98,400 (4) Cost of goods sold Net purchases
(5) Sales Return 7,200 Total goods available for sale
2,400 44,600 end. bal. Ending inventory
Cost of goods sold

147,600 COST OF GOODS SOLD

(4) Cost of goods sold 98,400
7,200 (5) Sales return
91,200 end. bal.

10,800
 PERIODIC INVENTORY SYSTEM

inning inventory 9,000

130,000
5,000
chase returns (3) -3,000
chase discounts ----
132,000
al goods available for sale 141,000
ing inventory -14,000
t of goods sold ₱ 127,000.00

320,000
-1,000
₱ 319,000.00

d Gross profit
 PERIODIC INVENTORY SYSTEM

inning inventory ----

90,000
7,000
chase returns (3) -2,000
chase discounts ----
95,000
al goods available for sale 95,000
ing inventory -21,000
t of goods sold ₱ 74,000.00

PERIODIC INVENTORY SYSTEM

inning inventory 6,200

120,000
12,000
chase returns (3) -2,400
chase discounts ----
 129,600
al goods available for sale 135,800
ing inventory -44,600
t of goods sold ₱ 91,200.00