Case 2

The following selected transactions occurred during the month of March

for Zian Trading:

DATE TRANSACTION
March 1 Bought goods costing P6,500 on credit from Marimar Trading. Terms
2/10, n/30
2 Sold merchandise on account to Billy Trading, P5,000 terms 3/10
EOM.
3 Paid freight on the purchase made last March 1, P300.
4 Sold merchandise for cash P12,600.
4 Paid freight on the above sale, P256.
5 Bought goods with a list price of P5,000 terms COD with trade
discount of 8%.
6 Received a 30-day 6% note from Cortez for merchandise sold, P6,000.
6 Bought tables on account from Lourdes Furniture, P4,000 terms 3/20,
n/40.
7 Cash sales, P12,500.
8 Cash purchases, P8,400.
8 Bought goods from Zorro Trading, P10,000 terms 2/10 EOM.
8 Issued a 60-day 6% note for P2,000 from merchandise bought from
Oca Trading.
10 Bought goods from Alex Company, P7,000 terms 3/10, 2/15, n/45.
11 Sold goods to Costa Enterprise, P11,000 terms 1/10, n/30.
12 Received a cash refund for merchandise returned to a supplier, P650.
13 Gave a cash refund to a customer for defective merchandise
returned, P800.
14 Bought merchandise from Rumars with a list price of P10,000 terms
2/10, n/30 with trade discount of 5% and 2%.
21 Collected the account of Costa Enterprises in full (see transaction
dated March 11).
24 Paid account of Alex Company in full (see transaction dated March
10).
25 Sold merchandise to Santos, terms COD with a list price of P8,000
with trade discount of 10% and 5%, exclusive of freight charges of
P230.
25 Returned defective tables to Lourdes Furniture (see transaction dated
 March 6), P500.
25 Returned defective merchandise to Zorro Trading, P200 (see
transaction dated March 8).
27 Paid the account of Zorro Trading in full (see transactions dated
March 8 and 25).
28 Collected the note of Cortez, together with the interest (see
transaction dated March 6).
28 Paid the note issued to Oca Trading in full together with the interest
(see transaction dated March 8).
29 Billy Trading returned goods, P1,000 (see transaction dated March 2).
30 Billy Trading paid its account in full (see transaction dated March 2
and 29).

Requirement:

Journalize the above transactions under the:

1. Periodic inventory system:

Date Journal Entries Debit Credit

20x0
March 1 Purchases 6,500
Accounts Payable- Marimar Trading 6,500
Bought Goods on Account ,terms
2/10, n/30
2 Accounts Receivable- Billy Trading 5,000
Sales 5,000
Sold Merchandising on Account,
terms: 3/10
3 Freight In 300
Cash 300
Paid Freight
4 Cash 12,60
Sales 0 12,60
Sold Merchandise on Cash 0
4 Freight Out 256
Cash 256
Paid Freight
5 Purchases 4,600
Cash 4,600
Bought Goods with TD 8%
6 Notes Receivable-Cortez 6,000
 Sales 6,000
Sold Merchandise and Issued Notes
6 Furniture and Fixtures 4,000
Accounts Payable-Lourdes 4,000
Furniture
Bought Table on Account, Terms 3/20,
n/40
7 Cash 12,50
Sales 0 12,50
Sold Merchandise on Cash 0
8 Purchases 8,400
Cash 8,400
Purchase Merchandise on Cash
8 Purchases 10,00
Accounts Payable- Zorro Trading 0 10,00
Bought Goods on Account, Terms 0
2/10, EOM
8 Purchases 2,000
Notes Payable- Oca Trading 2,000
Bought Merchandise and Issued Note
10 Purchases 7,000
Accounts Payable- Alex Company 7,000
Bought Goods on Account, Terms
3/10, 2/15, n/45
11 Accounts Receivable- Costa 11,00
Enterprise 0 11,00
Sales 0
Sold Merchandise on Account, Terms,
1/10, n/30
12 Cash 650
Merchandise Inventory 650
Receive Cash Refund on Defective
Goods
13 Sales Returns and Allowances 800
Cash 800
Gave Cash Refund on Buyer for
Defective Goods
14 Purchases 9,310
Accounts Payable- Rumars 9,310
Bought Merchandise on Account,
Terms, 2/10, n/30
21 Cash 10,89
Sales Discount 0
Accounts Receivable- Costa 110 11,00
Enterprise 0
 Received Cash Payment
24 Accounts Payable- Alex Company 7,000
Purchase Discount 140
Cash 6,860
Paid Cash on Alex Company and
Received Discount
25 Cash 6,840
Sales 6,840
Sold Merchandise on Cash
25 Accounts Payable- Lourdes Furniture 500
Furniture and Fixtures 500
Returned of Defective Merchandise
25 Accounts Payable- Zorro Trading 200
Purchases 200
Returned of Defective Merchandise
27 Accounts Payable- Zorro Trading 9,800
Cash 9,800
Paid Cash on Zorro Trading
28 Cash 6,360
Notes Receivable- Cortez 6,360
Received Cash on Customer Account
28 Notes Payable- Oca Trading 2,120
Cash 2,120
Paid Cash on Oca Trading
29 Sales Returns and Allowances 1,000
Accounts Receivable- Billy Trading 1,000
Received Defective Goods from
Buyer
30 Cash 4,000
Accounts Receivable- Billy Trading 4,000
Received Cash from Customer

2. Perpetual inventory system

Date Journal Entries Debit Credit

20x0
March 1 Merchandise Inventory 6,500
Accounts Payable- Marimar Trading 6,500
Bought Goods on Account ,terms
2/10, n/30
2 Accounts Receivable- Billy Trading 5,000
Sales 5,000
Sold Merchandising on Account,
terms: 3/10
 Cost of Goods Sold 5,000
Merchandise Inventory 5,000
To Transfer Cost of Merchandise Sold
to Cost of Goods Sold Account
3 Merchandise Inventory 300
Cash 300
Paid Freight on Previous Purchase
4 Cash 12,60
Sales 0 12,60
Sold Merchandise on Cash 0

Cost of Goods Sold

Merchandise Inventory 12,60
To Transfer Cost of Merchandise Sold 0 12,60
to Cost of Goods Sold Account 0
4 Freight Out 256
Cash 256
Paid Freight
5 Merchandise Inventory 4,600
Cash 4,600
Bought Goods with TD 8%
6 Notes Receivable-Cortez 6,000
Sales 6,000
Sold Merchandise and Received
Notes
6,000
Cost of Goods Sold 6,000
Merchandise Inventory
To Transfer Cost of Merchandise Sold
to Cost of Goods Sold Account
6 Furniture and Fixtures 4,000
Accounts Payable-Lourdes 4,000
Furniture
Bought Table on Account, Terms 3/20,
n/40
7 Cash 12,50
Sales 0 12,50
Sold Merchandise on Cash 0

Cost of Goods Sold

Merchandise Inventory 12,50
To Transfer Cost of Merchandise Sold 0 12,50
to Cost of Goods Sold Account 0
8 Merchandise Inventory 8,400
Cash 8,400
 Purchase Merchandise on Cash
8 Merchandise Inventory 10,00
Accounts Payable- Zorro Trading 0 10,00
Bought Goods on Account, Terms 0
2/10, EOM
8 Merchandise Inventory 2,000
Notes Payable- Oca Trading 2,000
Bought Merchandise and Issued Note
10 Merchandise Inventory 7,000
Accounts Payable- Alex Company 7,000
Bought Goods on Account, Terms
3/10, 2/15, n/45
11 Accounts Receivable- Costa 11,00
Enterprise 0 11,00
Sales 0
Sold Merchandise on Account, Terms,
1/10, n/30

Cost of Goods Sold 11,00

Merchandise Inventory 0 11,00
To Transfer Cost of Merchandise Sold 0
to Cost of Goods Sold Account
12 Cash 650
Merchandise Inventory 650
Receive Cash Refund on Defective
Goods
13 Sales Returns and Allowances 800
Cash 800
Gave Cash Refund on Buyer for
Defective Goods
14 Merchandise Inventory 9,310
Accounts Payable- Rumars 9,310
Bought Merchandise on Account,
Terms, 2/10, n/30
21 Cash 10,89
Sales Discount 0
Accounts Receivable- Costa 110 11,00
Enterprise 0
Received Cash Payment
24 Accounts Payable- Alex Company 7,000
Merchandise Discount 140
Cash 6,860
Paid Cash on Alex Company and
Received Discount
25 Cash 6,840
Sales 6,840
 Sold Merchandise on Cash
25 Accounts Payable- Lourdes Furniture 500
Furniture and Fixtures 500
Returned of Defective Merchandise
25 Accounts Payable- Zorro Trading 200
Merchandise Inventory 200
Returned of Defective Merchandise
27 Accounts Payable- Zorro Trading 9,800
Cash 9,800
Paid Cash on Zorro Trading
28 Cash 6,360
Notes Receivable- Cortez 6,360
Received Cash on Customer Account
28 Notes Payable- Oca Trading 2,120
Cash 2,120
Paid Cash on Oca Trading
29 Sales Returns and Allowances 1,000
Accounts Receivable- Billy Trading 1,000
Received Defective Goods from
Buyer
1,000
Merchandise Inventory 1,000
Cost of Goods Sold
To Transfer Cost of Merchandise
Returned to Merchandised Inventory
30 Cash 4,000
Accounts Receivable- Billy Trading 4,000
Received Cash from Customer