7. The cost of goods sold is P 73,500. Beginning and ending inventory is P 19,000 and P 25,000 respectively.

If freight-in is P 3,
ANSWER: Purchases is 81,500

Beginning Inventory 19,000

Add: Net purchases 79,500
Cost of Goods available for sale 98, 500
Less: Ending inventory 25,000
Cost of Goods Sold 73,500

Cost of Goods Sold 73,500

Add: Ending Inventory 25,000
Cost of Goods available for sale 98,500
Less: Beginning inventory -19,000
Net purchases 79, 500
Add: Purchases discounts 5, 000
Less: Freight In -3,000
Purchases 81,500

8. The cost of goods available for sale is P 232,000. The gross profit is P 67,500. If net sales amounts to P 227,000 and n
ANSWER: Ending inventory is 72,500

Beginning Inventory
Add: Net purchases
Total: Available for sale 232, 000
Less: Ending Inventory 72, 500
Cost of Good Sold 159, 500

Net Sales 227, 000

Less: Cost of Good Sold 159, 500
Gross Profit 67, 500

9-10. Purchases P125,700; Sales, P 423,500; Purchase discount, P 3,785; Sales discount, P 5,765; Merchandise Inventory (begi
Selling expenses, P 78,575; Administrative expenses, P 68,475.
ANSWER: Gross profit is 284, 220
ANSWER: Net income is 137,170

Sales 423,500
Less: Sales Discount 5,765
Net sales
Less: Cost of good sold
Merchandise Inventory, Beginning 29,000
Purchases 125,700
Less: Purchase Discount 3,785
Net Purchases 121, 915
Cost of goods available for sale 150, 915
Ending inventory 17,400
Cost of good sold
Gross profit
Less: Selling expense 78, 575
Administration expense 68, 475
Total Expense
Less: Net Income

P 4,500 for freight and terms 3/15, n/30. Merchandise in the amount of
P 12,000 was returned, and the balance of the invoice was paid within the
discount period. How much cash was disbursed by Noy in full settlement of
ANSWER: B.70,460
80,000
Invoice price 84, 500 -12,000
Purchase return and allowances -12,000 x 3%
Purchase discount and allowances -2,040 2,040
Cash disbursed by Noy 70,460

15. If merchandise is sold on account to a customer for P 10,000, terms FOB shipping point, 1/10, n/30, and the seller prepay
P 500, the amount of the discount for early payment would be:
ANSWER: C. 100

10,000
x 10
100

10,000
500
-100
10,400

2- On October 5, of the current year, Masagana Trading Company pur

merchandise with a list price of P 85,000. The merchandise is subject t
discountRequired:
of 15%, 10%, 5%, with
Answer credit terms
the following of 2/10,based
questions n/30 from the ab

1. How much is the invoice price? 61, 773.75

85,000 x 15% x 10% x 5% = 61, 773.75
 2. At what amount should Masagana debit Purchases

3. How much is the trade discount? 23,226.25

Trade Discount = List price - Invoice Pcrie
85,000 - 61, 773.75 = 23,226.25

4. How much is the cash discount? 1, 235.48

61, 773.75 * 2% = 1, 235.48

5. Up to what date is the discount period?

Date of purchase + discounted days
Oct. 5 + 10 days = 15

6. If Masagana make payment on October 15, how much should i

pay in full settlement of its account? 60, 538.27

7. If payment is made on October 20, how much should Masagan

pay in full settlement of its October 5, account? 61, 773.75

4. EXERCISES
Income Summary 435,000
Merchandise Inventory, January 1, 2023 435,000

Merchandise Inventory, December 31, 2023 590,000

Income Summary 590,000

5. EXERCISES
A. The Allowance for Uncollectible Accounts has a credit balance of P 1,400 before adjustment.
Uncollectible Account 5,350
Less : Crdit Balance -1,400
Bad Debts 3,950

Bad Debts Expense 3,950

Allowance for uncollectible Accounts 3,950
to take up provision for the estimated uncollectible accounts

B. The Allowance for Uncollectible Accounts has a debit balance of P 1,400 before adjustment.

Bad Debts Expense 6,750

Allowance for uncollectible Accounts 6,750
To take up provision for the estimated uncollectible accounts
25,000 respectively. If freight-in is P 3,000 and purchase discount is P 5,000, what is the amount of purchases?

Purchases 81,500
Add: Freight In 3,000
Less: Purchase discount (5, 000)
Net purchase 79, 500

f net sales amounts to P 227,000 and net purchases is P 197,000, what is the amount of ending inventory?

, P 5,765; Merchandise Inventory (beginning), P29,000; Merchandise inventory (ending), P 17,400;

5; Administrative expenses, P 68,475.

417,735
 133,515
284,220

147,050
137, 170

erchandise in the amount of

invoice was paid within the
d by Noy in full settlement of

point, 1/10, n/30, and the seller prepays the transportation costs of
ly payment would be:

year, Masagana Trading Company purchased

P 85,000. The merchandise is subject to a trade
credit terms
ollowing of 2/10,based
questions n/30 from the above data.

rice? 61, 773.75

asagana debit Purchases 61, 773.75

count? 23,226.25

ount? 1, 235.48

ount period? October 15

nt on October 15, how much should it

account? 60, 538.27

ober 20, how much should Masagana

October 5, account? 61, 773.75

adjustment.

adjustment.