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Practice Problem 1

The document provides a list of transactions from March 2016 for the Mariano Lerin Bookstore. It includes purchases and sales of merchandise on account and for cash, receipt and payment of freight charges, returns, credits issued and payments received. The required task is to prepare journal entries for these transactions assuming a perpetual inventory system and a periodic inventory system, with cost of goods sold for each sale calculated at 50% of the selling price.

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3K views

Practice Problem 1

The document provides a list of transactions from March 2016 for the Mariano Lerin Bookstore. It includes purchases and sales of merchandise on account and for cash, receipt and payment of freight charges, returns, credits issued and payments received. The required task is to prepare journal entries for these transactions assuming a perpetual inventory system and a periodic inventory system, with cost of goods sold for each sale calculated at 50% of the selling price.

Uploaded by

Desree Gale
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ABM 123 DONELAN

FUNDAMENTALS OF ACCOUNTANCY, BUSINESS & MANAGEMENT 2


PRACTICE PROBLEM 1

Journalizing Merchandising Transactions

Transactions for the Mariano Lerin Bookstore for March 2016 follows:

Mar 2 Purchased merchandise on credit from Digao Publishers, terms 2/10, n/30, FOB
destination, P74,000.
3 Sold merchandise on credit to Detoya Books Shop, terms 1/10, n/30, FOB
shipping point, P10,000.
5 Sold merchandise for cash, P7,000.
6 Purchased and received merchandise on credit from Made Easy Bookstore,
terms 2/10, n/30, FOB shipping point, P42,000.
7 Received freight bill from Super Express from shipment received on March 6,
P570.
9 Sold merchandise on credit to Recoletos Books, terms 1/10, n/30, FOB
destination, P38,000.
10 Purchased merchandise from Digao Publishers, terms 2/10, n/30, FOB shipping
point, P26,500, including freight costs of P500.
11 Received freight bill from Super Express for sale on March 9, P291.
12 Paid Digao Publishers for purchase of March 2.
13 Received payment in full for Detoya Books Shop’s purchase of March 3.
14 Paid Made Easy Bookstore half the amount owed on the March 6 purchase. A
discount is allowed on partial payment.
15 Returned faulty merchandise worth P3,000 to Digao Publishers for credit against
purchase of March 10.
16 Purchased office supplies from Olamit Supplies for P4,780, terms n/10.
17 Received payment from Recoletos Books for half of the purchase of March 9. A
discount is allowed on partial payment.
18 Paid Digao Publishers in full for amount owed on purchase of March 10, less
return on March 15.
19 Sold merchandise to Sir Ed Trading on credit, terms 2/10, n/30, FOB shipping
point, P7,800.
20 Returned for credit several items of office supplies purchased on March 16,
P1,280.
22 Issued a credit memo to Sir Ed Trading for returned merchandise, P1,800.
25 Paid for purchase of March 16, less returns on March 20.
26 Paid freight entity for freight charges for March 7 and 11.
27 Received payment of amount owed by Sir Ed Trading for purchase of March 19,
less credits of March 22.
28 Paid Made Easy Bookstore for the balance on the March 6 purchase.
31 Sold merchandise for cash, P9,730.

REQUIRED: Prepare the journal entries assuming the entity uses:


(a) perpetual inventory system and
(b) periodic inventory system.

For the cost of goods sold in each sale transaction, assume that the cost of goods sold is 50% of the selling price.
This is applicable to all sales transaction.

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