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Exercises and problems - Merchandising Business
Bachelor of Science in Accountancy (University Of Cebu - Lapu-Lapu and Mandaue)
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ASSIGNMENT 10: MERCHANDISING BUSINESS
A. On January 12, Panglao Commercial bought merchandise from Loboc
Enterprises on credit, P100,000. Term: 2/10, n/30. P 20,000 cost of
merchandise was later returned and was not replaced. The credit memo was
dated January 15. Payment was made on January 20.
Required: Record the above transactions in the books of both buyer and seller.
BOOK OF PANGLAO COMMERCIAL
BOOK OF LOBOC ENTERPRISES
Jan. 12__________________________ Jan. 12 ________________________
__________________________
________________________
Jan. 15__________________________ Jan. 15 ________________________
__________________________
________________________
Jan. 20__________________________ Jan. 20 ________________________
___________________________
________________________
___________________________
________________________
B. Journalize the following selected transactions of Maria Cruz Trading for the
month of July.
Assume______________
Non-Vat Registered
VAT Registered
1.Bought merchandise on account
From Rene Cason Co.,P15,000.
_______________
_______________
________________
________________
________________
2. Sold merchandise in cash to Mr.
Neptalie Ylagan, P20,000.
_______________
______________
________________
________________
________________
3. Bought merchandise for cash from ______________
Jude Seares Enterprises, P60,000. ______________
________________
________________
________________
4. Sold merchandise on account to
Brigette Almario, P75,000.
______________
______________
________________
________________
________________
5. Paid in full the account with
Rene Cason Co.
______________
______________
________________
________________
________________
6. Collected in full the account of
Ms. Brigette Almario, P75,000.
______________
______________
________________
________________
________________
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- 2 7. Paid freight on purchases of
Merchandise, P 5,000.
______________
______________
__________________
__________________
8. Paid freight on sale of
Merchandise, P 5,000.
______________ __________________
______________ ___________________
9. Bought merchandise for cash and
Received a 5% trade discount,
P 20,000.
______________ ___________________
______________ ___________________
___________________
10. Sold Merchandise for cash and
Gave a 2% trade discount,
P 50,000.
_____________
_____________
___________________
___________________
___________________
C. The following selected account balances were taken from the records of Alex
Ajoc, the owner of Surigao Hardware & Construction Supply for the month of
December 20A. (VAT of 12 % is billed separately.)
Purchases
Purchase Returns & Allowances
Purchase Discounts
Sales
Sales Returns &Allowances
Sales Discounts
P710,000
5,000
20,000
1,020,000
8,000
25,000
Required:
1. Compute the input tax _______________
2. Compute the output tax ______________
3. Compute the VAT Payable ____________
4. Entry to close the Input and Output Tax
_________________________________
_________________________________
_________________________________
5. Entry to remit VAT Payable to Bureau of Internal Revenue
____________________________________
____________________________________
D. The following selected account balances were taken from the records of J.
Gucela Company, for the month of January 20B. (VAT of 12% is billed separately).
Purchases
P100,000
Purchase Returns & Allowances
10,000
Purchase Discounts
5,000
Sales
80,000
Sales Returns and Allowances
6,000
Sales Discounts
7,000
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Required:
1.
2.
3.
4.
Compute the Input Tax ______________________________
Compute the Output Tax _____________________________
Compute the Prepaid Tax ____________________________
Entry to close the Output Tax to Input Tax
_______________________________________________
_______________________________________________
_______________________________________________
5. Where do we show the Prepaid Tax in the Financial Statements?
________________________________
E. On June 1, 2020, Eleno Buray Forest Products sold merchandise with a
P120,000 list price.
Sales
Cash
Trade Discount
Credit Terms
Date Paid
Amount
Received
a.
30%
2/10, n/30
June 8
__________ ________
b.
40%
1/10, n/30
June 15
__________ ________
c.
2/10, n/30
June 11
__________ ________
d.
20%
1/15, n/30
June 14
__________ ________
e.
40%
n/30
June 28
__________ ________
Required: For each of the sales terms, determine the following:
1. The amount recorded as a sale.
2. The amount of cash received.
F. Renz Aguhob Fireworks engaged in the following purchase transactions during
the month. The entity observes the policy that all returns are made one day after the
goods are received, and that all purchases are paid within the discount period.
Purchase
Freight Returns & Credit
Trade
Cash
List Price FOB Terms
Charges Allowances Terms Discount Payment
P224,000 Shipping pt. P 4,000
P 21,000 2/10,n/30
30% _______
126,000 Destination
9,000
1/10,n/30
20% _______
90,000 Shipping pt.
2,000
7,000 2/10,n/30
_______
41,000 Shipping pt.
1,000
9,000
n/30
25% _______
357,000 Destination
14,000
24,000 3/10,n/30
20% ________
Required:
Using the table above, calculate the amount needed to settle each purchase.
G. The following information pertains to the Leopoldo Valdez School Chairs:
Transportation In
P 172,000
Merchandise Inventory, 1/1/2020
1,200,000
Merchandise Inventory, 12/31/2020
1,900,000
Purchases
4,300,000
Purchase Returns and Allowances
129,000
Purchase Discounts
215,000
Required: Prepare the cost of goods sold section of the income statement for the
year ended Dec. 31, 2020.
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H. On Feb. 18, 2020, a fire destroyed the merchandise inventory of Cristina
Santiago Shirts. The following information was available from the entity’s
accounting office:
Cost of Goods Sold
P 1,260,000
Transportation In
39,600
Merchandise Inventory, 1/1/2020
300,000
Purchase Discounts
26,400
Purchase Returns and Allowances
46,200
Purchases
1,320,000
Required: Compute the value of the lost merchandise. (Ending Merchandise
Inventory).
I. The partial income statements of five different companies are as follows:
Net Sales
1
a
2
d
Merchandise Inventory,1/1/2020
b
50,000
Net Cost of Purchases
Goods Available for Sale
e
80,000
110,000 160,00
0
Merchandise
Inventory,1/31/2020
f
Cost of Goods Sold
40,000
c
Gross Profit
50,000
140,00
0
3
4
250,000 290,00
0
70,000
j
g
h
160,00
0
k
30,000
n
70,000
230,000
l
i
40,000
160,00
0
Required: Replace the lettered blanks with the appropriate amounts.
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5
400,00
0
120,00
0
390,00
0
m
380,00
0
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