Company A began operations in the current year. The entity used perpetual inventory system. During the year, the company purchased merchandise having a gross invoice cost of P1,500,000. All purchases were made under the terms 5/10, n/30, FOB destination. Relative to this, the company paid freight expenses of P100,000. The company was able to pay 80% of the purchases within the discount period but the remaining purchases were paid beyond 10 days.70% of the purchases were sold for P1,200,000. Prepare journal entries to record the transactions using gross method and net method Company A began operations in the current year. The entity used perpetual inventory system.During the year, the company purchased merchandise having a gross invoice cost ofP1,500,000. All purchases were made under the terms 5/10, n/30, FOB destination. Relative tothis, the company paid freight expenses of P100,000.The company was able to pay 80% of the purchases within the discount period but theremaining purchases were paid beyond 10 days.70% of the purchases were sold for P1,200,000.Prepare journal entries to record the transactions using gross method and net method.

If the creditors pay their dues on time, they get the discount on their dues from the suppliers. The…

Answered: Company A began operations in the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company A began operations in the current year. The entity used perpetual inventory system.
During the year, the company purchased merchandise having a gross invoice cost of P1,500,000.
All purchases were made under the terms 5/10, n/30, FOB destination.
Relative to this, the company paid freight expenses of P100,000.
The company was able to pay 80% of the purchases within the discount period but the remaining purchases were paid beyond 10 days.
70% of the purchases were sold for P1,200,000.
Prepare journal entries to record the transactions using gross method and net method

Company A began operations in the current year. The entity used perpetual inventory system.
During the year, the company purchased merchandise having a gross invoice cost of
P1,500,000. All purchases were made under the terms 5/10, n/30, FOB destination. Relative to
this, the company paid freight expenses of P100,000.
The company was able to pay 80% of the purchases within the discount period but the
remaining purchases were paid beyond 10 days.
70% of the purchases were sold for P1,200,000.
Prepare journal entries to record the transactions using gross method and net method.

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