Prepare the Journal Entries for the following purchase transactions: I. Purchase of merchandise for cash: a. Merchandise is purchased for cash, P35,000 b. Merchandise listed at P50,000, subject to a trade discount of 10%, is purchased for cash. II. Purchase of merchandise on account: a. Merchandise purchased on account, credit terms 2/10, n/30, P40,000. b. Merchandise purchased on account, credit terms 3/10, n/30, P28,000. c. Payment is made on invoice (a) within the discount period. d, Payment is made on invoice (b) beyond the discount period.

Q: Merchandise subject to terms 3/10, n/25, FOB shipping point, is sold on account to a customer for…

A: When customers pay within the stated discount periods, sales discounts (if offered by sellers)…

Q: Determine the amount to be paid in full settlement of each purchase invoice, assuming that credit…

A: In the case of FOB Shipping point Amount to be paid = ( Purchases - Return ) * ( 1 - Discount rate )…

Q: he entry to record the receipt of payment within the discount period on a sale of $2400 with terms…

A: Terms 2/8, n/30 indicate that if the payment is made within 8 days discount shall be allowed at the…

Q: Describe each transaction. b. What was the invoice amount of the merchandise that was returned?

A: Accounts receivable:  It is a current asset of an organization. It is the amount due from customers…

Q: A sales invoice included the following information: merchandise price, P4,200; transportation, P320;…

A: Discount on payment = (sales - sales return) x discount rate = (4200-600)*1% = P36

Q: The journal entry to record the payment of merchandise on account with a discount under the Periodic…

A: Periodic inventory method: It is a inventory valuation method. In this method inventory account is…

Q: Merchandise is sold on account to a customer for $17,800, terms FOB shipping point, 1/10, n /30. The…

A: The credit terms is 1/10, n/30 which means if the payment has been paid within 10 days, then 1%…

Q: The amount of discount to be recorded if the invoice is paid within the discount period on a…

A: Trade discount is that discount which is being given to all the customers on the list price of the…

Q: Merchandise with a sales price of $1,100 is sold on account with terms 2/10, n/30. The journal entry…

A: 2/10, n/30 indicates that a discount of 2% will be given if payment is received within 10 days and…

Q: A sales invoice included the following information: merchandise price, $12,400; terms 1/10, n/eom,…

A: Concept of terms 1/10, n/eom: 1/10 means 1% discount is valid of the payment has been made within…

Q: Prepare general journal entries for the transactions above under the assumption that purchases are…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: Merchandise subject to terms 2/10, n/30, FOB shipping point, is sold on account to a customer for…

A: Given: Payments terms of 2/10, n/30, means that discount of 2% is valid for 10 days from the date of…

Q: Determining Amounts to be Paid on Invoices Determine the amount to be paid in full settlement of…

A: FOB shipping point and FOB destination point are two important terms using during the transfer of…

Q: Purchase-related transactions The Stationery Company purchased merchandise on account from a…

A: Perpetual inventory system is an effective inventory system which is used to record inventory in a…

Q: FN Trading recorded the following events involving a recent purchase of merchandise: Received goods…

A: SOLUTION- NET COST OF PURCHASE = (GROSS PURCHASE - PURCHASE RETURN) * (1-CASH DISCOUNT RATE) +…

Q: A sales invoice included the following information: merchandise price, $7,100; terms 1/10, n/eom;…

A: The amount of cash that should be received by the seller = Invoice price + Freight charges –…

Q: An invoice received included the following information: merchandise price, $12,000; terms 1/10,…

A: Invoice is a document on which all goods / services providing details are mentioned. It includes the…

Q: Determine the amount to be paid in full settlement of each invoice, assuming that credit for returns…

A: After the products are shipped from the seller's location, the buyer acquires ownership of them…

Q: Purchase transactions: Rolfes company purchased merchandise on account from Springhill Company for $…

A: Purchase discount is calculated by multiplying purchase less return by discount rate. 2/10, n/30…

Q: The buyer received an invoice from the seller for merchandise with list price of RO 7500 and credit…

A: Understanding the payment terms: The payment terms of 2/10 and n/30 means the discount of 2% is…

Q: If the Safe company sold merchandise on 2, April, for $2000 with terms of 2/10,N/30 ,and the…

A: We know that,  Prepaid insurance is a asset account and  Insurance expenses is an expense accounts.…

Q: An invoice received included the following information: merchandise price, $3,800; terms 1/10,…

A: Sales invoice:Sales invoice refers to the document which is used to inform the customer the amount…

Q: Merchandise with a sales price of $5,200 is sold on account with terms 2/10, n/30. The journal entry…

A: Journal Entry :— It is an act of recording transaction in books of account when transaction…

Q: A sales invoice included the following information: merchandise price, P4,100; transportation, P320;…

A: • FOB  ( Destination)shipping point : Its the responsibility of buyer to pay the shipping charges .…

Q: Using T accounts for Cash, Accounts Payable, Purchases, Purchases Returns and Allowances, Purchases…

A: T-account: The condensed form of a ledger is referred to as T-account. The left-hand side of this…

Q: A sales invoice included the following information: merchandise price, $11,800; terms 1/10, n/eom;…

A: Sales - Return = Net Sales  Merchandise Price = $11,800 Prepaid Freight  = $560  Merchandise…

Q: Journalize the following merchandise transactions: a. Sold merchandise on account, $21,950 with…

A: The objective of this question is to journalize the given merchandise transactions. Journalizing is…

Q: A sales invoice included the following information: merchandise price, $9,700; terms 1/10, n/eom,…

A: Sales invoice: Sales invoice refers to the document which is used to inform the customer the amount…

Q: The Stationery Company purchased merchandise on account from a supplier for $9,300, terms 1/10,…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: A sales invoice included the following information: merchandise price, $9,000; terms 1/10, n/eom;…

A: The seller is a person who sells the goods and would receive money for the goods sold.

Q: Determining Amounts to be Paid on Invoices Determine the amount to be paid in full settlement of…

A: The invoice is made against the account receivables.

Q: May 10 (a) 11 19 24 Purchased goods billed at $15,200 subject to cash discount terms of 2/10, n/60.…

A: The company purchases goods from suppliers and suppliers also offer a discount to the company. The…

Q: The amount of discount to be recorded if the invoice is paid within the discount period on a…

A: The cash discount would be calculated on the amount, after deducting the trade discount from list…

Q: Journalize the following merchandise transactions: (If an amount box does not require an entry,…

A: When an event occurs in the business and it can be measured and expressed in terms of money, it…

Q: Merchandise subject to terms 4/15, n/28, FOB shipping point, is sold on account to a customer for…

A: Merchandise subject to terms 4/15, n/28, means there will be a cash discount of 4% if payment is…

Q: The entry to record the sale of $20,000 of merchandise on account with cost of $14,000, would…

A: Sale of goods on credit Accounts receivable a/c or debtors a/c debit $20,000  To sales a/c $20,000…

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is