The following were selected from among the transactions completed by Greco Co. during the current year. Greco Co. sells and installs home and business security systems. It uses the periodic inventory system and the allowance method in accounting for its uncollectible accounts receivables. Jan 08 Loaned P6,000 cash to Mark Tift, receiving a 90-day, 8% note. Feb 12 Purchased merchandise on account from Gwyn Co., list price P25,000. Trade discount 5%. Terms: 2/10, n/60. Mar 20 Wrote off a P1,000 account from Rodel Co as uncollectible. Apr 03 Sold merchandise on account to Messina and Son, P18,000. Terms: 3/5, 2/10, 1/15, n/45. Apr 08 Mark Tift dishonored the note. Apr 13 Issued a 60-day, 12% note for the Feb 12 transaction. Accepted a 30-day, 12% note for the Apr 03 transaction. May 18 Jun 07 Received from Mark Tift the amount owed on the dishonored note, plus interest from the date the note was dishonored until the payment date at 10% on the maturity value of the note. Settled the note due for Gwyn Co. Jun 12 Jun 17 Aug 23 Oct 02 Nov 16 Dec 31 Received from Messina and Son the amount due on the note. Reinstated the account of Rodel Co and received full payment. Issued a 120-day, 12% note for P50,000 to Khen Co. on account. Accepted a 60-day, 12% note for P30,000 from Vincent Co. on account. It is estimated that 2% of credit sales for the year ended December 31 will be uncollectible. The following data were gathered: Net sales is P2,000,000. Sales returns and allowances is 300,000. Sales discount is 200, 000. Credit sales is 90% of net sales. Instructions: a. Journalize the entries. Omit explanations but show your solutions. b. Create adjusting entries. c. Assume the note to Khen and Vincent were settled and paid respectively on their due dates, provide the journal entries.
The following were selected from among the transactions completed by Greco Co. during the current year. Greco Co. sells and installs home and business security systems. It uses the periodic inventory system and the allowance method in accounting for its uncollectible accounts receivables. Jan 08 Loaned P6,000 cash to Mark Tift, receiving a 90-day, 8% note. Feb 12 Purchased merchandise on account from Gwyn Co., list price P25,000. Trade discount 5%. Terms: 2/10, n/60. Mar 20 Wrote off a P1,000 account from Rodel Co as uncollectible. Apr 03 Sold merchandise on account to Messina and Son, P18,000. Terms: 3/5, 2/10, 1/15, n/45. Apr 08 Mark Tift dishonored the note. Apr 13 Issued a 60-day, 12% note for the Feb 12 transaction. Accepted a 30-day, 12% note for the Apr 03 transaction. May 18 Jun 07 Received from Mark Tift the amount owed on the dishonored note, plus interest from the date the note was dishonored until the payment date at 10% on the maturity value of the note. Settled the note due for Gwyn Co. Jun 12 Jun 17 Aug 23 Oct 02 Nov 16 Dec 31 Received from Messina and Son the amount due on the note. Reinstated the account of Rodel Co and received full payment. Issued a 120-day, 12% note for P50,000 to Khen Co. on account. Accepted a 60-day, 12% note for P30,000 from Vincent Co. on account. It is estimated that 2% of credit sales for the year ended December 31 will be uncollectible. The following data were gathered: Net sales is P2,000,000. Sales returns and allowances is 300,000. Sales discount is 200, 000. Credit sales is 90% of net sales. Instructions: a. Journalize the entries. Omit explanations but show your solutions. b. Create adjusting entries. c. Assume the note to Khen and Vincent were settled and paid respectively on their due dates, provide the journal entries.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 1
The following were selected from among the transactions completed by Greco Co. during the current
year. Greco Co. sells and installs home and business security systems. It uses the periodic inventory
system and the allowance method in accounting for its uncollectible accounts receivables.
Loaned P6,000 cash to Mark Tift, receiving a 90-day, 8% note.
Jan 08
Feb 12
Purchased merchandise on account from Gwyn Co., list price P25,000.
Trade discount 5%. Terms: 2/10, n/60.
Mar 20
Wrote off a P1,000 account from Rodel Co as uncollectible.
Apr 03
Sold merchandise on account to Messina and Son, P18,000. Terms: 3/5,
2/10, 1/15, n/45.
Apr 08
Mark Tift dishonored the note.
Apr 13
Issued a 60-day, 12% note for the Feb 12 transaction.
Accepted a 30-day, 12% note for the Apr 03 transaction.
May 18
Jun 07
Received from Mark Tift the amount owed on the dishonored note, plus
interest from the date the note was dishonored until the payment date at
10% on the maturity value of the note.
Settled the note due for Gwyn Co.
Jun 12
Jun 17
Aug 23
Oct 02
Nov 16
Dec 31
Received from Messina and Son the amount due on the note.
Reinstated the account of Rodel Co and received full payment.
Issued a 120-day, 12% note for P50,000 to Khen Co. on account.
Accepted a 60-day, 12% note for P30,000 from Vincent Co. on account.
It is estimated that 2% of credit sales for the year ended December 31 will
be uncollectible. The following data were gathered:
Net sales is P2,000,000.
Sales returns and allowances is 300,000.
Sales discount is 200, 000.
Credit sales is 90% of net sales.
Instructions:
a. Journalize the entries. Omit explanations but show your solutions.
b. Create adjusting entries.
c. Assume the note to Khen and Vincent were settled and paid respectively on their due dates,
provide the journal entries.
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