Question

QUESTION 1 Sansomite Sdn. Bhd. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of June, Sansomite's inventory consisted of 40 suitcases purchased at RM 30 each. During the month of July, the following merchandising transactions occurred. July. July. July. July July July. Purchased 60 suitcases on account for RM 30 each from Trunk Manufacturers Sdn. Bhd., terms 2/10, n/30. 3 Sold 40 suitcases on account to Satchel World for RM 50 each, terms 1/10, n/30. 9 Paid Trunk Manufacturers Sdn. Bhd. in full. 11 Received payment in full from Satchel World. 17 Sold 30 suitcases on account to The Going Concern for RM 50 each, terms 1/10, n/30. 18 Purchased 60 suitcases on account for RM 1700 from Kingman Manufacturers Sdn. Bhd., FOB shipping point, terms 1/10, n/30. The appropriate party also made a cash payment of RM 100 for freight on this date. 20 Received RM 300 credit (including freight) for 10 suitcases returned to Kingman Manufacturers Sdn. Bhd. 21 Received payment in full from The Going Concern. 22 Sold 45 suitcases on account to Fly-By- Night Sdn. Bhd. for RM 50 each. 30 Paid Kingman Manufacturers in full. July July. July. July. Sansomite Sdn. Bhd. chart of accounts includes the following: Acet Acet Nbr Account title: Nbr Account title: 101 Cash 401 Sales 112 Accounts Receivable 4 12 Sales Returns and Allowances 120 Merchandise Inventory 414 Sales Discounts 201 Accounts Payable 505 Cost of Goods Sold REQUIRED: Journalize the transactions for the month of July for Sansomite Sdn. Bhd. using a perpetual inventory system.

Answer 1

Journal Entries in the books of Sansonite Sdn. Bhd.

Date Particulars Debit Credit

July 1 - Merchandise Inventory A/c --------------- Dr 1800

To Accounts Payable 1800

(Being entry for purchase on credit basis recorded)

July 3 - Accounts Receivable A/c ---------------- Dr 2000

To Merchandise Inventory 2000

(Being Credit Sales to Satchel World recorded)

July 9 - Accounts Payable A/c ----------------- Dr 1800

To Bank A/c 1764

To Sales Discounts 36

(Being amount paid in full and discount received recorded)

July 11 - Bank A/c ------------------------- ---------------Dr 1980

Sales Returns & Allowances A/c-----------Dr 20

To Accounts Receivable 2000

(Being amount received in full and discount allowed recorded)

July 17 - Accounts Receivable A/c ------------------Dr 1500

To Merchandise Inventory 1500

(Being sales made recorded)

July 18 - Merchandise Inventory A/c ---------------- Dr 1700

To Accounts Payable 1700

(Being entry for Purchases on account recorded)

July 18 - Freight A/c ---------------------------------------- Dr 100

To Cash 100

(Being Freight paid in cash recorded)

July 20 - Accounts Payable A/c ------------------------Dr 283.33

To Merchandise Inventory 283.33

(Being Entry for Purchase returns recorded)

July 21 - Bank A/c ---------------------------------------- Dr 1485

Sales Returns & Allowances A/c ---------- Dr 15

To Accounts Receivable 1500

(Being amount received in full and discount allowed recorded)

July 22 - Accounts Receivable A/c ---------------------- Dr 2250

To Merchandise Inventory A/c 2250

(Being entry for credit sales recorded)

July 30 - Accounts Payable A/c -------------------------- Dr 1416.67

To Bank A/c 1416.67

(Being Entry for full settlement recorded and no discount is allowed as time of payment exceeds the given time)

Notes - Appropriate adjustments with regards to discounts received or allowed are recorded in the entries where the payments have been received or made within the time to get the discount. In case of Kingsman Manufacturer Sdn. Bhd. Payment was made outside the credit period so there is no adjustment to the credit received.