Question

Finance

XYY company began operations in the current year. The entity uses perpetual inventory system.

 

1.     During the year, company purchased merchandise having a gross invoice cost of P 1,000,000. All purchases were made under the terms 2/10, n/30. FOB shipping point.

2.     Fall paid freight charges of P 50,000.

3.     During the year, company paid for 80% of the merchandise within the discount period.

4.     The remaining 20% was paid beyond the discount period.

5.     company sold 70%  of the merchandise  it acquired  for cash of P 1,200,000. The other 30% remained in inventory at year end.

 

 

         REQUIRED: prepare journal entries to record the transactions using gross and net method.

 


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