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…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 9RE: RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of...

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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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