QUIZ 6 - Finals-CASH AND Trade Discounts Calculations PDF

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QUIZ 6 – FINALS – TRADE AND CASH DISCOUNTS CALCULATIONS1 – On June 1, 2019, Chavez Forest Products sold merchandise with a P120,000 list price.Instructions: Fill the next two column the amount recorded as sale and the amount of cash to received by the seller (10 points)2 - On May 15, 2019, the Patel...

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QUIZ 6 – FINALS – TRADE AND CASH DISCOUNTS CALCULATIONS 1 – On June 1, 2019, Chavez Forest Products sold merchandise with a P120,000 list price. Trade Discount

a.

30%

b. 40% c. d. 20% e. 40%

Cash disc. Credit Terms 2/10,n/30

Date Paid

Amount Recorded as Sale

June 8

84,000 (84,000 x.02)=1680-cash disc.

1/10,n/30 2/10,n/30 1/15,n/30 n/30

June 15 June 11 June 14 June 28

Amount of cash to received by the seller 82,320

Instructions: Fill the next two column the amount recorded as sale and the amount of cash to received by the seller (10 points) 2 - On May 15, 2019, the Patel Book Distributors acquired for resale books on account with a list price of P108,000. Butuan Publishing, the supplier, allowed a 15% trade discount as well as credit terms of 2/10, n/30. Patel paid the invoice in full on May 20, 2019. Instructions: Prepare Journal Entries for Patel Book Distributors. Show necessary computation on May 20, journal entry. ( 4 pts) 3- For each of the following Paz Abad Retailers purchases, assume that credit terms are 2/10,n/30 and that any credit memorandum was issued and known before Paz Abad Retailers made the payments. Purchases Shipping Terms Prepaid Freight (by Seller) Credit Memo a. P12,000 FOB Shipping Point P1,000 P3,000 b. 24,000 FOB Destination 2,400 2,000 c. 28,000 FOB Shipping Point 4,000 d. 40,000 FOB Shipping Point 3,000 Instructions: 1. Compute for the Cash Discount available 2. Determine the cash remitted if the payment is made within the discount period. Use the following format: Letter a. answered as an example (6 pts) a. b. c. 1. Purchase (Net of Credit Memo) P9,000 Multiply by 2% Cash Discount 180 2.

Purchases (Net of Credit Memo) Less 2% Cash Discount Add: Transportation In Cash Remitted

8,820 1,000 9,820

d.

4 - Lulu Donavan Car Repairs Shop purchases a large amount of auto parts for its business. The following table summarizes selected transaction data: Order Date Shipped Date Received Amount A B C D E F

June July

26 10 16 23 27 3

Aug.

July

5 15 22 30 1 7

Aug.

P30,000 75,000 40,000 60,000 75,000 50,000

Instructions: Determine the July total purchases under each of the following assumptions: 1. The entity recognizes purchases when orders are shipped. 2. The entity recognizes when orders are received. (5 pts)

5 – Jhoel Santos Fireworks engaged in the following purchase transactions during the month. The entity observes the policy that all returns are made one day after the goods are received, and that all purchases are paid with the discount period. List Price 1. 2. 3. 4. 5.

P224,000 126,000 90,000 41,000 357,000

FOB Terms Shipping Point Destination Shipping Point Shipping Point Destination

Freight Charges P4,000 9,000 2,000 1,000 14,000

Purchase Returns & Allowances P21,000 7,000 9,000 24,000

Credit Terms 2/10,n/30 1/10,n/30 2/10,n/30 n/30 3/10,n/30

Trade Discount 30% 20% 25% 20%

Instructions: Using the table above, calculate the amount needed to settle each purchase using the following format: No. 1 is answered as an example (10 pts)

List Price Trade Discount Invoice Price Purchase Ret. & Allowances Purchase Discount(135,800 x . 02) Transportation In Cash to be Paid

1 P224,000 (67,200) P156,800 (21,000) (2,716)

2

3

4

5

4,000 P137,084

6 – The following information pertains to the Eddie Velez School Chairs: Transportation In Merchandise Inventory, 1/1/2019 Merchandise Inventory, 12/31/2019 Purchases Purchase Returns and Allowances Purchase Discounts

P 172,000 1,200,000 1,900,000 4,300,000 129,000 215,000

Instructions: Prepare the Cost of Goods Sold section of the income statement for the year ended Dec. 31, 2019 (5 pts.)...