Problem #17

Journalizing Merchandising Transactions

Transactions for the Mariano Lerin Bookstore for March 2020 follows:

Mar. Purchased merchandise on credit from Digao Publishers, terms 2/10, n/30, FOB
2 destination, P74,000.

3 Sold merchandise on credit to Detoya Books Shop, terms 1/10, n/30, FOB shipping
point, P10,000.

5 Sold merchandise for cash, P7,000.

6 Purchased and received merchandise on credit from Made Easy Bookstore, terms
2/10, n/30, FOB shipping point, P42,000.

7 Received freight bill from Super Express from shipment received on Mar. 6, P570.

9 Sold merchandise on credit to Recoletos Books, terms 1/10, n/30, FOB destination,
P38,000.

10 Purchased merchandise from Digao Publishers, terms 2/10, n/30, FOB shipping point,
P26,500, including freight costs of P500.

11 Received freight bill from Super Express for sale on Mar. 9, P291.

12 Paid Digao Publishers for purchase of Mar. 2.

13 Received payment in full for Detoya Books Shop's purchase of Mar. 3.

14 Paid Made Easy Bookstore half the amount owed on the Mar. 6 purchase. A discount
is allowed on partial payment.

15 Returned faulty merchandise worth P3,000 to Digao Publishers for credit against
purchase of Mar. 10.

16 Purchased office supplies from Olamit Supplies for P4,780, terms n/10.

17 Received payment from Recoletos Books for half of the purchase of Mar. 9. A
discount is allowed on partial payment.

18 Paid Digao Publishers in full for amount owed on purchase of Mar. 10, less return on
Mar. 15.

19 Sold merchandise to Sir Ed Trading on credit, terms 2/10, n/30, FOB shipping point,
P7,800.

20 Returned for credit several items of office supplies purchased on Mar. 16, P1,280.

22 Issued a credit memo to Sir Ed Trading for returned merchandise, P1,800.

25 Paid for purchase of Mar. 16, less returns on Mar. 20.

26 Paid freight entity for freight charges for Mar. 7 and 11.

27 Received payment of amount owed by Sir Ed Trading for purchase of Mar. 19, less
credits of Mar. 22.

28 Paid Made Easy Bookstore for the balance on the Mar. 6 purchase.

31 Sold merchandise for cash, P9,730.

Required: Prepare the journal entries.

Answer:

March Debit Credit

74,000.0
2 Purchase 0
Accounts Payable 74,000.00

10,000.0
3 Accounts Receivable 0
Sales 10,000.00

5 Cash 7,000.00
Sales 7,000.00

42,000.0
6 Purchases 0
Accounts Payable 42,000.00

7. Freight In 570
Accounts Payable 570

38,000.0
9. Accounts Receivable 0
Sales 38,000.00

26,000.0
10. Purchases 0
Freight In 500
Accounts Payable 26,500.00

11. Freight Out 291

Accounts Payable

74,000.0
12. Accounts Payable 0
72,520.0
Cash 0
Purchase Discounts 1,480.00

13. Cash 9,900.00

Sales Discounts 100
Accounts Receivable 10,000.00

21,000.0
14. Accounts Payable 0
Cash 20,580.00
Purchase Discounts 420

15. Accounts Payable 3,000.00

Purchase Returns and Allowances 3,000.00

16. Office Supplies 4,780.00

Accounts Payable 4,780.00
 18,810.0
17. Cash 0
Sales Discounts 190
Accounts Receivable 19,000.00

23,500.0
18. Accounts Payable 0
Cash 23,040.00
Purchase Discounts 460

19 Accounts Receivable 7,800.00

Sales 7,800.00

20 Accounts Payable 1,280.00

Office Supplies 1,280.00

22 Sales Returns and Allowances 1,800.00

Accounts Receivable 1,800.00

25 Accounts Payable 3,500.00

Cash 3,500.00

26 Accounts Payable 861

Cash 861

27 Cash 5,880.00
Sales Discounts 120
Accounts Receivable 6,000.00

21,000.0
28 Accounts Payable 0
Cash 21,000.00

31 Cash 9,730.00
Sales 9,730.00