Business Economics and Financial Management Department

Financial Accounting and Reporting Specialized in the Context of Finance

Provide the following:

1. Journalize the above transactions

2. What is the net purchases for the period?

3. What is the net sales for the period?

Mr. William Camino and Windy Balda started a partnership business to organize a merchandising firm. The firm uses periodic inventory system. The following accounts are being used: Cash; Accounts Receivable; Merchandise Inventory; Supplies; Prepaid Rent; Office Equipment; Accumulated Depreciation; Accounts Payable; Notes Payable; Accrued Interests; Long-term Loan; Camino, Capital; Camino, Drawings; Balda, Capital; Balda, Drawings, Sales; Sales Returns and Allowances; Sales Discounts; Cost of Goods Sold; Freight-Out; Salaries; Employee Benefits Expense; Rental Expense; Supplies Expense; Depreciation Expense; and Interest Expense. During the month of December, the firm completed the following transactions. (Invoice price is the actual cost of the product purchased)

2019 Transactions

Dec. 1 Mr. Camino and Balda started their business by investing Php. 250, 000 each. Each of the partners agreed to share equally profits and losses.

They hired three employees and each of them receives Php. 15,000 as monthly salary and Php. 3,000 as monthly benefits. The employees receive halves of their salary every 15th and 30th while the benefits are paid every end of the month.

Borrowed 3-year long-term loan amounting to P100,000 in the name of the business with an interest rate per year of 10%.

Paid rental fee in advance for three months, 60,000.

2 Purchased office equipment for P100,000, down of P50,000 and issued note for the remaining. The office equipment have a useful life of five (5) years with no salvage value.

3 Purchased office supplies for P10,000 cash.

6 Purchased merchandise inventories Php. 50,000, 2/10, n/30, FOB destination, freight prepaid, Php. 2,000.00.

9 The firm sold half of the purchased goods at Php. 60,000.00, 1/10, n/15, FOB destination, freight prepaid, Php. 1,000.00. The cost of goods sold is based on the invoice price.

13 The firm purchased merchandise inventories, Php. 100,000, 2/10, n/60, FOB shipping point, freight collect, Php. 4,000.00.

The firm sold the remaining merchandise inventories that was purchased last December 6 at Php. 60,000, 1/10, n/15, FOB shipping point, freight collect, Php. 1,000.

15 The firm collected payments from the sold merchandise inventories last December 9 and 13.

The firm paid half of the employees salary.

16 The firm paid the purchases last December 6.

17 The firm sold half of purchased goods last December 13 at Php. 90,000, 2/10, n/30, FOB Destination, freight collect, Php. 3,000. The cost of goods sold is based on the invoice price.

18 The firm sold the remaining merchandise inventories for Php. 70,000, 2/10, n/30, FOB destination, Freight collect, Php. 2,000.00

23 The firm paid the owed merchandise inventories last December 13.

24 The customer returned defective goods Php. 5,000 that were bought last December 17. Cost of returned goods is Php. 2,800.00

The firm returned goods worth Php. 5,000 from the purchase made last December 13.

28 The firm collected payments from the sold merchandise inventory last December 17 and 18.

31 The firm paid the salaries and benefits of the employees.

31 Each of the partners withdrawn Php. 15,000 for personal use.