Name: Course & Year. Test : Show your computation in good form. 1.) Sales 2,000,000.00 Freight in 40,000.00 Sales return and allowances. 60,000.00 Sales discount. 50,000.00 Purchases... 1,120,000.00 Purchase Discount... 20,000.00 Merchandise Inventory Beginning 300,000.00 Purchase Returns... 40,000.00 Merchandise Inventory End, 200,000.00 Operating Expenses. 400,000.00 Questions: 1.) How much is net sales? 2.) How much is Cost of Goods Available for sale! 3.) How much is cost of sales? 4.) How much is gross profit? 5.) How much is Net Income? 2.) Sales 200,000.00 Less: Sales return and allowances. 40.000 Sales Discount Net Sales 140,000.00 360,000.00 10,000.00 4,000.00 ? 302,000.00 16,000.00 300.000.00 3.) Purchases Purchase discount. Purchase returns & Allowances. Merchandise Inventory, Beginning Merchandise Inventory End Freight-In.... Cost of sales. Cost of Goods available for sale. Net Purchases. 4.) Net Sales Less; Cost of Sales Gross Profit Less: Operating Expenses Net Income 600,000.00 500,000.00 ? 200,000.00 Dec. 30 Jan. 5 Jan.5 Dec. 20 Dec. 29 Dec. 29 Jan. 2 Dec.28 Dec. 28 Test II: Determined whether the ownership of merchandise in transit belongs to the buyer or seller. The cut-off date is December 31, 2007. Ownership of Terms of Delivery Date Shipped Invoice date Date received Goods 1. F.O.B Shipping point Dec. 28 Dec. 31 Jan. 1 2.F.O.B Destination Dec. 27 Jan. 5 Jan. 1 3. F.O.B Destination Dec. 20 Jan. 1 4.F.O.B Shipping point Dec. 31 Dec. 30 Jan. 5 5. F.O.B Destination Dec. 20 Dec. 31 Jan. 5 6.F.O.B Shipping point Dec. 10 7.F.O.B Destination 8. F.O.B Destination Dec. 25 Jan. 2 Jan. 2 9.F.O.B Shipping point Dec. 25 Dec. 31 10.F.O.B Shipping point Dec, 25 Dec. 22 Dec. 25 11. F.O.B Shipping point Dec. 28 Dec. 25 12. F.O.B Destination Dec. 10 Dec. 30 Jan. 1 13.F.O.B Shipping point Jan. 1 Dec. 30 14. F.O.B Shipping point Jan. Dec. 31 Jan 5 15. F.O.B Destination Jan. 5 Dec. 31 Jan. 5 Test 111; On Sept. 16, 2007. Caris Co. sold merchandise to Oana Co. for P600,000, terms 2/10,n/30. Shipping costs were P60,000. Oana Co received the goods and Caris Co.'s invoice on Sept. 17. Both Caris Co. and Oana Co use the periodic inventory system. The following are several arrangements regarding the shipping costs. A. Shipping terms are F.O.B shipping point, freight collect. Oana Co. paid the shipping costs on Sept. 17 and remitted cash on Sept. 24. Requirements; 1. Prepare the entries for Caris Co. to record the sale and cash receipts. 2. Prepare the entries for Oana to record the purchase, the payment of shipping costs and cash remittance. B. Shipping terms are F.O.B destination, freight Collect. Oana Co. paid the shipping costs on Sept. 17 and deducted the P60,000 from the amount owed to Caris Co. A copy of freight bill to Caris Co. was provided with the Sept 24 cash remittance. Oana Co. remitted the cash on Sept. 24. Requirements: 1. Prepare the entries for Caris Co. to record the sale and cash receipts. 2. Prepare the entries for Oana to record the purchase, the payment of shipping costs and cash remittance. C. Shipping terms are F.O.B shipping point, freight prepaid. Caris Co. paid the shipping costs on Sept. 17. Oana Co. remitted cash on Sept. 24. Requirements; 1. Prepare the entries for Caris Co. to record the sale and cash receipts. 2. Prepare the entries for Oana to record the purchase, the payment of shipping costs and cash remittance. D. Shipping terms are F.O.B destination, freight prepaid. Caris Co. paid the shipping costs on Sept. 17 and Oana Co. remitted the cash on Sept. 24. Requirements; 1. Prepare the entries for Caris Co. to record the sale and cash receipts. 2. Prepare the entries for Oana to record the purchase, the payment of shipping costs and cash remittance. Test VI: In testing the sale cut off for the Camela Co. in connection with an audit for the year ended October 31, 2005, you find the following information. A physical inventory was taken as of the close of business on October 31, 2007, all customers are within a three-day delivery area of the Camela Co. plant. Vat is billed separately. The unadjusted balance for sales, purchases, and inventories are P3,500,000, P1,000,000 and P200,000 respectively. Sales Cost Invoice No. Terms F.O.B Date Shipped Date Recorded 0001 0002 0003 00X04 0005 Destination Shipping point Shipping point Destination Destination 10-20 10-31 10-25 10-31 10-31 10-31 11.02 10-31 10-29 11-2 10,000 25,000 18,000 42.000 92.000 7,500 20,000 12.000 31.000 80,000 Invoice Cost No. Terms F.O.B Date Shipped Date Recorded 1001 Shipping point 11-02 10-23 51,000 1002 Shipping point 11-05 11.06 25.000 1003 Destination 10-25 11-03 20,000 1004 Destination 10-31 10-29 40.000 1005 Destination 11-05 11-2 25.000 Required: Compute for the adjusted balances for sales, purchases and inventories, respectively: Sales Purchases Inventories