Problem 8

Belle Company had the following balances on December 31, 2020 before any year-end adjustments were made:

Inventory (Physical Count) 250,000 Accounts Payable 1,000,000 Accounts Receivable 1,200,000 Sales 6,000,000 Sales Returns and Allowances 100,000 Sales Discount 50,000 Purchases 3,000,000 Freight-In 120,000 Purchase Returns and Allowances 60,000 Purchase Discounts 20,000

The following items were not accounted for by the company: a. Goods purchased on December 26, 2020 FOB Shipping Point with list price of P100,000 and trade discount of 10% and 5%. Goods and invoice were received on January 6, 2021. b. Sold goods to customer on December 29, 2020 at FOB Destination with selling price of P10,000 and cost of P5,000. Said goods were received by customer on January 3, 2021 and were excluded though from the physical count. c. Goods purchased on December 28, 2020 FOB Destination with list price of P50,000 and trade discount of 10% and 5%. Goods and invoice were received on January 4, 2021. d. Goods purchased on December 22, 2018 FOB Destination with list price of P30,000 and trade discount of 5%. Goods and invoice were received on December 31, 2020. Goods were excluded from the ending inventory count. e. Sold goods to customer on December 29, 2020 at FOB Shipping Point with selling price of P10,000 and cost of P5,000. Said goods were received by customer on January 3, 2021 and were excluded though from the physical count. f. Goods purchased on December 22, 2020 FOB Shipping Point with list price of P20,000 and trade discount of 15%. Goods and invoice were received on December 31, 2021. Goods were included in the ending inventory count. g. Goods with the consignee which were excluded from the physical count with selling price of P10,000 and cost of P8,000. The company incurred freight of P500 when they were transferred to the consignee. h. Sold goods to customer on December 29, 2020 at FOB Destination with selling price of P10,000 and cost of P5,000. Said goods were received by customer on January 3, 2021 and were included in the physical count. Requirements: 1. Prepare the necessary adjusting entry for each of the items (a to h) and if no adjusting entry is needed, write NO AJE. 2. Compute for the following a. Correct Ending Inventory b. Correct Accounts Payable c. Correct Accounts Receivable d. Correct Net Sales e. Correct Net Purchases