Let’s Check:

Activity 1
A.
List Price = 120,000 Invoice Price = 84,000
Less: Trade Discount (30%) = 36,000 Less: Cash Discounts (2%) = 1,680
Invoice Price = 84,000 Net Cash Received = 82,320

Accounts Receivable 84,000 Cash 82,320

Sales 84,000 Sales Discount 1,680
Accounts Receivable 84,000

B.
List Price = 120,000
Less: Trade Discount (40%) = 48,000
Invoice Price = 72,000

Accounts Receivable 72,000 Cash 72,000

Sales 72,000 Accounts Receivable 72,000

C.
Invoice Price: 120,000 Invoice Price = 120,000
Less: Cash Discounts (2%) = 2,400
Net Cash Received = 117,600

Accounts Receivable 120,000 Cash 117,600

Sales 120,000 Sales Discount 2,400
Accounts Receivable 120,000

D.
List Price = 120,000 Invoice Price = 96,000
Less: Trade Discount (20%) = 24,000 Less: Cash Discounts (1%) = 960
Invoice Price = 96,000 Net Cash Received = 89,040

Accounts Receivable 96,000 Cash 89,040

Sales 96,000 Sales Discount 960
Accounts Receivable 96,000

C.
List Price = 120,000
Less: Trade Discount (40%) = 48,000
Invoice Price = 72,000

Accounts Receivable 72,000 Cash 72,000

Sales 72,000 Accounts Receivable 72,000
Activity 2

A.
Purchases 9,000 Accounts Payable 10,000
Transportation In 1,000 Purchase discount 180
Accounts Payable 9,000 Cash 9,820

B.
Purchases 22,000 Accounts Payable 22,000
Accounts Payable 22,000 Purchase Discount 440
Cash 21,560

C.
Purchases 24,000 Accounts Payable 24,000
Accounts Payable 24,000 Purchase Discount 480
Cash 23,520

D.
Purchases 40,000 Accounts Payable 43,000
Transportation In 3,000 Purchase discount 800
Accounts Payable 40,000 Cash 42,200
Let’s Analyze
Activity 1:
Vergara Co. (Point of View) Pascual Co. (Point of View)
A. A.

6/16 Accounts Receivable 6,000 6/17 Purchases 6,000

Sales 6,000 Transportation In 600
Accounts Payable 6,000
Cash 600
6/25 Cash 5,880
Sales Discount 120
Account Receivable 6,000 6/24 Accounts Payable 6,000
Purchase Discount 120
Cash 5,880

B. B.

6/16 Accounts Receivable 6,000 6/17 Purchases 6,000

Transportation Out 600 Accounts Payable 6,000
Sales 6,000
Cash 600

6/24 Accounts Payable 6,000

6/25 Cash 5,880 Purchase Discount 120
Sales Discount 120 Cash 5,880
Account Receivable 6,000

C. C.

6/16 Accounts Receivable 6,600 6/17 Purchases 6,000

Transportation Out 600 Transportation in 600
Sales 6,000 Accounts Payable 6,000

6/25 Cash 6,480 6/24 Accounts Payable 6,600

Sales Discount 120 Purchase Discount 120
Accounts Receivable 6,600 Cash 6,480

D. D.

6/16 Accounts Receivable 5,400 6/17 Purchases 6,000

Transportation Out 600 Accounts Payable 5,400
Sales 6,000 Cash 600

6/25 Cash 5,280 6/24 Accounts Payable 5,400

Sales Discount 120 Purchase Discount 120
Accounts Receivable 5,400 Cash 5,280
Activity 2:

Date Account Tittles and Explanation P.R. Debit Credit

2020
Aug. 1 Accounts Receivable 21,000
Sales 21,000
To record sales on account from O. Lacierda Trading.

3 Purchases 38,000
Accounts Payable 38,000
To record purchase on account from R. Cabellon Store.

5 Transportation In 290
Cash 290
To record transportation charges.

6 Purchases 6,360
Accounts Payable 6,360
To record purchase on account from Ipil Supplies.

8 Purchases 36,000
Transportation In 200
Accounts Payable 36,200
To record purchase on account from Pagadian Company and
additional transportation
charges.

12 Accounts Payable 6,000

Purchase Return and Allowances 6,000
To record return of purchase from R. Cabellon Store.

15 Accounts Receivable 12,000

Sales 12,000
To record sales on account to Columban Stores.

16 Accounts Payable 2,000

Purchase Returns and Allowances 2,000
To record return of purchase from Ipil Supplies.

17 Cash 10,000
Sales 10,000
To record cash sales.

18 Sales Returns and Allowances 2,000

Accounts Receivable 2,000
To record return of sales to O. Lacierda Trading.

24 Accounts Payable 32,000

Cash 32,000
To record payment of accounts to R. Cabellon Store.

27 Cash 19,000
Accounts Receivable 19,000
To record collection from O. Lacierda Trading.