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  • Chapter 7 Alcaparas

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    Christian Alcaparas
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    The document shows journal entries for purchases and payments under different accounting systems and methods. Part 1 shows journal entries for purchases and payments under different perpetual inventory systems. Part 2 compares entries under perpetual versus periodic inventory systems. Part 3 analyzes the nature and effect of errors in inventory and cost of goods sold accounts. Part 4 demonstrates entries for purchase of inventory under gross and net methods. Part 5 provides inventory balances and calculations for different companies.

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    Chapter 7 Alcaparas

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    The document shows journal entries for purchases and payments under different accounting systems and methods. Part 1 shows journal entries for purchases and payments under different perpetual inventory systems. Part 2 compares entries under perpetual versus periodic inventory systems. Part 3 analyzes the nature and effect of errors in inventory and cost of goods sold accounts. Part 4 demonstrates entries for purchase of inventory under gross and net methods. Part 5 provides inventory balances and calculations for different companies.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Download as xlsx, pdf, or txt
    5 views7 pages

    Chapter 7 Alcaparas

    Uploaded by

    Christian Alcaparas
    The document shows journal entries for purchases and payments under different accounting systems and methods. Part 1 shows journal entries for purchases and payments under different perpetual inventory systems. Part 2 compares entries under perpetual versus periodic inventory systems. Part 3 analyzes the nature and effect of errors in inventory and cost of goods sold accounts. Part 4 demonstrates entries for purchase of inventory under gross and net methods. Part 5 provides inventory balances and calculations for different companies.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 7

    1. A Dec. 31, 20x1 Purchase ₱ 100,000.

    00
    Accounts payable ₱ 100,000.00

    Jan. 2, 20x2 Freight in ₱ 10,000.00


    Cash ₱ 10,000.00

    Jan. 5, 20x2 Accounts payable ₱ 100,000.00


    Cash ₱ 100,000.00

    B Dec. 31, 20x1 No entry

    Jan. 2, 20x2 Purchases ₱ 100,000.00


    Accounts payable ₱ 100,000.00

    Jan. 5, 20x2 Accounts payable ₱ 100,000.00


    Cash ₱100,000.00

    C. Dec. 31, 20x1 Purchases ₱ 100,000.00


    Freight in ₱ 10,000.00
    Accounts payable ₱ 110,000.00

    Jan. 2, 20x2 No entry

    Jan. 5, 20x2 Accounts payable ₱ 110,000.00


    Cash ₱ 110,000.00

    D. Dec. 31, 20x1 No entry

    Jan. 2, 20x2 Purchases ₱ 100,000.00


    Accounts payable ₱ 90,000.00
    Cash ₱ 10,000.00

    Jan. 5, 20x2 Accounts payable ₱ 90,000.00


    Cash ₱ 90,000.00
    Perpetual system
    2. A Inventory ₱ 50,000.00
    Accounts payable ₱ 50,000.00

    Inventory ₱ 4,000.00
    Cash ₱ 4,000.00

    B Perpetual system
    Accounts payable ₱ 5,000.00
    Inventory ₱ 5,000.00

    C Perpetual system
    Accounts receivable ₱ 90,000.00
    Sales ₱ 90,000.00

    Cost of goods sold ₱ 30,000.00


    Inventory ₱ 30,000.00

    D Perpetual system
    Sales returns ₱ 6,000.00
    Accounts receivable ₱ 6,000.00

    Inventory ₱ 2,000.00
    Cost of goods sold ₱ 2,000.00
    Periodic system 3
    Purchases ₱ 50,000.00
    Accounts payable ₱ 50,000.00

    Freight in ₱ 4,000.00
    Cash ₱ 4,000.00

    Periodic system
    Accounts payable ₱ 5,000.00
    Purchase returns ₱ 5,000.00

    Periodic system
    Accounts receivable ₱ 90,000.00
    Sales ₱ 90,000.00

    No entry

    Periodic system
    Sales returns ₱ 6,000.00
    Accounts receivable ₱6,000.00

    No entry
    Nature of error Effect of error on 4
    Gross profit COGS

    a. Overstatement of beginning inventory Under Over


    b. Understatement of purchases Over Under
    c. Overstatement of purchase returns Over Under
    d. Understatement of purchase returns Under Over
    e. Overstatement of ending inventory Over Under
    f. Understatement of ending inventory Under Over
    Gross method Net method
    Purchase of inventory
    Purchases ₱ 90,000.00 Purchases
    Accounts payable ₱ 90,000.00 Accounts payable

    Payment is made within discount period


    Accounts payable ₱ 90,000.00 Accounts payable
    Purchase discounts ₱ 1,800.00 Cash
    Cash ₱ 88,200.00

    Payment is made beyond discount period


    Accounts payable Accounts payable
    Cash ₱ 90,000.00 ₱ 90,000.00 Purchase discont lost
    Cash
    Net method 5 Inventory,beg.
    A ₱ 10,000.00
    ₱ 88,200.00 B ₱ 36,000.00
    ounts payable ₱ 88,200.00 C ₱ 15,000.00
    D ₱ 25,200.00

    nts payable ₱ 88,200.00


    ₱ 88,200.00

    nts payable ₱ 88,200.00


    ase discont lost ₱ 1,800.00
    ₱ 90,000.00
    Net purchases Cost of sales Inventory,end
    ₱ 198,000.00 ₱ 112,000.00 ₱ 96,000.00
    ₱ 145,000.00 ₱ 125,000.00 ₱ 56,000.00
    ₱ 58,000.00 ₱ 64,000.00 ₱ 9,000.00
    ₱ 112,000.00 ₱ 89,200.00 ₱ 48,000.00

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