Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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- On January 1, 20x1 Plaka Co. acquired goods for sale in the ordinary course of business for P250,000, excluding P5,000 refundable purchase taxes. The supplier usually sells goods on 30 days' interest-free credit. However, as a special promotion, the purchase agreement for these goods provided for payment to be made in full on December 31, 20x1. Transport charges of P2,000 were paid on January 1, 20x1. An appropriate discount rate is 10 per cent per year. 12. How much is the initial cost of the inventories?arrow_forwardE5-4 On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam- aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis- count. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Diaz Company. (b) Prepare separate entries for each transaction for Taylor Company. The merchandise purchased by Diaz on June 10 had cost Taylor $4,800.arrow_forwardE5-4 On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam- aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis- count. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Diaz Company. (b) Prepare separate entries for each transaction for Taylor Company. The merchandise purchased by Diaz on June 10 had cost Taylor $4,800. E5-5 Presented below are transactions related to R. Humphrey Company. 1. On December 3, R. Humphrey Company sold $570,000 of merchandise to Frazier Co., terms 1/10, n/30, FOB destination. R. Humphrey paid $400 for freight charges. The cost of the merchandise sold was $350,000. 2. On December 8, Frazier Co. was granted an allowance of $20,000 for merchandise…arrow_forward
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