Practice Quiz - Quiz #2 Solutions to Problem Solving PDF

PRACTICE QUIZ - QUIZ 2 Solutions to Problem Solving Note: Items in Canvas are shuffled. 1 During the current month, the company completed the transactions listed below. a. The owner invested P250,000 cash in the business. b. Purchased delivery equipment for P32,000 on account. c. Received a b...

PRACTICE QUIZ - QUIZ 2 Solutions to Problem Solving Note: Items in Canvas are shuffled. 1 During the current month, the company completed the transactions listed below. a. The owner invested P250,000 cash in the business. b. Purchased delivery equipment for P32,000 on account. c. Received a bill for P9,600 for equipment repairs that will be paid next month. d. Performed delivery services for P128,000; received P44,000 in cash immediately and the remainder was on account. e. Issued check for P5,000 for a newspaper advertisement. f. Issued check for P7,500 for current month's utilities. g. The owner withdrew P15,000 cash for personal use. h. Received P9,000 on account from credit clients. Determine the balance of Accounts Receivable. d. Delivery services on account ₱ 84,000 128,000 - 44,000 i. Collection of account - 9,000 Accounts Receivable ₱ 75,000 2 Determine the balance of Owner’s Equity. a. Investment ₱ 250,000 c. Repair expense - 9,600 d. Service revenue 128,000 e. Advertising expense - 5,000 f. Utilities expense - 7,500 g. Withdrawals - 15,000 Owner's equity ₱ 340,900 3 A company records the following journal entry: debit Cash P1,470, debit Sales Discounts P30, and credit Accounts Receivable P1,500. Determine the percentage of cash discount for early payment. Input the percentage as a whole number, example if your answer is 5%, just encode 5. Sales discount ₱ 30 Accounts receivable ÷ 1,500 Cash discount % 2% 4 A company purchased P4,000 worth of merchandise. Transportation costs were an additional P350. The company returned P250 worth of merchandise and then paid the invoice within the 2% cash discount period. Determine the total cost of merchandise. Purchases ₱ 4,000 Purchase returns & allowances ₱ 250 Purchase discounts 75 - 325 PRA = (4,000 - 250) x 0.02 = 75 Net purchases ₱ 3,675 Freight in 350 Net cost of purchases = total cost of merchandise ₱ 4,025 5 A company purchased P18,000 of merchandise on July 5 with terms 25% and 15% trade discount, 2/10, n/30. On July 7, it returned P600 worth of merchandise. Determine the total cash payment assuming that the full amount due was paid on July 28. Purchases (on account) ₱ 11,475 18,000 x 0.75 x 0.85 Purchase returns & allowances - 600 Cash paid ₱ 10,875 No cash discount, since paid after cash dicsount period 6 The following data is for a company which uses a periodic inventory system: Sales revenue = P600,000 Ending inventory = P 81,000 Freight in = P42,000 Purchases = P 415,000 Beginning inventory = P 77,000 Sales discounts = P 35,000 Purchase discounts = P 9,000 Owner’s, withdrawals = P 71,000 Sales returns and allowances = P 33,000 Purchase returns and allowances = P 39,000 Operating expenses = P 77,000 Determine the total goods available for sale. Merchandise Inventory, beginning ₱ 77,000 Net cost of purchases Purchases ₱ 415,000 Purchase Returns & Allowances ₱ 39,000 Purchase Discounts 9,000 - 48,000 Net Purchases ₱ 367,000 Freight In 42,000 409,000 Cost of goods available for sale ₱ 486,000 7 A company purchased P20,000 of merchandise on July 5 with terms 20% and 10% trade discount, 2/10, n/30. On July 7, it returned P1,000 worth of merchandise. Determine the total cash payment assuming that the full amount due was paid on July 15. Purchases (on account) ₱ 14,400 20,000 x 0.80 x 0.90 Purchase returns & allowances - 1,000 Accounts payable - balance ₱ 13,400 Also, Purchases - PRA Purchase discount - 268 13,400 x.02 Cash paid ₱ 13,132 8 A company is a wholesaler that sells merchandise in large quantities. Its catalog indicates a list price of P300 per unit on a particular product and a 40% trade discount is offered for quantity purchases of 50 units or more. The cost of shipping the merchandise is P7 per unit under terms FOB shipping point. A customer purchased 100 units of this product. Determine the sales revenue to be recorded from this transaction. List price ₱ 300 Trade discount - 120 300 x 0.40 [since more than 50] Invoice price ₱ 180 Units sold x 100 Sales ₱ 18,000 Freight is not part of Sales 9 On November 1, an entity purchased goods with a list price of P350,000. The seller offered a 10% trade discount and allowed a credit term of 2/10, n/30. The entity made a partial payment of P200,000 on November 5 and the last payment was made on November 11. Determine the total payment made on November 11. Purchases ₱ 315,000 350,000 x 0.90 Partial payment - 200,000 Accounts payable - balance ₱ 115,000 Purchase discount - 6,300 315,000 x 0.02 [no returns] Cash paid ₱ 108,700 10 A company makes a purchase of P2,000 of inventory, subject to credit terms of 3/10 n/45 and returns P500 of inventory prior to payment. Freight of P400 is on terms FOB Destination Point, Prepaid. Determine the amount of the payment assuming payment is made within the discount period. Purchases ₱ 2,000 Purchase returns & allowances - 500 Accounts payable - balance ₱ 1,500 Purchase discount - 45 Purchases - PRA = (2,000 - 500) x 0.03 Cash paid ₱ 1,455 11 A company sold goods for P10,000 less 10 subject to credit terms of 2/10 n/45. Freight of P800 is on terms FOB Destination Point, Prepaid. A credit memo for P2,000 was issued to the customer. Determine the amount of the cash collected assuming the customer paid made within the discount period. Sales ₱ 9,000 10,000 x 0.90 Sales returns & allowances - 2,000 Accounts receivable - balance ₱ 7,000 Sales discount - 140 Sales - SRA = (9,000 - 2,000) x 0.02 Cash collected ₱ 6,860 12 A company sold goods for P10,000 less 10 subject to credit terms of 2/10 n/45. Freight of P800 is on terms FOB Shipping Point, Collect. A credit memo for P2,000 was issued to the customer. The customer made a partial payment of P3,000. Determine the amount of the cash collected assuming the customer paid made within the discount period. Sales ₱ 9,000 10,000 x 0.90 Sales returns & allowances - 2,000 Partial collection - 3,000 Accounts receivable - balance ₱ 4,000 Sales discount - 140 Sales - SRA = (9,000 - 2,00) x 0.02 Cash collected ₱ 3,860 13 FDN Trading recorded the following events involving a recent purchase of merchandise: Received goods for P20,000, terms 2/10, n/30. Returned P400 of the shipment for credit. Paid P100 freight on the shipment on Paid the invoice within the discount How much is the net cost of purchases? Purchases ₱ 20,000 Purchase returns (400) Puchase discounts (392) (P20,000 - P400) x.02 Net purchases ₱ 19,208 Freight in 100 Net cost of purchases ₱ 19,308 14 On August 31, 2020, a company lent money to a customer for P30,000. The customer signed a note with principal and interest at 9% due in one year. Determine the maturity value of the note. Principal ₱ 30,000 Interest income 2,700 prt = 12,000 x 0.09 [1 year note] Maturity value ₱ 32,700 15 FDN Trading received the following promissory notes from various customers during 2020 in the course of selling its merchandise: Six-month 12% note for P50,000 90-day 10% note for P30,000 One-year 20% note for P100,000 All these notes were collected at their maturity dates during the year. How much is total interest income to be recorded by FDN Trading during 2020? Principal Rate Term Interest Note 1 ₱ 50,000 0.12 6/12 ₱ 3,000 Note 2 ₱ 30,000 0.10 90/360 750 Note 3 ₱ 100,000 0.20 20,000 Interest income ₱ 23,750