Orange Mobile is a company selling mobile phones (i.e. merchandise). The company uses perpetual inventory system...

 

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Orange Mobile is a company selling mobile phones (i.e. merchandise). The company uses perpetual inventory system and has the following transactions in the month of October. October 5 7 8 9 10 12 12 20 222 25 26 Purchased merchandise from Alpha Ltd for $50,000 on account, under the terms of 1/15, n/60, FOB shipping point. Sold merchandise to Beta Ltd for $16,000 on account on the terms of 2/15, n/30, FOB destination. The cost of the merchandise was $8,000. Returned to Alpha Ltd $1,000 of merchandise which was part of the merchandise purchased on 5 October. Paid $1,200 cash for shipping charges related to the sale to Beta Ltd on 7 October. Paid $1,000 cash for shipping charges on the purchase on 5 October. Part of the merchandise sold on 7 October was returned by Beta Ltd. The sales and cost are $800 and $400 respectively. Paid Alpha Ltd for the outstanding balance. Received cash payment from Beta Ltd. Sold merchandise to Apple Store for $10,000 on credit on terms 1/10, n/60, FOB shipping point. The cost of the merchandise was $5,000. Paid $500 cash shipping charges for the merchandise sold to Apple Store on 25 October, increasing the amount to be received (account receivable) from Apple Store. Required: 1. Prepare journal entries for the above merchandising transactions of Orange Mobile. (Explanation is NOT required). (14 marks) 2. Determine the amounts of net sales and gross profit for the month of October. (Show calculation process). (2 marks) Orange Mobile is a company selling mobile phones (i.e. merchandise). The company uses perpetual inventory system and has the following transactions in the month of October. October 5 7 8 9 10 12 12 20 222 25 26 Purchased merchandise from Alpha Ltd for $50,000 on account, under the terms of 1/15, n/60, FOB shipping point. Sold merchandise to Beta Ltd for $16,000 on account on the terms of 2/15, n/30, FOB destination. The cost of the merchandise was $8,000. Returned to Alpha Ltd $1,000 of merchandise which was part of the merchandise purchased on 5 October. Paid $1,200 cash for shipping charges related to the sale to Beta Ltd on 7 October. Paid $1,000 cash for shipping charges on the purchase on 5 October. Part of the merchandise sold on 7 October was returned by Beta Ltd. The sales and cost are $800 and $400 respectively. Paid Alpha Ltd for the outstanding balance. Received cash payment from Beta Ltd. Sold merchandise to Apple Store for $10,000 on credit on terms 1/10, n/60, FOB shipping point. The cost of the merchandise was $5,000. Paid $500 cash shipping charges for the merchandise sold to Apple Store on 25 October, increasing the amount to be received (account receivable) from Apple Store. Required: 1. Prepare journal entries for the above merchandising transactions of Orange Mobile. (Explanation is NOT required). (14 marks) 2. Determine the amounts of net sales and gross profit for the month of October. (Show calculation process). (2 marks)