Sammy Co. distributes travel bags in retail stores at a price of P1550 each travel bag and gives credit terms of 1/10, n/30 to all customers. At the end of June, Sammy's closing stock consisted of 70 travel bags (code 27) costing P800 each. During the month of July the following merchandising transactions were carried out.

1 Sammy bought 60 bags (code 28) at P800 each from Bagsy Co. FOB shipping point. Conditions: 2% commercial discount, n/10. Sammy paid the freight for P1400.

3 Sammy sold 40 suitcases (code 27) on account of Metro World.

9 He paid the bill owed to Bagsy.

12 Payment received from Metro World for account on July 3rd.

17 He sold 30 suitcases (Code 28) on a Round Trip account.

18 Bought 60 suitcases (code 29) for P51,000 from Kingsmen Manufacturer, FOB Destination, terms 1/10, n/30. Kingsmen paid a freight of P9,000.

20 Received a credit of P8,500 for 10 bags (code 29) returned to Kingsmen.

21 Received full payment for Going and Coming.

22 He sold 30 bags (code 27) and 30 bags (code 29) on account of Fly-By-Day.

29 Kingsmen paid on full account due.

30 P500 day flight allowance given for 4 bags (code 29) that were found with slight defect. The unsold stock was counted at 50 pieces.

Required:

a) Inputs by perpetual methods. Post to T-account merchandise inventory

b) Prepare 3 community cards. Did the unsold units match the balances on the stock cards?

c) Did the T-Account balances match the cost of unsold goods?

d) Calculate for gross profit.

Answer rating: 100% (QA)

a Inputs by perpetual methods Post to Taccount merchandise inventory Beginning Balances June 30 Travel Bags Code 27 Quantity 70 Cost P800 each July Tr... View the full answer