Answer to Question #260407 in Accounting for mackie

Question

Activity #1

Analyzing transactions as to what account is debited and credited

Robinson Company uses the perpetual inventory system and this is a VAT Registered Company. All

transactions include 12% VAT.

1. Purchased merchandise from X Company for P7,200 under credit terms, n/30.

2. Purchased merchandise from BBB Company for P11,200 Cash.

3. Paid freight on the shipment in No. 2, P500.

4. Robinson Company sold merchandise costing P 20,000 for P25,000 under credit terms, 2/10, n/30,

FOB Destination.

5. Robinson Company paid P1,000 freight on no. 4 transaction.

6. Robinson sold merchandise costing P30,000 for P40,000 for cash. Freight of P 1,200 is also paid by

Robinson because the credit term is FOB Destination.

REQUIRED: Using the format given below, prepare an analysis for transaction as to what is debited or credited. Analyze the effects of the transactions on the accounting equation.

Answer 1

Solution:

The journal entries are as below: