Question

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.

7. Paid the account to X Company in full.

8. Collected the account in no. 4 within the discount period.

9. Purchased merchandise from DDD company for P16,800. Terms, 5,2/10,n/30, FOB Shipping point.

10. Robinson Company paid P800 for freight on transaction no. 9.

11. Paid the account in full within the discount period.

REQUIRED: Using the format given below, prepare an analysis for each transaction as to what is

debited or credited. Analyze also the effects of the transactions on the accounting equation.

Answer 1

Solution:

The journal entries are as follows: