BKAL1013 A201

Tutorial 3
Topic 5 Merchandising Business

1. When merchandise is returned, the buyer would credit

A. Merchandise Inventory
B. Purchases Returns and Allowances
C. Accounts Payable
D. (a) or (b) depending on the inventory system used.

2. The following goods would be included in merchandise inventory for a purchasing

company, EXCEPT

A. Goods in transit shipped FOB destination

B. Goods ordered and received from the supplier
C. Goods in transit shipped FOB shipping point
D. Goods on hand in the showroom

3. The entry to record a RM1,050 sales with terms of 2/10, n/30 would include a(n)

A. decrease to Accounts Receivable for RM1,050

B. increase to Sales for RM1,029.
C. increase to Sales Discounts for RM21.
D. decrease to Sales for RM1,029.

4. The collection of a RM400 account with the 2 percent discount period would result in
a(n)

A. decrease to Accounts Receivable for RM392.

B. decrease to Cash for RM392.
C. increase to Accounts Receivable for RM392.
D. decrease to Sales Discounts for RM8.

5. Under the perpetual inventory system, the entry to record a purchase return would
include a credit to which account?

A. Purchases Returns and Allowances

B. Accounts Payable
C. Merchandise Inventory
D. Sales

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6. Raime Bhd purchased merchandise worth RM1,800 on credit, terms n/30 and returned
merchandise worth RM200 on next day. What is the required journal entry to
record the merchandise returns under the perpetual
inventory system?

Debit (RM) Credit (RM)

A . Accounts Payable 200

Merchandise Inventory 200
B. Accounts Payable 200
Purchases Returns & Allowances 200
C. Merchandise Inventory 200
Purchases Returns & Allowances 200
D. Purchases Returns & Allowances 200
Merchandise Inventory 200

7. Mok Cun Costume has a beginning merchandise inventory of RM45,000. During the
period, purchases were RM210,000; purchase returns, RM6,000; and freight-in
RM15,000. A physical count of inventory at the end of the period revealed that
RM30,000 was still on hand. The cost of goods sold was

A. RM276,000 B. RM246,000
B. RM264,000 D. RM234,000

8. Use this information to answer the following question.

Account Name Debit (RM) Credit (RM)

Sales 293,000
Sales Returns and Allowances 10,000
Purchases 68,000
Purchases Returns and 8,000
Allowances
Freight-In 12,000
Selling Expenses 30,000
General and Administrative 110,000
Expenses

In addition, beginning merchandise inventory was RM22,000 and ending merchandise

inventory was RM14,000. Net income for the period was

A. RM173,000. B. RM93,000
B. RM63,000. D. RM203,000.

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 9. On 3 June 2020, Saudah Bhd sold merchandise worth RM1,600 on credit, terms 2/10,
n/30. The merchandise sold had cost RM1,100. The customer paid the amount on 10
June 2020. What is the required journal entry to record the payment received under the
periodic inventory system?

Debit (RM) Credit (RM)

A. Accounts Receivable 1,568

Sales Discounts 32
Cash 1,600

B. Accounts Receivable 1,600

Sales Discounts 32
Cash 1,568

C. Cash 1,568
Sales Discounts 32
Accounts Receivable 1,600

D. Cash 1,600
Sales Discounts 32
Accounts Receivable 1,632

10. Which of the following items is subtracted from the list amount and NOT recorded when
computing purchase price?
A. Freight-in
B. Purchase return
C. Purchase discount
D. Trade discount

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PART (B): 

The following were selected from among the transactions completed by Fulah Design during
December of the current year. 
 
Dec 3.  Purchased merchandise on account from Jati Enterprise, list price RM22,000, trade
discount 25%, term FOB shipping point, 2/10, n30, with prepaid transportation cost
of RM660 added to the invoice. 
 
5.  Purchased merchandise on account from Tsofa Enterprise, RM20,250, terms FOB
destination, 2/10, n30. 
 
6.  Sold merchandise on account to Melati Wholesale, list price RM18,000, trade
discount 35%, terms 2/10, n30. The cost of merchandise sold was RM8,250. 
 
7.  Returned RM2,800 of merchandise purchased on 5 December from Tsofa
Enterprise. 
 
13.  Paid Jati Enterprise on account for purchase of 3 December, less discount. 
 
15.  Paid Tsofa Enterprise on account for purchase of 5 December, less return of
December 7 and discount. 
 
16.  Received cash on account from sale of 6 December to Melati Wholesale, less
discount. 
 
19.  Sold merchandise on MasterCard, RM49,500. The cost of the merchandise sold
was RM23,700. 
 
22.  Sold merchandise on account to Furniture Resources, RM15,300, terms 2/10, n30.
The cost of the merchandise sold was RM6,700. 
 
23.  Sold merchandise for cash, RM27,680. The cost of the merchandise sold
was RM12,100. 
 
28.  Received merchandise returned by Furniture Resources from sale of 22
December, RM3,000. The cost of the returned merchandise was RM1,400. 
 
31.  Paid MasterCard service fee of RM1,050. 
 
REQUIRED: 
 
Journalize the transactions.