Question

The assignment consists of two (2) parts. You are required to make sure your assignment is complete. Part One: Problem On October 18, 2019, Nana Enterprises bought 95 tables on account at $75 each. Terms of the purchase were 10/25, n 45. Nana Enterprises paid for all tables on October 30, 2019. Instructions: A. Assuming that Nana Enterprises uses the gross method and the periodic inventory system, prepare the required journal entries for the year 2019. Omit explanations. Date Accounts Title and Explanation Rel. Debit Credit B. Assuming that Nana Enterprises uses the net method and the perpetual inventory system, prepare the required journal entries for the year 2019. Omit explanations. Date Accounts Title and Explanation Ref. Debit Credit

part 2 updated because the first is blurry

Answer 1

Part One:

a) journal entries under gross method

Date	Accounts Title and Description	Ref	Debit	Credit
18/10/19	Inventory A/C Dr.		7125	-
	To Accounts Payable A/C		-	7125
	(being purchases made on credit)
30/10/19	Accounts Payable A/C Dr.		7125	-
	To Cash A/C		-	6412.5
	To Purchase Discount A/C		-	712.5
	(being payment made for purchases within 25 days and availd discount of 10%

b) journal entries under net method

Date	Accounts Title and Description	Ref	Debit	Credit
18/10/19	Purchase A/c Dr/.		6412.5	-
	To Accounts Payable A/c		-	6412.5
	(being purchases made on credit)
30/10/19	Accounts Payable A/c Dr.		6412.5	-
	To Cash A/c Dr.		-	6412.5
	(being payment made for purchases)

Part two:

a) Computation of COGS under perpetual inventory system

Cost flow assumption	Ending Inventory	COGS	Gross Profit
FIFO	5,63,267.5	11,47,512.5	26,73,487.5
LIFO	4,50,650	12,60,130	25,60,870
Weighted Average	5,09,229	12,01,551	26,19,449

b) Computation of COGS under periodic inventory system

Cost flow assumption	Ending Inventory	COGS	Gross Profit
FIFO	6,88,780	10,22,000	27,99,000
LIFO	2,79,980	14,30,800	23,90,200
Weighted Average	4,84,380	12,26,400	25,94,600