Question

Prepare journal entries to record the transactions using both the Perpetual and Periodic Method.

1-Oct   Purchased merchandise amounting to Php 25,000 from Ostan Corp. with terms 3/5, 2/10, n/30. Transportation cost is Php 1,500, FOB Shipping point.

Answer 1

Perpetual Method Journal Entry
No	Accounts	Debit	Credit
1	Inventory	25,000
	Accounts Payable		25,000
	(to record purchase of goods)
2	Inventory	1,500
	Accounts Payable		1,500
	(to record Transportation cost)
Periodic Method Journal Entry
No	Accounts	Debit	Credit
1	Purchases	25,000
	Accounts Payable		25,000
	(to record purchase of goods)
2	Freight Costs	1,500
	Accounts Payable		1,500
	(to record Transportation cost)