Theory question 107
Books of Original Entry7. Kofi is a dealer in general merchandise. The following are his transactions for the month of June, 2002.
June 1: Sold goods to Mensah Le20,000 less 10% trade discount.
June 4: Purchased from Kwesi the following: 200 iron rods at Le20 each; 100 fillers at Le30 each; invoice subject to 10% trade discount.
June 6: Purchased from Asante Ltd., 10 bottles of gin at Le30 each.
June 7: Returned 60 iron rods purchased on 4th June, to Kwesi.
June 9: Sold the following to Kojo: 300 bags of cement at Le15 each, less 15% trade discount, 150 tins of target at Le10 per tin.
June 18: Kojo returned 10 bags of cement bought on the 9th of June.
June 20: Sold to Jones: 80 iron rods at Le50 each; 110 bags of cement at Le16 each; 250 fillers at Le35 each; invoice subject to 15% trade discount
June 21: Jones was allowed 50% reduction on the total invoice price for goods damaged in transit.
June 30: Purchased from Femi: 100 bags of cement at Le15 each; 50 gallons of oil paint at Le20 each; 300 metal sheets at Le18 each.
You are required to write up the following: (a) sales day book (b) sales returns book (c) purchases day book (d) purchases returns book
Show the model answer
(a) Sales day book: June 1 Mensah 20,000 − 2,000 = 18,000. June 9 Kojo: cement 4,500 − 15% = 3,825; target 1,500; total 5,325. June 20 Jones: iron rods 4,000; cement 1,760; fillers 8,750; 14,510 − 15% (2,176.50) = 12,333.50. Total to sales account 35,658.50.
(b) Sales returns book: June 18 Kojo 10 bags × 15 less 15% = 127.50. June 21 Jones 50% × 12,333.50 = 6,166.75. Total 6,294.25.
(c) Purchases day book: June 4 Kwesi 4,000 + 3,000 = 7,000 − 10% = 6,300. June 6 Asante Ltd 300. June 30 Femi 1,500 + 1,000 + 5,400 = 7,900. Total 14,500.
(d) Purchases returns book: June 7 Kwesi 60 × 20 less 10% = 1,080.
Record invoices net of trade discount, and value returns at the net price paid.