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Question - Company A began operations in the current year. The entity used perpetual inventory system.
During the year, the company purchased merchandise having a gross invoice cost of P1,500,000. All purchases were made under the terms 5/10, n/30, FOB destination. Relative to this, the company paid freight expenses of P100,000.
The company was able to pay 80% of the purchases within the discount period but the remaining purchases were paid beyond 10 days.
70% of the purchases were sold for P1,200,000.
Required - Prepare journal entries to record the transactions using gross method and net method.
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