Tutorial 3 Purchases & Sales Cycles
1
LTJ 2020
Tutorial 3 – The Purchases and Sales Cycle
Section A:
1 (a) What is a purchases journal? Explain briefly its format.
(b) What is a sales journal? Explain briefly its format.
2 What are sales returns and purchases returns? Where are they recorded?
Question 3
On 1st January, Mega Enterprise had the following balances in its Purchases
Ledger: Super RM18,000, Fantastic RM30,000 and Grand RM21,000. And
the balance of cash and bank account in Cash Book as at 1st January is
RM23,000 and RM46,000 respectively.
During the month the following transactions took place:
Date
Transactions
Jan 3
Purchased RM5,000 goods on credit from Fantastic, received
discount 10% from listed price (invoice no 23).
Jan 5
Returned goods RM500 to Super per credit note no. 876 and
paid Super a cheque in settlement of invoice RM10,000,
receiving a discount of RM1,000
Jan 8
Returned goods RM1,000 (credit note no. 098) to Grand due to
wrong specifications
Jan 10
Purchased RM7,000 goods on credit (invoice no. 542) from
Super and RM6,000 from Grand (invoice no.421)
Jan 12
Paid cash to settle invoices RM5,000 to Fantastic and receiving
a 10% cash discount
Jan 15
Purchase RM8,000 goods on credit (invoice no 455) from Grand
Jan 22
Returned goods RM3,000 to Fantastic due to wrong design
(credit not no. 368)
Jan 28
Pay cheque to settle an invoice RM2,400 to Grand and receiving
a 10% cash discount
Required:
(a) Record the above transaction in the books of prime entry;
(b) Post the transactions to Purchases Ledger, taking into consideration of
the opening balances; and
(c) Show the transfer to General Ledger
Question 4
The followings are the transactions of Jaya Trading during the month of
May:
1 Credit sales to Arumugam Trading (invoice no 120) RM 750 less 10%
trade discount
5 Credit notes no. 220 to Arumugam Trading for goods returned
amounting to RM120
8 Sent invoice no 121 to Chop Seng Fatt for goods supplied at the list
price amounting to RM900 less trade discount 10%
13 Chop Seng Fatt returns goods amounting to RM150 and credit note no.
221 was issued to him
26 Received cheque payment from Chop Seng Fatt being partial payment
in settlement of RM500 less cash discount 5%.
27 Arumugam Trading makes payment by cash in settlement of RM400
less cash discount 5% to settle part outstanding sum
Required:
(a) Record the above transactions in the books of prime entry;
(b) Post the transactions in Sales Ledger; and
(c) Show the transfers to the General Ledger
Tutorial 3 Purchases & Sales Cycles
2
LTJ 2020
Section B: Extra exercise questions (for students’ own practice)
Question 1 (Frank Wood Q 15.1 p 168 – modified)
Jenny has the following purchases for the month of May
May
1 From Ace: 4 DVDs at RM 80 each, 3 mini hi-fi at RM 500 each.
Less 20% trade discount (Invoice 1234)
2 From Lee: 2 washing machines at RM 2,000 each, 5 vacuum
cleaners at RM 1,000 each, 2 kettles at RM 20 each. Less 20% trade
discount (Invoice 0001)
3 From Bee: 1 hi-fi unit at RM 600 each, 2 washing machine at RM
500 each. Less 25% trade discount (Invoice 4567)
4 From Wee: 6 CD/radios at RM 50 each. Less 20% trade discount
(Invoice 7299)
5 From Fong: 4 kettle at RM 50 each without any trade discount
6 Received a credit note from May Bee Sdn Bhd for goods at list
price RM135 purchased on 1 May
Post the data from the Books of Prime Entry to General Ledger and
Purchase Ledger.
Question 3
Fu Mey of 10 Jl Bung Raya, KL, is selling the following items at the
recommended retail prices as shown: white tape RM 10 per roll, green felt at
RM4 per metre, blue cotton at RM6 per sheet, black silk at RM20 per dress
length. She makes the following sales:
2009
May 1 Ali, Setapak: 3 rolls white tape, 5 sheets blue cotton, 1 dress length
black silk. Less 5% trade discount, invoice # 10001.
