Tutorial 3 Purchases & Sales Cycles 1 LTJ 2022

Tutorial 3 – The Purchases and Sales Cycle Required:

(a) Record the above transaction in the books of prime entry;
Section A: (b) Post the transactions to Purchases Ledger, taking into consideration of
the opening balances; and
1 (a) What is a purchases journal? Explain briefly its format. (c) Show the transfer to General Ledger

(b) What is a sales journal? Explain briefly its format. Question 4

2 What are sales returns and purchases returns? Where are they recorded? The followings are the transactions of Jaya Trading during the month of
May:
Question 3
1 Credit sales to Arumugam Trading (invoice no 120) RM 750 less 10%
On 1st January, Mega Enterprise had the following balances in its Purchases trade discount
Ledger: Super RM18,000, Fantastic RM30,000 and Grand RM21,000. And 5 Credit notes no. 220 to Arumugam Trading for goods returned
the balance of cash and bank account in Cash Book as at 1st January is amounting to RM120
RM23,000 and RM46,000 respectively. 8 Sent invoice no 121 to Chop Seng Fatt for goods supplied at the list
price amounting to RM900 less trade discount 10%
During the month the following transactions took place: 13 Chop Seng Fatt returns goods amounting to RM150 and credit note no.
221 was issued to him
Date Transactions 26 Received cheque payment from Chop Seng Fatt being partial payment
Jan 3 Purchased RM5,000 goods on credit from Fantastic, received in settlement of RM500 less cash discount 5%.
discount 10% from listed price (invoice no 23). 27 Arumugam Trading makes payment by cash in settlement of RM400
Jan 5 Returned goods RM500 to Super per credit note no. 876 and less cash discount 5% to settle part outstanding sum
paid Super a cheque in settlement of invoice RM10,000,
receiving a discount of RM1,000 Required:
Jan 8 Returned goods RM1,000 (credit note no. 098) to Grand due to (a) Record the above transactions in the books of prime entry;
wrong specifications (b) Post the transactions in Sales Ledger; and
(c) Show the transfers to the General Ledger
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
 Tutorial 3 Purchases & Sales Cycles 2 LTJ 2022

Section B: Extra exercise questions (for students’ own practice) Post the data from the Books of Prime Entry to General Ledger and
Purchase Ledger.
Jenny has the following purchases for the month of May
Question 3
May
1 From Ace: 4 DVDs at RM 80 each, 3 mini hi-fi at RM 500 each. Fu Mey of 10 Jl Bung Raya, KL, is selling the following items at the
Less 20% trade discount (Invoice 1234) recommended retail prices as shown: white tape RM 10 per roll, green felt at
2 From Lee: 2 washing machines at RM 2,000 each, 5 vacuum RM4 per metre, blue cotton at RM6 per sheet, black silk at RM20 per dress
cleaners at RM 1,000 each, 2 kettles at RM 20 each. Less 20% trade length. She makes the following sales:
discount (Invoice 0001)
3 From Bee: 1 hi-fi unit at RM 600 each, 2 washing machine at RM 2009
500 each. Less 25% trade discount (Invoice 4567) May 1 Ali, Setapak: 3 rolls white tape, 5 sheets blue cotton, 1 dress length
4 From Wee: 6 CD/radios at RM 50 each. Less 20% trade discount black silk. Less 5% trade discount, invoice # 10001.
(Invoice 7299)
5 From Fong: 4 kettle at RM 50 each without any trade discount May 4 Cheng, Wangsa Maju: 6 rolls white tape, 30 metres green felt. Less
(Invoice 3245) 20% trade discount, invoice # 10002.

(a) Enter up the purchases day book for the month May 5 Ali Setapak: returned 2 sheets blue cotton and order 5 dress length
(b) Post the transactions to the suppliers’ account black silk. Less 10% trade discount, invoice #10003. Credit note
(c) Transfer the total to the purchases account 0001 issued on the same day.

Question 2 May 8 Cheng, Wangsa Maju: 1 dress length black silk including delivery
of RM10 , invoice #10004.
Record the following transactions into appropriate Books of Prime Entry for
Jaya Trading for the month of March Required:
(a) Record the above transaction in Sales Journal
March (b) Post the data from the Sales Journal to General Ledgers and Sales
1 Purchases of goods from May Bee Sdn Bhd amounting to RM1,350, Ledgers.
less trade discount of 20%
2 Purchases of goods RM105 from Sin Sin Store on credit
3 Received invoice from Sunny Enterprise at list price of RM540, less
discount 15%
4 Return goods at list price RM180 to Sunny Enterprise
5 Purchases of goods RM360 by cash
6 Received a credit note from May Bee Sdn Bhd for goods at list
price RM135 purchased on 1 May