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Trade payables:
31.Jan.2002: 130400
31.Jan.2003: 171250
Payments to supplier: 888,400
Cost of goods taken from inventory by senji(the owner) for her personal use: 1000
Discount received:11200
Refunds received from suppliers:2400What should be the figure for senji’s financial statements for the year ended 31.jan.2003?
My entries in the payables account:
Dr. (Cash) 888400
Dr.(purchases) 2400
Dr. (Discount) 11200
Cr: (Purchases) 942850
C/F: 171250
B/F: 130400In the purchase account:
Dr (payables) : 942850
Cr (Drawings): 1000
Cr:(Payables): 2400
SOPL: 939450In the Discount received:
Cr(Payables): 11,200Net purchases:
939450-11200=928250However the answer is:937050. Can you explain, how this answer comes?
You have already accounted for the discounts received in the payables account, so you do not account for it again by subtracting it from the purchases.
Also you have accounted for the refund wrongly. The entry for a refund is Dr Cash Cr Payables (as explained in my lectures).
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