College of Accountancy

FREIGHT ACTIVITY
Analyze each transaction. Journalize and determine the cost per unit. Assume that purchases were paid on ACCOUNT and sales were
made on CASH.

SCENARIO A. Beginning Balance is ZERO.

Transaction
1. ABC Co. bought 100 sacks
of Cement for P120,000 from
a supplier in Manila. Paid
FedEx freight of P5,000 for
the whole purchase.
2. Sold 70 sacks of cement
for P105,000 to Mega World.
ABC Co. paid freight of
P3,000.
3. Prepare the
Income Statement
4. Prepare the
Inventory General Ledger
Purchase Inventory Journal Entry
Price Cost
(per unit) (per unit)
Sales
Less: Cost of Sales
Gross Income
Less: Operating Expenses
NET INCOME or (LOSS)
Beginning Balance of
Inventory
Add: Purchases
Total Goods Available for
Sale
Less: Cost of Sales
Ending Balance of Inventory

SCENARIO B. Beginning Balance: 40 boxes at P1,350 per box.

Transaction
1. ABC Co. Bought 250 boxes
of tiles for P370,000 from a
supplier in Phnom Penh. The
supplier paid DHL Global
freight of P75,000 for the
whole purchase.
2. Sold 240 boxes of tiles for
P408,000 to Camp John Hay
Manor. ABC paid freight of
P5,000.
3. Prepare the
Income Statement
4. Prepare the
Inventory General Ledger
Purchase Inventory Journal Entry
Price Cost
(per unit) (per unit)
Sales
Less: Cost of Sales
Gross Income
Less: Operating Expenses
NET INCOME or (LOSS)
Beginning Balance of
Inventory
Add: Purchases
Total Goods Available for
Sale
Less: Cost of Sales
Ending Balance of Inventory

“Hate evil. Love good. Get justice.” – Amos 5:24