BUA 103 Assignment Questions and Answers

1. Bua103
2. Department
   Business management
3. Assignment Questions
   Enter the following transactions January 2nd 2024 bought goods on credit from chima enterprise 20 cartons of baby and me soap (a) #1500 per carton 5 cartons of baby lotion at #1800 each. Invoice less 3% trade discount. 
   January 5th bought from marina and company 10 cartons of baby powder at #1200 each same date 15 cartons of tooth paste at #850 each less 10% trade discount required prepare purchase journal.

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Transaction 1 – January 2, 2024

Supplier: Chima Enterprise

1. Calculation of the Gross Purchase Amount

• Baby and Me Soap:
  20 cartons × ₦1,500 = ₦30,000
• Baby Lotion:
  5 cartons × ₦1,800 = ₦9,000
• Total (Gross):
  ₦30,000 + ₦9,000 = ₦39,000

1. Calculation of Trade Discount

• Discount rate = 3%
• Discount = 3% × ₦39,000 = 0.03 × 39,000 = ₦1,170

1. Net Amount Payable

• Net = Gross – Discount = ₦39,000 – ₦1,170 = ₦37,830

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Transaction 2 – January 5, 2024

Supplier: Marina and Company

1. Calculation of the Gross Purchase Amount

• Baby Powder:
  10 cartons × ₦1,200 = ₦12,000
• Toothpaste:
  15 cartons × ₦850 = ₦12,750
• Total (Gross):
  ₦12,000 + ₦12,750 = ₦24,750

1. Calculation of Trade Discount

• Discount rate = 10%
• Discount = 10% × ₦24,750 = 0.10 × 24,750 = ₦2,475

1. Net Amount Payable

• Net = Gross – Discount = ₦24,750 – ₦2,475 = ₦22,275

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Purchase Journal Format

Below is a sample layout of the purchase journal incorporating the above details. (Note: The journal format can vary by textbook or lecturer’s instructions. This example uses columns for Date, Supplier, Details, Gross Purchase, Trade Discount, and Net Amount.)

Date	Supplier	Details	Gross Purchase (₦)	Trade Discount (₦)	Net Amount (₦)
Jan 2, 2024	Chima Enterprise	20 cartons baby and me soap @₦1,500 each; 5 cartons baby lotion @₦1,800 each	39,000	1,170	37,830
Jan 5, 2024	Marina and Company	10 cartons baby powder @₦1,200 each; 15 cartons toothpaste @₦850 each	24,750	2,475	22,275

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Explanation of Journal Entries

For each credit purchase, you would make an entry that debits the Purchases account (with the gross amount) and credits the Accounts Payable account (with the net amount after discount). In practice, the discount may be recorded in a separate column or sub‐account if required by your accounting system.

For example, the journal entry for January 2, 2024, would be:

• Debit: Purchases ₦39,000
• Credit: Trade Discount Received ₦1,170
• Credit: Accounts Payable ₦37,830

And for January 5, 2024:

• Debit: Purchases ₦24,750
• Credit: Trade Discount Received ₦2,475
• Credit: Accounts Payable ₦22,275

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