Question

HappyHome is a factory specialized in sales and manufacturing of several ranges of home appliances. Inventory of microwave ovens is low (<=50) in Jeddah plant. Therefore it is necessary to procure more microwave ovens.

HappyHome is purchasing 200 microwave ovens from Xcite electronics with a unit price= 99 SAR.

Record financial impacts of this purchase transaction using the relevant T-accounts.

N.B. include in one figure impacts for the steps of goods receipt, invoice verification and payment processing.

Answer 1

S.no	Particular	Debit	Credit
1.	Purchase	$ 19800
	Excite Electronics		$ 19800
	(Purchase recorded)
2.	Excite Electronics	$ 19800
	Cash		$ 19800
	(Cash paid for the purchases recorded)
3.	Inventory A/c	$ 19800
	Purchase		$ 19800
	(Goods recived)

T Accounts

Xcite Electronics
Particulars	Amount	Particulars	Amount
To cash a/c	$19,800.00	By Purchase A/c	$19,800.00
	$19,800.00		$19,800.00

Cash A/c
Particulars	Amount	Particulars	Amount
		By Xcite Electronics	$19,800.00
			$19,800.00

Inventory A/c
Particulars	Amount	Particulars	Amount
To Purchases	$19,800.00
Purchases A/c
Particulars	Amount	Particulars	Amount
To Xcite Electronics		By Inventory A/c	$19,800.00