Davao Commercial Center

Chart of Accounts
Page Page
No. ASSETS No. Income
Current Assets 15 Sales
1 Cash in Bank 16 Sales Discount
2 Accounts Receivable 17 Sales Returns and Allowances
3 Estimated Uncollectible Accounts
4 Merchandise Inventory Costs
5 Supplies Inventory 18 Purchases
Property and Equipment 19 Purchase Discounts
6 Furniture and Equipment 20 Purchase Returns & Allowances
7 Acc. Dep’n – Furniture & Equipment 21 Freight-In
8 Transportation Equipment Expenses
9 Acc. Dep’n – Transportation Equipment 22 Freight-out
Liability 23 Salaries Expense
10 Accounts Payable 24 Utilities Expense
11 Accrued Expense 25 Taxes and License
Owner’s Equity 26 Supplies Expense
12 Jordan Alegre, Capital 27 Rental Expense
13 Jordan Alegre, Drawing 28 Uncollectible Account
14 Income & Expense Summary 29 Depreciation Expense

Mr. Jordan Alegre, after retiring from his business venture with Mr. Melvin Gutierrez have decided to start
with a business of his own under the trade name Davao Commercial Center. The following are the
transactions for the month of January 20A.

Jan. 1 – Mr. Jordan Alegre invested the following:

a) Bank deposit with Banco de Oro, P850,000
b) Merchandise with a fair value of P250,000
c) Furniture and Equipment with a fair value of P1,500,000
d) Service vehicle with a fair value of P1,800,000
e) Supplies Inventory valued at P15,000
2 – Purchased merchandise in cash from R. Calunsag Co. costing P150,000 and paid freight and
handling, P2,500
3 – Returned P3,000 cost of merchandise to R. Calunsag Co. due to some defects and no replacements
have been made.
5 – Sold merchandise for cash P120,000 to R. Gulang Grocery and gave a 3% trade discount and paid
freight on shipment, P3,500.
7 – Purchase merchandise on account from S. Madelo Co., P50,000. Term: 3/10, n/30.
8 – Sold merchandise on account to F. Ybanez Trading, P185,000. Term: 2/10, n/30. Paid freight on
shipment, P1,200.
9 – Purchased merchandise on account from E. Sardido C. costing P230,000. Term 2/10 EOM.
10 – Received P4,000 worth of merchandise from F. Ybanez Trading for not conforming with the
order and was not replaced.
12 – Paid the account with S. Madelo Co., P48,500 after availing of the 3% purchase discount.
13 – Sold merchandise on account to R. Langbid Co., P80,000. Term 2/10, n/30.
15 – Purchased merchandise on account from M. Cervantes Co., P70,000. Term: 3/10, n/30.
18 – Returned P1,500 cost of merchandise to M. Cervantes Co. due to bad order and was not
replaced.
- Collected in full the account of F. Ybanez Trading, P177,380.
20 – Sold merchandise for cash, P50,000 to R. Valle Enterprises and gave a 1% trade discount.
22 – Received P500 worth of merchandise from R. Valle Enterprises as item breakage and was not
replaced due to out of stock.
23 – Collected from R. Langbid Co. the amount of P78,400 net of 2% discount on Jan. 13 sales on
account.
26 – Sold merchandise on account to k. Peras Commercial, P420,000. Term: 3/10, EOM.
28 – Paid the following expenses:
 Salaries for the month P15,000
Light and Water bills (utilities expense) 5,800
Taxes and Licenses 6,500
Rent Expense 10,000
Total 37,300
30 – Withdrew P20,000 for personal use of M. Alegre.
31 – Sold merchandise on account to J. Mascarinas Co. P35,000. Term: 2/10, n/30.

Additional Information:
1. Merchandise inventory on January 331 conducted through physical count of unsold goods,
P190,000.
2. It is estimated that 1% of Accounts receivable is doubtful of collection.
3. Furniture and Equipment has an estimated useful life of 5 years without salvage value.
4. Service vehicle has an estimated useful life of 5 years with a salvage value of P150,000 at the end of
its life.
5. Of the supplies inventory of P15,000, P10,000 have been used-up.