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Problem 1: Paul Dee registered his business PD Merchandising with DTI and started operation on May of the
current year. Below are the transactions of his business during the month of May.
Required:
1. Prepare Journal Entries
2. Post the Journal Entries to the Ledger
3. Prepare Trial Balance
4. Prepare Income Statement
5. Prepare Statement of Changes in Owner’s Equity
6. Prepare Balance Sheet
7. Prepare Statement of Cash Flow
8. Prepare Closing Entries.
9. Prepare Post-Closing Trial Balance
CHART OF ACCOUNTS FOR JOURNALIZING TRANSACTION
GENERAL LEDGER
Account Number: 103 Account Name: ACCOUNTS RECEIVABLE
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 10 Aking Trading – 2/10, n/30 GJ-1 20,000 20,000
18 Sales – 2/10, n/eom GJ-2 28,000 48,000
23 Sales – 2/10, n/30, and Freight prepaid, 200 GJ-2 12,200 60,200
28 Collection – May 18 sales GJ-3 28,000 32,200
GENERAL LEDGER
Account Number: 104 Account Name: SUPPLIES
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 16 Credit GJ-2 900 900
GENERAL LEDGER
Account Number: 115 Account Name: MERCHANDISE INVENTORY
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 04 Purchases GJ-1 24,000 24,000
04 Freight In GJ-1 1,000 25,000
06 Cost of sales GJ-1 11,550 13,440
09 Purchases GJ-1 20,000 33,450
10 Cost of sales GJ-1 12,500 20,950
12 Purchase returns GJ-1 500 20,450
14 Purchase discounts GJ-1 470 19,980
17 Purchases GJ-2 40,000 59,980
18 Cost of sales GJ-2 21,000 38,980
22 Cash refund from suppliers GJ-2 850 38,130
23 Cost of sales GJ-2 8,400 29,730
24 Cash refund from suppliers GJ-2 7,500 22,230
GENERAL LEDGER
Account Number: 121 Account Name: STORE EQUIPMENT
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 05 Cash GJ-1 45,000 45,000
21 Freight GJ-3 1,500 46,500
GENERAL LEDGER
Account Number: 123 Account Name: DELIVERY EQUIPMENT
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 08 Additional investment GJ-1 80,000 80,000
GENERAL LEDGER
Account Number: 211 Account Name: ACCOUNTS PAYABLE
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 04 ABC Mktg. – 2/10, n/20 GJ-1 24,000 24,000
12 Purchase returns – ABC GJ-1 500 23,500
14 Payment – ABC GJ-1 23,500 0
16 Supplies GJ-2 900 900
GENERAL LEDGER
Account Number: 221 Account Name: NOTES PAYABLE
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 16 Cash Loan – Land Bank GJ-2 100,000 100,000
GENERAL LEDGER
Account Number: 301 Account Name: P. DEE, CAPITAL
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 03 Cash GJ-1 80,000 80,000
08 Cash and Delivery equipment GJ-1 130,000 210,000
31 Income summary GJ-4 12,640 222,640
31 Drawing GJ-4 2,200 220,440
GENERAL LEDGER
Account Number: 302 Account Name: P. DEE, DRAWING
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 25 Cash GJ-3 2,200 2,200
31 Closing GJ-4 2,200 0
GENERAL LEDGER
Account Number: 303 Account Name: INCOME SUMMARY
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 31 Sales GJ-4 73,940 73,940
31 Cost of Goods Sold and Expense GJ-4 61,300 12,640
31 Closing GJ-4 12,640 0
GENERAL LEDGER
Account Number: 401 Account Name: SALES
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 06 Cash GJ-1 17,000 17,000
10 Credit GJ-1 20,000 37,000
18 Credit GJ-2 28,000 65,000
23 Credit GJ-2 12,000 77,000
31 Closing GJ-4 77,000 0
GENERAL LEDGER
Account Number: 402 Account Name: SALES RETURNS AND ALLOWANCES
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 16 May 16 sales GJ-2 2,500 2,500
31 Closing GJ-4 2,500 0
GENERAL LEDGER
Account Number: 403 Account Name: SALES DISCOUNTS
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 28 May 18 sales GJ-3 560 560
31 Closing GJ-4 560 0
GENERAL LEDGER
Account Number: 502 Account Name: COST OF GOODS SOLD
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 06 Cash GJ-1 11,550 11,550
10 Credit GJ-1 12,500 24,050
18 Credit GJ-2 21,000 45,050
23 Credit GJ-2 8,400 53,450
31 Closing GJ-4 53,450 0
GENERAL LEDGER
Account Number: 604 Account Name: FREIGHT OUT
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 13 Cash GJ-1 450 450
20 Cash GJ-2 700 1,150
31 Closing GJ-4 1,150 0
GENERAL LEDGER
Account Number: 607 Account Name: FUEL EXPENSE
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 31 Cash GJ-3 800 800
31 Closing GJ-4 800 0
GENERAL LEDGER
Account Number: 610 Account Name: SALARY EXPENSE
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 15 Cash GJ-2 1,500 1,500
30 Cash GJ-3 1,500 3,000
31 Closing GJ-4 3,000 0
GENERAL LEDGER
Account Number: 612 Account Name: RENT EXPENSE
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 31 Cash GJ-3 2,500 2,500
31 Closing GJ-4 2,500 0
GENERAL LEDGER
Account Number: 615 Account Name: UTILITIES
BALANCE
20XX PARTICULARS P.R. DEBIT CREDIT
DEBIT CREDIT
May 31 Cash GJ-3 400 400
31 Closing GJ-4 400 0
PD MERCHANDISING
TRIAL BALANCE (UNADJUSTED)
MAY 31, 20XX
ACCOUNT
NUMBER ACCOUNT NAME DEBIT CREDIT
101 Cash 139,510
103 Accounts Receivable 32,200
104 Supplies 900
115 Merchandise Inventory 22,230
121 Store Equipment 46,500
123 Delivery Equipment 80,000
211 Accounts Payable 900
221 Notes Payable 100,000
301 P. Dee, Capital 210,000
302 P. Dee, Drawing 2,200
401 Sales 77,000
402 Sales Returns and Allowances 2,500
403 Sales Discounts 560
502 Cost of Goods Sold 53,450
604 Freight Out 1,150
607 Fuel Expense 800
610 Salary Expense 3,000
612 Rent Expense 2,500
615 Utilities 400
TOTALS 387,900 387,900
NOTE: Amounts are based on ledger balances before closing the accounts.
PD MERCHANDISING
INCOME STATEMENT
MAY 31, 20XX
Sales 77,000
Less: Sales Returns and Allowances 2,500
Sales Discounts 560 3,060
Net Sales 73,940
Less: Cost of Goods Sold 53,450
Gross Profit 20,490
Less: Operating Expenses:
Freight Out 1,150
Fuel Expense 800
Salary Expense 3,000
Rent Expense 2,500
Utilities 400
Total Operating Expenses 7,850
Net Profit 12,640
PD MERCHANDISING
STATEMENT OF CHANGES IN OWNER’S EQUITY
MAY 31, 20XX
PD MERCHANDISING
BALANCE SHEET
MAY 31, 20XX
ASSETS
Current Assets:
Cash and Cash Equivalents 139,510
Accounts Receivable 32,200
Supplies 900
Merchandise Inventory 22,230
Total Current Assets 194,840
Non-Current Assets:
Store Equipment 46,500
Delivery Equipment 80,000
Total Non-Current Assets 126,500
Total Assets 321,340
NOTE: Amounts are based on ledger balances after closing the accounts.
PD MERCHANDISING
STATEMENT OF CASH FLOW
MAY 31, 20XX
PD MERCHANDISING
POST-CLOSING TRIAL BALANCE
MAY 31, 20XX
ACCOUNT
NUMBER ACCOUNT NAME DEBIT CREDIT
101 Cash 139,510
103 Accounts Receivable 32,200
104 Supplies 900
115 Merchandise Inventory 22,230
121 Store Equipment 46,500
123 Delivery Equipment 80,000
211 Accounts Payable 900
221 Notes Payable 100,000
301 P. Dee, Capital 220,440
TOTALS 321,340 321,340
NOTE: Amounts are based on ledger balances after closing the accounts.
Problem 2: Adjusting Entries (3 cases, 4 points each case) Study na lang ang mga adjusting entries:
a. Accrual of Income: Income Method and Liability Method (Original Entry Assumption: Income Method)
b. Accrual of Expense: Expense Method and Asset Method (Original Entry Assumption: Asset Method)
GOD BLESS AND GOOD LUCK!