EXERCISE – PERIODIC

Avie Trading engaged in the following transactions in September 2018.

Cash and Cash Equivalents P50,000
Receivables 25,000
Inventories 10,000
Prepaid Expenses 5,000
Accounts Payable 30,000
Avie, Capital 60,000
TOTAL P90,000 P90,000

Sept. 1 Sold merchandise to Lacierda Trading on credit, terms 2/10, n/30, FOB Shipping point, 21,000. Cost of
Merchandise ws P18,000.
3 Purchase merchandise on credit from Malaya Store, terms 3/10, n/30, FOB Shipping point, P38,000.
5 Paid South Trans Freight for freight charges on merchandise received, P290.
6 Purchased supplies on credit from Feb Supplies, terms, n/20, P6,360.
8 Purchased merchandise on credit from Pagadian Company, terms n/30, FOB Shipping Point, P36,000.
12 Returned some of the merchandise received on Sept. 3 for credit, P6,000.
15 Sold merchandise on credit to Columban Stores, terms n/30, FOB Shipping point, P12,000. Cost of
Merchandise was P10,000.
16 Returned some of the store supplies purchased on Sept. 6 for credit, P2,000.
17 Sold merchandise for cash, P10,000. Cost of merchandise was P8,000.
18 Accepted for full credit a return from Lacierda Trading, P2,000. Cost of Merchandise was P1,500.
24 Paid accounts to Malaya Stores.
Invested additional cash, P10,000.
25 Received full payment from Lacierda Trading.
26 Paid the following: Salaries, P3,000, Rent P500, Utilities P1,000 and Advertising P1,500
30 Inventory September 30, P28,000.

CHART OF ACCOUNTS CHART OF ACCOUNTS

(Use for Journalizing and Posting to the ledger) (Use for Financial Statement Preparation)
ASSETS ASSETS
100 Cash 100 Cash And Cash Equivalents
110 Accounts Receivable 110 Receivables
120 Merchandise Inventory 120 Inventories
130 Store Supplies 130 Prepaid Expenses
140 Equipment 140 Property, Plant And Equipment
LIABILITIES LIABILITIES
200 Accounts Payable 200 Accounts Payable
210 Notes Payable 210 Notes Payable
OWNER’S EQUITY OWNER’S EQUITY
300 Avie, Capital 300 Avie, Capital
310 Avie, Drawing 310 Avie, Drawing
INCOME INCOME
400 Sales 400
410 Sales Returns And Allowances 410 Net Sales
420 Sales Discount 420
EXPENSES EXPENSES
500 Purchases 500
501 Purchase Returns & Allowances 501
Cost Of Goods Sold
502 Purchase Discount 502
503 Freight- in 503
510 Salaries Expense 510 Salaries Expense
520 Rent Expense 520 Rent Expense
530 Freight- Out 530 Freight- Out
540 Advertising Expense 540 Advertising Expense
550 Utilities Expense 550 Utilities Expense
560 Income Summary 560 Income Summary

Requirement: Prepare the following:

1. Income Statement
2. Balance Sheet
3. Statement of Changes in Equity
4. Statement of Cash Flows
5. Post-closing Trial Balance
INDEPENDENT CASES

1. A 6 – month, 12% note was issued for P50,000 for money borrowed on June 1. No interest or principal payment is
due until the note matures on Nov. 31. The financial statement is prepared on a monthly basis. Provide your answer
for the month of July.
2. ABC Company received a 10%, P210,000, 2-year note from a customer on November 1, 2018. Both principal and
interest on the note are due on November 1, 2020. The financial statement is prepared on a monthly basis. Provide
your answer for the month of November 2018.
3. Office supplies of P6,000 were bought on Feb. 1 recognizing Supply Expense account and accounts payable. The
financial statement is prepared on a monthly basis. At the end of Feb, office supplies worth P2,000 on hand.
4. OB Company’s unadjusted trial balance as of year-end shows office supplies of P30,000. The year-end supplies
on hand revealed an amount of P14,000. What is the adjusting entry on December 2018?
5. Y Company purchased 1- year insurance policy on March 1 and debited Premium Insurance for P2,400. The
financial statement is prepared on a monthly basis. Prepare your answer for the month end of June.

Required: Prepare necessary adjusting entries for each and indicate the specific date.

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 EXERCISE – PERPETUAL

Avie Trading engaged in the following transactions in September 2018.

Cash and Cash Equivalents P50,000
Receivables 25,000
Inventories 10,000
Prepaid Expenses 5,000
Accounts Payable 30,000
Avie, Capital 60,000
TOTAL P90,000 P90,000

Sept. 1 Sold merchandise to Lacierda Trading on credit, terms 2/10, n/30, FOB Shipping point, 21,000. Cost of
Merchandise was P18,000.
3 Purchase merchandise on credit from Malaya Store, terms 3/10, n/30, FOB Shipping point, P38,000.
5 Paid South Trans Freight for freight charges on merchandise received, P290.
6 Purchased supplies on credit from Feb Supplies, terms, n/20, P6,360.
8 Purchased merchandise on credit from Pagadian Company, terms n/30, FOB Shipping Point, P36,000.
12 Returned some of the merchandise received on Sept. 3 for credit, P6,000.
15 Sold merchandise on credit to Columban Stores, terms n/30, FOB Shipping point, P12,000. Cost of
Merchandise was P10,000.
16 Returned some of the store supplies purchased on Sept. 6 for credit, P2,000.
17 Sold merchandise for cash, P10,000. Cost of merchandise was P8,000.
18 Accepted for full credit a return from Lacierda Trading, P2,000. Cost of Merchandise was P1,500.
24 Paid accounts to Malaya Stores.
Invested additional cash, P10,000.
25 Received full payment from Lacierda Trading.
26 Paid the following: Salaries, P3,000, Rent P500, Utilities P1,000 and Advertising P1,500

CHART OF ACCOUNTS CHART OF ACCOUNTS

(Use for Journalizing and Posting to the ledger) (Use for Financial Statement Preparation)
ASSETS ASSETS
100 Cash 100 Cash And Cash Equivalents
110 Accounts Receivable 110 Receivables
120 Merchandise Inventory 120 Inventories
130 Store Supplies 130 Prepaid Expenses
140 Equipment 140 Property, Plant And Equipment
LIABILITIES LIABILITIES
200 Accounts Payable 200 Accounts Payable
210 Notes Payable 210 Notes Payable
OWNER’S EQUITY OWNER’S EQUITY
300 Avie, Capital 300 Avie, Capital
310 Avie, Drawing 310 Avie, Drawing
INCOME INCOME
400 Sales 400
410 Sales Returns And Allowances 410 Net Sales
420 Sales Discount 420
EXPENSES EXPENSES
500 Cost of Goods Sold 500 Cost of Goods Sold
510 Salaries Expense 510 Salaries Expense
520 Rent Expense 520 Rent Expense
530 Freight- Out 530 Freight- Out
540 Advertising Expense 540 Advertising Expense
550 Utilities Expense 550 Utilities Expense
560 Income Summary 560 Income Summary

Requirement: Prepare the following:

6. Income Statement
7. Balance Sheet
8. Statement of Changes in Equity
9. Statement of Cash Flows
10. Post-closing Trial Balance

INDEPENDENT CASES
 6. A 6 – month, 12% note was issued for P50,000 for money borrowed on June 1. No interest or principal payment is
due until the note matures on Nov. 31. The financial statement is prepared on a monthly basis. Provide your answer
for the month of July.
7. ABC Company received a 10%, P210,000, 2-year note from a customer on November 1, 2018. Both principal and
interest on the note are due on November 1, 2020. The financial statement is prepared on a monthly basis. Provide
your answer for the month of November 2018.
8. Office supplies of P6,000 were bought on Feb. 1 recognizing Supply Expense account and accounts payable. The
financial statement is prepared on a monthly basis. At the end of Feb, office supplies worth P2,000 on hand.
9. OB Company’s unadjusted trial balance as of year-end shows office supplies of P30,000. The year-end supplies
on hand revealed an amount of P14,000. What is the adjusting entry on December 2018?
10. Y Company purchased 1- year insurance policy on March 1 and debited Premium Insurance for P2,400. The
financial statement is prepared on a monthly basis. Prepare your answer for the month end of June.

Required: Prepare necessary adjusting entries for each and indicate the specific date.

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”Choosing to be positive and having a grateful attitude will determine how you’re going to live your life”.