Instructions: Illustrate the entire accounting cycle of a merchandising business using
sample transactions below of PHILASIA DISTRIBUTORS for the month of April, 2016 under
Perpetual Inventory System
CASE PROBLEM: PHILASIA DISTRIBUTORS
PHILASIA DISTRIBUTORS
April 1 The business PHILASIA DISTRIBUTORS was registered as a single
CHART OF ACCOUNTS
proprietorship with the Department of Trade and Industry.
Juan Lopez invested P19,000 Use for Journalizing and Posting to the Ledger
2 Bought computer equipment for 10,000 cash 100 ASSETS 400 INCOME
2 Bought merchandise on account from LOWTON Supply Co., P15,900, 101 CASH 401 SALES
terms 2/10, n/ 30 105 ACCOUNT RECEIVABLE 405 SALES RETURNS AND ALLOWANCES
3 Bought office supplies on cash basis for P700 115 MERCHANDISE INVENTORY 410 SALES DISCOUNTS
120 SUPPPLIES 500 EXPENSES
4 Sold merchandise on account P15,200, FOB Destination, terms 2/10,
150 EQUIPMENT 501 COST OF GOOD SOLS
n/30. The cost of merchandise sold was P12,200 to Team Power
200 LIABILITIES 503 ADVSERTISING EXPENSE
5 Paid P200 freight on April 4 sale.
210 ACCOUNTS PAYABLE 506 FREIGHT OUT
6 Received credit from LOWTON Supply Co. for merchandise returned 202 NOTES PAYABLE 510 RENT EXPENSES
P300.00 300 EQUITY 530 SALARIES
11 Paid LOWTON 310 LOPEZ, CAPITAL 540 UTILITIES
13 Collected from April 4 customers
302 LOPEZ, DRAWINGS 601 INCOME SUMMARY
14 Bought merchandise on cash basis for P14,400
15 Salaries paid P1,500 PHILASIA DISTRIBUTORS
CHART OF ACCOUNTS
16 Borrowed money from RCBC Bank signed a promissory note for
P12,000
Use for Financial Statement Preparation
100 ASSESTS 400 INCOME
17 Received refund from a supplier on cash purchase of April 14, P500
101 Cash & Cash Equivalents 401
18 Bought merchandise from MESDA, P14,200, FOB Shipping point, 105 Receivables 405 NET SALES
terms 2/10, n/30 115 Inventories 410
20 Paid freight on April 18 purchase P700
120 Prepaid Expenses 500 EXPENSES
150 Property, Plant & Equipment 501 Cost of Good Sold
23 Sold merchandise for P16,400. The merchandise sold had a cost of 200 LIABILITIES 503 Advertising Expense
P10,500 201 Accounts Payable 506 Freight Out
26 Bought merchnadise for cash P12,300 202 Notes Payable 510 Rent Expense
300 EQUITY 530 Salaries
27 Paid MESDA on the April 18 purchase, P9,000. No discount allowed
on partial payment. 301 Lopez, Capital 540 Utilities
302 Lopez, Drawings
28 J. Lopez got cash from the business P2,008
29 Made refund to cash customers for defective merchandise, P900
30 Sold merchandise on account P13,700, n/30 Cost of merchnadise
sold is P11,000
30 Paid the following: Advertising P1,000, Utilities P400, Rent P3,500,
Salaries, P1,500
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GENERAL JOURNAL
GENERAL JOURNAL
PAGE NUMBER 1
PAGE NUMBER 2
DATE DATE DESCRIPTION
DESCRIPTION REF DEBIT DEBIT CREDIT CREDIT
REF
2|Page
GENERAL JOURNAL GENERAL LEDGER GL 1
Account 101 CASH
PAGE NUMBER 3
Balance
DATE DESCRIPTION REF DEBIT CREDIT Date Item Post Debit Credits Debit Credit
Account 105 ACCOUNTS RECEIVABLE
Balance
Date Item Post Debit Credits Debit Credit
Account 115 MERCHANDISE INVENTORY
Balance
Date Item Post Debit Credits Debit Credit
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GENERAL LEDGER LEDGER
GENERAL GL 2 GL 3
AccountAccount120 401 SUPPLIES SALES
Balance Balance
Date Item Post Debit Credits Debit Credit
Date Item Post Debit Credits Debit Credit
Account 150 EQUIPMENT
Balance
Date ItemAccountPost 405 Debit Credits DebitALLOWANCES
SALES RETURN AND Credit
Balance
Date Item Post Debit Credits Debit Credit
Account 201 ACCOUNTS PAYABLE
Balance
Date Item Post Debit Credits Debit Credit
Account 410 SALES DISCOUNTS
Balance
Date Item Post Debit Credits Debit Credit
Account 202 NOTES PAYABLE
Balance
Date Item Post Debit Credits Debit Credit
Account 501 COST OF GOOD SOLS
Balance
Date Item Post Debit Credits Debit Credit
Account 301 LOPEZ, CAPITAL
Balance
Date Item Post Debit Credits Debit Credit
Account 503 ADVERTISING EXPENSE
Account 302 LOPEZ, DRAWING Balance
Date Item Post Debit Credits Balance
Debit Credit
Date Item Post Debit Credits Debit Credit
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GENERAL LEDGER GL 4
Account 506 FREIGHT OUT
Balance
Date Item Post Debit Credits Debit Credit
Account 510 RENT EXPENSE
Balance
Date Item Post Debit Credits Debit Credit
Account 530 SALARIES
Balance
Date Item Post Debit Credits Debit Credit
Account 540 UTILITIES
Balance
Date Item Post Debit Credits Debit Credit
Account 600 INCOME SUMMARY
Balance
Date Item Post Debit Credits Debit Credit
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PHILASIA DISTRIBUTORS
TRIAL BALANCE
APRIL 30, 2016
ACCOUNT TITLES DEBIT CREDIT
101 Cash
105 Accounts Receivable
115 Merchandise Inventory
120 supplies
150 Equipment
201 Accounts Payable
202 Notes Payable
301 Lopez, Capital
302 Lopez, Drawings
401 SALES
405 Sales Return
410 Sales Discount
501 Cost of Good Sold
503 Advertising
506 Freight Out
510 Rent
530 Salaries
540 Utilities
TOTALS
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PHILASIA DSITRIBUTORS
STATEMENT OF FINANCIAL POSITION
APRIL 30, 2016
(IN PESOS)
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS
RECEIVABLES
INVENTORIES
PREPAID EXPENSES
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
PROPERTY, PLANT & EQUIPMENT
TOTAL ASSETS
LIABILITIES & EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE
NON CURRENT LIABILITIES
NOTES PAYABLE
TOTAL LIABILITIES
OWNER'S EQUITY
LOPEZ CAPITAL
TOTAL LIABILITIES AND EQUITY
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PHILASIA DSITRIBUTORS
PHILASIA DSITRIBUTORS
STATEMENT OF CASH FLOWS
STATEMENT OF PERFORMANCE
APRIL 30, 2016
FOR THE PERIOD ENDED APR 30, 2016 (IN PESOS)
(IN PESOS) CASH FLOW FROM OPERATING ACTIVITIES
CASH RECEIVED FROM
NET SALES SALES
LESS: COST OF SALES RECEIVABLE COLLECTION
GROSS PROFIT REFUND FROM PURCHASES
LESS: OPERATING EXPENSES PAYMENT FOR
FREIGHT OUT OFFICE SUPPLIES
ADVERTISING FREIGHT ON SOLD GOODS
GOODS BOUGHT
RENT
OPEX OPERATING EXPENSES
SALARIES
REFUND TO CUSTOMERS
UTILITIES
FREIGHT PURCHASES
TOTAL EXPENSES NET CASH FLOW FROM OPERATING ACTIVITIES
NET PROFIT
CASH FLOW FROM INVESTING ACTIVITIES
COMPUTER EQUIPMENT BOUGHT
PHILASIA DSITRIBUTORS
CASH FLOW FROM FINANCING ACTIVITIES
STATEMENT OF EQUITY INITIAL INVESTMENTS
FOR THE PERIOD ENDED APR 30, 2016 BORROWINGS
(IN PESOS) DRAWINGS
NET CASH FLOW FROM FINANCING ACTIVITIES
J. LOPEZ, CAPITAL INCREASE IN CASH AND CASH EQUIVALENTS
INITIAL INVESTMENT ADD CASH AND CASH EQUIVALENTS, BEG
CASH AND CASH EQUIVALENTS, APR 30
DRAWINGS
NET PROFIT
J. LOPEZ, CAPITAL APRIL 30
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GENERAL JOURNAL GJ 4 CLOSING JOURNAL ENTRIES
DATE DESCRIPTION REF DEBIT CREDIT
April 30 SALES
PHILASIA DISTRIBUTORS
INCOME SUMMARY
POST CLOSING TRIAL BALANCE
SALES RETURN & ALLOWANCES APRIL 30, 2016
SALES DISCOUNTS (IN PESOS)
DEBIT CREDIT
INCOME SUMMARY 101 Cash
COST OF GOOD SOLD 105 Accounts Receivable
ADVERTISING 115 Merchandise Inventory
FREIGHT OUT 120 supplies
RENT 150 Equipment
SALARIES 201 Accounts Payable
202 Notes Payable
UTILITIES
301 Lopez, Capital
TOTALS
INCOME SUMMARY
J. LOPEZ, CAPITAL
J. LOPEZ ,CAPITAL
J. LOPEZ, DRAWING
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CASE PROBLEM 2 SET 1
2.1 Fax company borrowed P100,000 on December 1 by signing a six month note that specifies interest ACCOUNTING
at an annual percentage rate (APR) of 12%. No interest or principal payment is due until the note PRACTICE SET 1
matures on May 31. FAX Company prepares financial statements at the end of each calendar month.
Provide an answer for the month end of January only. FOR
MERCHANDISING BUSINESS
2.2 In December 1, box paid its insurance agent P2,400 for the annual insurance premuim covering the
twelve month period beginning on December 1. The 2,400 payment was recorded on December 1
with a debit to the current asset Prepaid Insurance and a credit ton the current cash. Box Company
prepares monthly financial statements at the end of each calendar month. Provide as answer for the
month ean of March only.
2.3 On December 1, SOX began Operations. On December 4 , it purchased P1,500 of supplies and
recorded the transaction with a debit to the income statement account supplies expense and a
credit to the current liability account payable. SOX prepares monthly finacial statements at the end
of each calendar month. At the end of the day on December 31, SOX Company estimated that P700
of the supplies were still on hand in the supply room.
NAME:
___________________________________________
Requirement: answewr the questions pertaining tonthe adjustingf entries for each the three cases . Use the
answer sheet provided for Case 2 Set1 GRADE/ SECTION:
What is the… CASE 2.1 CASE 2.2 CASE 2.3
________________________________________
Date of adjusting entry
Debit account title
Credit account title
Debit & Credit Amount
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