MERCHANDISING BUSINESS

Comprehensive Problem:
Plastic Sia is the leading distributor of plastic wares in Pasig.
Listed below are the Feb. 1, 2021 account balances of the Plastic Sia Company:

110 Cash P 33,000

120 Accounts Receivable 192,000
130 Merchandise Inventory 413,000
140 Supplies 51,000
150 Prepaid Insurance 48,000
160 Land 460,000
170 Building 1,750,000
175 Accumulated Depreciation-Building P 350,000
180 Equipment 2,310,000
185 Accumulated Depreciation-Equipment 630,000
210 Accounts Payable 108,000
220 Salaries Payable
230 Mortgage Payable 2,600,000
310 Sia, Capital 1,569,000
320 Sia, Drawing
330 Income Summary
410 Sales
420 Sales Return and Allowances
430 Sales Discount
510 Purchases
520 Purchases Return and Allowances
530 Purchase Discount
540 Transportation In
610 Salaries Expense
620 Supplies Expense
630 Insurance Expense
640 Depreciation Expense-Building
650 Depreciation Expense-Equipment
660 Transportation Out
670 Advertising Expense
P 5,257,000 P 5,257,000

During the month of February 2021, the following transaction occurred:

Feb. 1 Collected P113,000 from customers on account.
Feb. 2 Paid P64,000 of accounts due less discounts of 3%
Feb. 4 Purchased merchandise, 170,000. Terms: FOB shipping point; 3/10, n/30.
Feb. 5 Sold merchandise on account to Gonzales Inc., P270,000. Terms: FOB shipping point; 2/10, n/30.
Feb. 7 Paid for advertising for the month of February, P6,000.
Feb. 7 Sold merchandise for cash P250,000
Feb. 8 Paid the amount due from the Feb. 4 transaction.
Feb. 9 Paid freight P4,000 for delivering merchandise last Feb. 4
Feb. 10 Received return from Gonzales Inc., P70,000
Feb. 12 Received payment from Gonzales Inc., less returns and discounts.
Feb. 15 Paid salaries P51,000.
Feb. 16 Sold merchandise on account to Ronzalez Corp., P392,000. Terms: FOB Destination; 2/10, n/30
Feb. 18 Paid P4,000 freight charges on the sale of Feb. 16
Feb. 19 Acquired supplies for cash, P21,000.
Feb. 23 Received payment from Ronzales Corp., less discounts.
Feb. 28 Sia withdrew P400,000 from the business

Prepare the worksheet using the following information:

a. Salaries in the amount of P51,000 have accrued on Feb. 28
b. Insurance coverage with premiums of P2,000 has expired at month end.
c. Depreciation on the building and on the equipment for the month amounted to P9,000 and P12,000 repectively.
d. Supplies on hand at month end amounted to P14,000.
e. A count of the merchandise inventory on Feb. 28, 2021 amounted to P397,000.
000 repectively.
 GENERAL JOURNAL
Date Account Titles and Explanation PR Debit Credit
2021
Feb. 1 Cash 113,000
Accounts Receivable 113,000

2 Accounts Payable 64,000

Purchased Discount 1,920
Cash 62,080

4 Purchases 170,000
Accounts Payable 170,000

5 Accounts Receivable 270,000

Sales 270,000

7 Advertising Expense 6,000

Cash 6,000

7 Cash 250,000
Sales 250,000

8 Accounts Payable 170,000

Cash 170,000

9 Transportation In 4,000
Cash 4,000

10 Sales Return & Allowances 70,000

Cash 70,000

12 Cash 194,600
Sales Discount 5,400
Sales Return & Allowances 70,000
Accounts Receivable 270,000

15 Salaries Expense 51,000

Cash 51,000

16 Accounts Receivable 392,000

Sales 392,000

18 Transportation Out 4,000

Cash 4,000

19 Supplies 21,000
 Cash 21,000

23 Cash 384,160
Sales Discount 7,840
Accounts Receivable 392,000

28 Sia, Drawing 400,000

Cash 400,000

Salaries Expense 51,000

Salaries Payable 51,000

Insurance Expense 2,000

Prepaid Insurance 2,000

Depreciation Expense-Building 9,000

Accumulated Depreciation-Building 9,000

Depreciation Expense-Equipment 12,000

Accumulated Depreciation-Equipment 12,000

Supplies Expense 16,000

Merchandise Inventory 16,000
 GENERAL LEDGER

110 CASH 120 ACCOUNTS RECEIVABLE 130

1-Feb 33,000 62,080 2-Feb 1-Feb 192,000 113,000 1-Feb 1-Feb
1-Feb 113,000 6,000 7-Feb 5-Feb 270,000 270,000 12-Feb
7-Feb 250,000 170,000 8-Feb 16-Feb 392,000 392,000 23-Feb
12-Feb 194,600 4,000 9-Feb 854,000 775,000
23-Feb 384,160 70,000 10-Feb 79,000
51,000 15-Feb
4,000 18-Feb
21,000 19-Feb
400,000 28-Feb
974,760 788,080
186,680

140 SUPPLIES 150 PREPAID INSURANCE 160

1-Feb 51,000 1-Feb 48,000 2,000 28-Feb 1-Feb
19-Feb 21,000 46,000
72,000

170 BUILDING 175 ACCU DEP-BUILDING 180

1-Feb 1,750,000 350,000 1-Feb 1-Feb
9,000 28-Feb
359,000

185 ACCU DEP-EQUIPMENT 210 ACCOUNTS PAYABLE 220

630,000 1-Feb 2-Feb 64,000 108,000 2-Feb
12,000 28-Feb 8-Feb 170,000 170,000 4-Feb
642,000 234,000 278,000
44,000

230 MORTGAGE PAYABLE 310 SIA, CAPITAL 320

2,600,000 1-Feb 1,569,000 1-Feb

330 INCOME SUMMARY 410 SALES 420

837,000 270,000 5-Feb 10-Feb
 250,000 7-Feb 12-Feb
392,000 16-Feb
912,000

430 SALES DISCOUNT 510 PURCHASES 520

12-Feb 5,400 4-Feb 170,000
23-Feb 7,840
13,240

540 TRANSPORTATION IN 610 SALARIES EXPENSE 620

9-Feb 4,000 28-Feb 51,000 28-Feb

630 INSURANCE EXPENSE 640 DEP EXP-BUILDING 650

28-Feb 2,000 28-Feb 9,000 28-Feb

660 TRANSPORTATION OUT 670 ADVERTISING EXPENSE

18-Feb 4,000 7-Feb 6,000
MERCHANDISE INVENTORY
413,000 16,000 28-Feb
397,000

LAND
460,000

EQUIPMENT
2,310,000

SALARIES PAYABLE
51,000 28-Feb

SIA, DRAWING
400,000

SALES RETURN AND ALLOW.

70,000
 70,000
140,000

PURCHASE DISCOUNT
1,920 2-Feb

SUPPLIES EXPENSE
16,000

DEP EXP-EQUIPMENT
12,000
 Plastic Sia Trading
Preliminary Trial Balance
February 28, 2021

Cash 186,680
Accounts Receivable 79,000
Merchandise Inventory 397,000
Supplies 72,000
Prepaid Insurance 46,000
Land 460,000
Building 1,750,000
Accumulated Depreciation-Building 359,000
Equipment 2,310,000
Accumulated Depreciation-Equipment 642,000
Accounts Payable 44,000
Salaries Payable 51,000
Mortgage Payable 2,600,000
Sia, Capital 1,569,000
Sia, Drawing 400,000
Income Summary 837,000
Sales 912,000
Sales Return and Allowances 140,000
Sales Discount 13,240
Purchases 170,000
Purchases Return and Allowances 140,000
Purchase Discount 1,920
Transportation In 4,000
Salaries Expense 51,000
Supplies Expense 16,000
Insurance Expense 2,000
Depreciation Expense-Building 9,000
Depreciation Expense-Equipment 12,000
Transportation Out 4,000
Advertising Expense 6,000
Total 6,267,920 7,015,920 748,000

Prepared by:

Bookkeeper
ADJUSTING ENTRIES:
GENERAL JOURNAL
Date Account Titles and Explanation PR Debit Credit
2021
 WORKSHEET

Unadjusted Trial Balance Adjustments Adjusted Trial Balance

Account Name
Debit Credit Debit Credit Debit Credit

Total
Profit/Loss
Total
Income Statement Balance Sheet
Debit Credit Debit Credit
 Plastic Sia Company
Income Statement
For the Month Ended February 28, 2021

Net Sales
Gross Sales P
Less: Sales Return and Allowances
Sales Discounts
Net Sales
Cost of Sales
Mdse Inventory, 02/01/2021
Purchases
Less: Purchase Return and Allow.
Purchase Discount
Net Purchases
Transportation In
Net Cost of Purchases
Goods Available for Sale
Less: Mdse Inventory, 02/28/2021
Cost of Sales
Gross Profit
Less: Operating Expenses
Salaries Expense
Supplies Expense
Insurance Expense
Depreciation Expense-Building
Depreciation Expense-Equipment
Transportation Out
Advertising Expense
Net Profit P

Prepared by:

Bookkeeper
 Plastic Sia Company
Statement of Changes in Equity
For the month ended February 28, 2021

P. Sia, Owner's Equity, 02/01/2021

Add: Profit
Total
Less: Sia, Drawing
P. Sia, Owner's Equity, 02/28/2021

Prepared by:

Bookkeeper
Plastic Sia Company
Balance Sheet
For the month ended February 28, 2021

Assets
Current Assets
Cash P
Accounts Receivable
Merchandise Inventory
Supplies
Prepaid Insurance
Total Current Assets

Property and Equipment (net)

Land
Building P
Less: Accumulated Depreciation-Building
Equipment
Less: Accumulated Depreciation-Equipment
Total Assets

Liabilities
Current Liabilities
Accounts Payable P
Salaries Payable
Total Current Liabilities P
Non Current Liabilities
Mortgage Payable
Total Liabilities

Owner's Equity
P. Sia, Capital, 02/28/2021
Total Liabilities and Owners's Equity

Prepared by:

Bookkeeper
CLOSING ENTRIES
GENERAL JOURNAL
Date Account Titles and Explanation PR Debit Credit
2021
Plastic Sia Trading
Post Closing Trial Balance
February 28, 2021

Cash P
Accounts Receivable
Merchandise Inventory
Supplies
Prepaid Insurance
Land
Building
Accumulated Depreciation-Building P
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Salaries Payable
Mortgage Payable
Sia, Capital
Total

Prepared by:

Bookkeeper