Problem 3

June 1 Kamille opened the TAJ Merchandising Business by putting in cash P50,000 and
merchandise of P30,000.
2 Bought computer equipment for P10,000 cash.
2 Bought merchandise on account from F4 Supply Co. P15,600, terms 2/10, n/30.
3 Bought office supplies on cash basis P850.
4 Sold merchandise on account P20,500, FOB Destination, terms, 2/10, n/30.
5 Paid P500 freight on June 4 sales.
6 Returned merchandise, P500 to F4 Supply company and received credit from the company.
11 Paid the merchandise bought on account from F4 company.
13 Collected from customers their accounts on June 4 sales.
14 Bought merchandise on cash basis for P16,400.
15 Paid salaries of workers P2,500.
16 Borrowed money from East West Bank, signed a promissory note for P12,500.
17 Received refund from a supplier on cash purchase of June 14, P900.
18 Bought merchandise from MAJA, P14,500, FOB shipping point, terms 2/10, n/30.
20 Paid Freight on June 18 purchase P700.
23 Sold merchandise for P18,500.
26 Bought merchandise for cash, P12,500.
27 Paid MAJA on the April 18 purchase, P9,000. No discount allowed on partial payment.
28 Kamille withdrew cash from the business for personal use, P3,500.
29 Made refund to cash customers for defective merchandise, P900.
30 Sold merchandise on account, P13,700, n/30.
30 Paid the following: Advertising, P1,000; Utilities, P500; Rent P3,500; salaries, P2,500.
30 Inventory June 30, P15,000.

Chart of Accounts
USE FOR JOURNALIZING AND POSTING TO THE LEDGER
100 Assets 400 Income
110 Cash 410 Sales
120 Account Receivable 420 Sales Returns and Allowances
130 Merchandise Inventory 430 Sales Discount
140 Supplies 500 Expenses
170 Equipment 510 Purchases
200 Liabilities 520 Purchase Returns and Allowances

210 Accounts Payable 530 Purchase Discounts

220 Notes Payable 540 Freight in
300 Equity 550 Advertising
310 Kamille, Capital 560 Freight out
320 Kamille, Drawings 570 Rent Expense
590 Utilities
600 Income Summary

Requirements:

(1) Journalize the transactions (2) Post Transactions (3) Trial Balance (4) Worksheet
(5) Statement of financial Position (6) Statement of financial Operation (7) statement of changes in Equity

General Journal Page 1

Date Account Titles Ref Debit Credit
2018
JUNE 1 Cash 110 ₱50,000
Merchandise Inventory 130 30,000
Kamille Capital 320 ₱80,000
Initial investment

2 Equipment 170 10,000

Cash 110 10,000
Bought Equipment

2 Purchases 510 15,600

Accounts Payable 210 15,600
Bought merchandise

3 Supplies 140 850

Cash 110 850
Bought office supplies

4 Accounts Receivable 120 20,500

Sales 410 20,500
Sold merchandise

5 Freight out 560 500

Cash 110 500
Paid freight out

6 Accounts Payable 210 500

Purchase Returns and allowances 520 500
Returned merchandise

11 Accounts Payable 210 15,100

Cash 110 14,798
Purchase Discounts 530 302
Paid merchandise.

13 Cash 110 20,090

Sales Discount 430 410
Accounts Receivable 20,500
Collection
 14 Purchases 510 16,400
Cash 110 16,400
Bought merchandise

15 Salaries 580 2,500

Cash 110 2,500
Paid salaries

16 Cash 110 12,500

Note Payable 220 12,500
Borrowed money

17 Cash 110 900

Purchase Returns and allowances 520 900
Received refund.

18 Purchases 510 14,500

Accounts Payable 210 14,500
Bought merchandise

Date Account Titles Ref Debit Credit

2018
JUNE 20 Freight in 540 700
Cash 110 700
Paid freight in.

23 Cash 110 18,500

Sales 410 18,500
Sold merchandise.

26 Purchases 510 12,500

Cash 110 12,500
Bought merchandise

27 Accounts Payable 210 9,000

Cash 110 9,000
Paid merchandise

28 Kamille, Drawings 320 3,500

Cash 110 3,500
Withdrawal
29 Sales Returns and allowance 420 900
Cash 110 900
Refund to customers.

30 Accounts Receivable 210 13,700

Sales 410 13,700
Sold merchandise.

30 Advertising 550 1,000

Utilities 590 500
Rent expense 570 3,500
Salaries 580 2,500
Cash 7,500
Paid expenses
 GENERAL LEDGER
Account name: Cash Account No. 110
Date Particulars PR Transactions Balance
2018 Dr Cr Dr Cr
June 1 Initial investment GJ1 ₱50,000 ₱50,000
2 Bought equipment GJ1 ₱10,000 40,000
3 Bought office supplies GJ1 850 39,150
5 Paid freight out GJ1 500 38,650
11 Paid merchandise GJ1 14,798 23,852
13 Collection GJ1 20,090 43,942
14 Bought merchandise GJ1 16,400 27,542
15 Paid salaries GJ1 2,500 25,042
16 Borrowed money GJ1 12,500 37,542
17 Received refund GJ1 900 750 38,442
20 Paid freight in GJ1 37,742
23 Sold merchandise GJ1 18,500 12,500 56,242
26 Bought merchandise GJ2 9,000 43,742
27 Paid merchandise GJ2 3,500 34,741
28 Withdrawal GJ2 900 31,242
29 Refund to customers GJ2 7,500 30,342
30 Paid expense 22,842

Account Name: Accounts Receivable Account No. 120

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 4 Sold merchandise GJ1 ₱20,500 ₱20,500
13 Collection GJ1 ₱20,500 0
30 Sold merchandise GJ2 13,700

Account Name: Merchandise Inventory Account No. 130

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 1 Initial investment GJ1 ₱30,000 ₱30,000
30 Close account 30,000 0
30 ₱15,000

Account Name: Supplies Account No. 140

 Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 3 Bought office supplies GJ1 ₱850 ₱850

Account Name: Equipment Account No. 170

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 2 Bought equipment GJ1 ₱10,000 ₱10,000

Account Name: Account Payable Account No. 210

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 2 Bought equipment GJ1 ₱15,600 ₱15,600
6 Returned merchandise GJ1 ₱500 15,100
11 Paid merchandise GJ1 15,100 0
18 Bought merchandise GJ1 14,500 14,100
27 Paid merchandise GJ2 9,000 5,500

Account Name: Note Payable Account No. 220

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 16 Borrowed money GJ1 ₱12,500 ₱12,500

Account Name: Kamille, Capital Account No. 310

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 1 Initial investment GJ1 ₱80,000 ₱80,000
30 Close account CE1 ₱3,500 76,500
30 Close account CE1 32,108 44,392
Account Name: Sales Account No. 410
Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 4 Sold merchandise GJ1 ₱20,500 ₱20,000
23 Sold merchandise GJ1 18,500 39,100

30 Sold merchandise GJ2 13,700 52,700

30 Close account GJ2 ₱52,700 0

Account Name: Sales Returns and Allowance Account No. 420

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 29 Refund to customer GJ2 ₱900 ₱900
30 Close Account CE1 ₱900 0

Account Name: Sales Discount Account No. 430

June 13 Collection GJ1 ₱410 ₱410
30 Close Account CE1 ₱410 0

Account Name: Purchases Account No. 510

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 2 Bought merchandise GJ1 ₱15,600 ₱15,600 ₱15,600
14 Bought merchandise GJ1 16,400 32,000
18 Bought merchandise GJ1 14,500 15,100 46,500
23 Bought merchandise GJ2 12,500 14,500 59,000
30 Close account CE1 ₱59,000 0
Account Name: Purchase Returns and Allowance Account No. 520
Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 16 Returned merchandise GJ1 ₱500 ₱500
17 Received refund GJ1 900 1,400
30 Close account CE1 ₱1,400 0

Account Name: Purchase Discounts Account No.530

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 1 Paid merchandise GJ1 ₱302 ₱302
30 Close account CE1 ₱302 0
Account Name :Freight in Account No. 540
Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 20 Paid freight in GJ1 ₱700 ₱700
30 Close account CE1 ₱700 0

Account Name: Advertising Account No. 550

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 30 Paid expense GJ1 ₱1,000 ₱1,000
30 Close account CE1 ₱1,000 0

Account Name: Freight out Account No. 560

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 5 Paid freight out GJ1 ₱500 ₱500
30 Close account ₱500 0

Account Name: Rent Expense Account No. 570

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 30 Paid expense GJ2 ₱3,500 ₱3,500
30 Close account CE1 ₱3,500 0

Account Name: Salaries Account No. 580

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 15 Paid Salaries GJ1 ₱2,500 ₱2,500
30 Paid Expense GJ2 2,500 5,000
30 Close account CE1 ₱5,000 0

Account Name: Utilities Account No.590

Date Transactions Balance
 2017 Particulars PR Dr Cr Dr Cr
June 30 Paid Expense GJ2 ₱500 ₱500
30 Close account CE1 ₱500 0

Account Name: Freight in Account No. 540

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 20 Paid freight in GJ1 ₱700 ₱700
30 Close account CE1 ₱700 0

Account Name: Advertising Account No. 550

Date Particulars PR Transactions Balance
2017 Dr Cr Dr Cr
June 30 Paid expense GJ1 ₱1,000 ₱1,000
30 Close account CE1 ₱1,000 0

TAJ Merchandising Business

 Trial Balance
June 30, 2017
No. Account Titles Debit Credit
110 Cash ₱22,842
120 Account Receivable 13,700
130 Merchandise Inventory 30,000
140 Supplies 850
170 Equipment 10,000
210 Accounts Payable ₱5,500
220 Notes Payable 12,500
310 Kamille, Capital 80,000
320 Kamille, Drawings 3,500
410 Sales 52,700
420 Sales Ret. And allowances 900
430 Sales Discounts 410
510 Purchases 59,000
520 Purchase Returns and Allowance 1400
530 Purchase Discounts 302
540 Freight in 700
550 Advertising 1,000
560 Freight out 500
570 Rent Expense 3,500
580 Salaries 5,000
590 Utilities 500
Totals ₱152,402 P152,402

TAJ Merchandising Business

 Worksheet
June 30, 2017

Statement of financial Statement of

Trial Balance Operation Financial Position
Account titles Dr. Cr. Dr. Cr Dr Cr
Cash ₱22,842 ₱22,842
Account Receivable 13,700 13,700
Merchandise Inventory 30,000 30,000 15,000 15,000
Supplies 850 850
Equipment 10,000 10,000
Accounts Payable ₱5,500 ₱5,500
Notes Payable 12,500 12,500
Kamille, Capital 80,000 80,000
Kamille, Drawings 3,500 3,500
Sales 52,700 52,700
Sales Ret. & Allow. 900 900
Sales Discounts 410 410
Purchases 59,000 59000
Purchase Returns and 1400 1400
Allowance
Purchase Discounts 302 302
Freight in 700 700
Advertising 1,000 1,000
Freight out 500 500
Rent Expense 3,500 3,500
Salaries 5,000 5,000
Utilities 500 500
Totals ₱152,40 P152,402 101,510 69,402 65892 98,000
2
Net Loss 32,108 32,108
101,510 101,510 98,000 98,000
 TAJ Merchandising Business
Statement of Cost of Goods Sold
June 30, 2017
Merchandise Inventory, Beginning ₱30,000
Purchases ₱59,000
Freight in 700
Purchase Returns and Allowance (₱1,400)
Purchase Discounts (302) (1702) 57,998
Total Goods Available for Sale ₱87,998
Less Merchandise Inventory, End 15,000
COST OF GOODS SOLD ₱72,998

TAJ Merchandising Business

Statement of Financial Operation
June 30, 2017
Sales ₱52,700
Sales Returns and Allowances (900)
Sales Discount (410)
Net Sales ₱51,390
Cost of Goods Sold (72,998)
Gross Profit (Loss) (₱21,608)
Operating Expenses
Advertising (₱1,000)
Freight Out (500)
Rent Expense (3,500)
Salaries (5,000)
Utilities (500) (10,500)
Net Profit (Loss) (₱32,108)

TAJ Merchandising Business

 Statement of Changes in Equity
June 30, 2017
Kamille, Capital, Beginning ₱80,000
Drawings (3,500)
Balance ₱76,500
Net Loss (32,108)
Kamille, Capital June 30 ₱44,392

TAJ Merchandising Business

Statement of Financial Position
June 30, 2017
ASSETS
Current Assets:
Cash & Cash Equivalent 22,842
Receivables 13,700
Inventories 15,000
Prepaid Expenses 850 52,392
Property Plant and Equipment
Property, Plant & Equipment 10,000
Total Assets P62,392
LIABILITIES AND OWNER’S EQUITY
Current Liabilities:
Accounts Payable ₱5,500
Non- Current Liabilities:
Notes Payable 12,500
Total Liabilities ₱18,000
Kamille, Capital 44,392
Total Liabilities and Owner’s Equity ₱62,392

Assets = Liabilities plus capital

62,392 = 18,000 + 44,392

TAJ Merchandising Business

 Statement of Cash Flows
June 30, 2017
Cash Flow from Operating Activities
Cash Receipts
Cash Sales ₱18,500
Cash refund 900
Collections 20,090 ₱39,490
Cash Payments For
Refund to customers (₱900)
Purchases (52,698)
Freight in (700)
Freight out (500)
Operating Expense (10,000) (₱64,798)
Supplies (850) (65,648)
Cash Flow from Investing Activities
Equipment (10,000)
Cash Flow from Financing Activities
Kamille, Capital ₱50,000
Loan borrowed 12,500
Kamille, Drawings (3,500) 59,000
Cash Balance ₱22,842

TAJ Merchandising Business

Closing Entries
June 30, 2017
Dat Description Ref Debit Credit
e
June
30 Sales 410 52,700
Sales Return and allowance 430 900
Sales Discount 430 410
Income Summary 600 51,390
Close account

30 Income Summary 600 83,498

Cost of Goods sold 510 72,998
Advertising 550 1,000
Freight Out 560 500
Rent Expense 570 3,500
Salaries 580 5,000
Utilities 590 500
 Close account

30 Kamille, Capital 310 3,500

Kamille, Drawings 320 3,500
Close Account

30 Kamille, Capital 600 32,108

Income Summary 310 32,108
Close account

30 Income Summary 600 30,000

Merchandise Inventory, Beginning 130 30,000
Close account

TAJ Merchandising Business

Post Closing Trial Balance
June 30, 2017
No. Account Titles Debit Credit
11 Cash ₱22,842
0
12 Accounts Receivable 13,700
0
13 Merchandise Inventory 15,000
0
14 Supplies 850
0
17 Equipment 10,000
0
21 Accounts Payable ₱5,500
0
22 Notes Payable 12,500
0
31 Kamille, Capital 44,392
0
₱62,392 ₱62,392