PROBLEM 1 : SOLUTION TO PHILASIA DISTRIBUTORS
CASE PROBLEM 1 : 84% PHILASIA DISTRIBUTORS WAS REGISTERED WITH THE DEPARTMENT
OF TRADE AND INDUSTRY AS A SINGLE PROPRIETORSHIP BY J. LOPEZ, THE OWNER. THE
COMPANY USES THE PERPETUAL INVENTORY SYSTEM. YOU ARE ASKED TO COMPLETE
THE ACCOUNTING CYCLE.
The Business, PHILASIA DISTRIBUTORS, was registered as a single proprietorship
with the Department of Trade and Industry.
April 1
2
2
3
4
5
6
11
13
14
15
16
17
18
20
23
26
27
28
29
30
30
Juan Lopez Invested P 39,000.00
Bought computer equipment for P 10,000.00 cash
Bought merchandise on account from LOWTOWN Supply Co. P 15,900.00, terms
2/10, n/30
Bought office supplies on cash basis for P 700.00
Sold merchandise on account P 15,200.00, FOB Destination, terms 2/10,n/30.
The cost of the merchandise sold was P 12,200.00.
Paid P 200.00 freight on April 4 sale
Received credit from LOWTOWN Supply Co for merchandise returned P 300.00
Paid LOWTOWN
Collected from April 4 customers.
Bought merchandise on cash basis for P 14, 400.00
Salaries paid P 1,500.00
Borrowed money from RCBC BANK, signed a promissory note for P 12,000.00
Received refund from a supplier on cash purchase of April 14, P 500.00
Bought merchandise from MESDA, P 14, 200.00, FOB Shipping point, terms 2/10,
n / 30
Paid freight on April 18 purchase, P 700.00
Sold Merchandise for P 16,400.00. The merchandise sold had a cost of P
10,500.00
Bought merchandise for cash P 12,300.00
Paid MESDA on the April 18 purchase, P 9,000.00. No discount allowed on partial
payment.
J Lopez got cash from the business, P 2,008.00
Made refund to cash customer for defective merchandise, P 900.00
Sold merchandise on account, P 13,700, n/30. Cost of the merchandise sold is P
11,000.00
Paid the following : ADVERTISING P 1,000.00
UTILITIES
400.00
RENT
3,500.00
SALARIES
1,500.00
PHILASIA DISTRIBUTORS
CHART OF ACCOUNTS
100
USE FOR JOURNALIZATION AND POSTING TO THE LEDGER
ASSETS
400
INCOME
101
105
115
120
150
200
201
202
300
301
302
CASH
ACCOUNTS RECEIVABLE
MERCHANDISE INVENTORY
SUPPLIES
EQUIPMENT
LIABILITIES
ACCOUNTS PAYABLE
NOTES PAYABLE
EQUITY
LOPEZ CAPITAL
LOPEZ DRAWINGS
401
405
410
500
501
503
506
510
530
540
601
SALES
SALES RETURNS & ALLOWANCES
SALES DISCOUNTS
EXPENSES
COST OF GOODS SOLD
ADVERTISING EXPENSE
FREIGHT OUT
RENT EXPENSE
SALARIES
UTILITIES
INCOME SUMMARY
PHILASIA DISTRIBUTORS
CHART OF ACCOUNTS
100
USE FOR FINANCIAL STATEMENTS PREPARATION
ASSETS
400
INCOME
101
105
115
120
CASH & CASH EQUIVALENTS
RECEIVABLE
INVENTORIES
PREPAID EXPENSES
150
PROPERTY PLANT & EQUIPMENT
200
LIABILITIES
201
202
ACCOUNTS PAYABLE
NOTES PAYABLE
300
EQUITY
301
302
LOPEZ CAPITAL
LOPEZ DRAWINGS
401
405
410
NET SALES
500
EXPENSES
501
503
COST OF GOODS SOLD
ADVERTISING EXPENSE
506
510
530
FREIGHT OUT
RENT EXPENSE
SALARIES
540
UTILITIES
GENERAL JOURNAL ( 9 CHECKMARKS ON THIS PAGE)
PAGE NUMBER 1
DATE
APRIL
DESCRIPTION
Cash
Lopez Capital
Equipment
Cash
Bought equipment
150
101
10, 000.00
Merchandise inventory
Accounts Payable
Lowtown supply company,2/10,n/30
115
201
15, 900.00
Supplies
Cash
Bought supplies
120
101
700.00
Account Receivable
Sales
Team power, 2/10/n/30 FOB
DEST
105
401
15, 200
Cost of goods sold
Merchandise inventory
Cost of goods sold to Team
power
501
115
12,200.00
Freight out
Cash
Freight on April 4 Sale
506
101
200.00
Accounts Payable
Merchandise Inventory
Received credit from Lowtown
supply company for merchandised
returned
201
115
300.00
11 Accounts Payable
Merchandise Inventory
Cash
Payment of Lowtown April 2 trans
201
115
101
15,600.00
2
3
4
5
6
APRIL
REF
101
301
CURRENT JOURNAL
MARK
ENTRIES
DEBIT
CREDIT
39,000.00
39, 000.00
10, 000.00
15, 900.00
700.00
15,200.00
12,200.00
200.00
300.00
312.00
15, 288.00
109, 100.00
109,100.00
GENERAL JOURNAL ( 9 CHECKMARKS ON THIS PAGE)
PAGE NUMBER 2
DATE
APRIL
DESCRIPTION
13 CASH
SALES DISCOUNTS
ACCOUNTS RECEIVABLES
COLLECTION IN FULL FROM
TEAM POWER
14 Merchandise Inventory
Cash
Bought merchandise on cash
basis
REF
101
410
105
CURRENT JOURNAL
MARK
ENTRIES
DEBIT
CREDIT
14, 896.00
304.00
15, 200.00
115
101
14, 400.00
15 Salaries
Cash
Salaries paid
530
101
1,500.00
16 Cash
Notes Payable
Promissory note sign with RCBC
101
202
12, 000.00
17 Cash
Merchandise Inventory
Refund from supplier on April 14
101
115
500.00
18 Merchandise Inventory
Accounts Payable
MESDA Distributors Company
2/10, n/30; FOB shipping point 2/10,
n/30
115
201
14, 200.00
20 Merchandise Inventory
Cash
Freight on April 18, purchase
115
101
700.00
23 Cash
Sales
Cash sales
101
401
16, 400.00
501
115
10, 500.00
Cost of Goods Sold
Merchandise
Cost of Goods Sold
TOTAL
14, 400.00
1.500.00
12, 000.00
500.00
14, 200.00
700.00
16, 400.00
10 ,500.00
85, 400.00
85, 400.00
GENERAL JOURNAL ( 9 CHECKMARKS ON THIS PAGE)
PAGE NUMBER 3
DATE
DESCRIPTION
April 26 Merchandise inventory
Cash
Bought merchandise on cash basis
REF
115
101
CURRENT JOURNAL ENTRIES
DEBIT
CREDIT
12, 300.00
12, 300.00
27 Accounts Payable
Cash
Paid Mesda Distributors
28 Lopez Drawings
Cash
Withdrawal for personal use
201
101
9, 000.00
302
101
2, 008
29 Sales Returns & allowances
Cash
Refund to customers for defective
goods
30 Accounts Receivable
Sales
Sales on account on terms of n/30
Cost of Good Sold
Merchandise inventory
405
101
900.00
105
401
13,700.00
501
115
11,000.00
30 Advertising
Utilities
Rent
Salaries
Cash
MONTH END EXPENSES
1000
540
510
530
101
1,000.00
400.00
1, 500.00
1, 500.00
9, 000.00
2,008
900.00
13, 700.00
11,000.00
6, 400.00
55,308.00
55 , 308.00
MARK
PAGE NUMBER GL =1
ACCOUNT
101
CASH
BALANCE
DATE
APRIL
ITEM
POST
DEBIT
CREDIT
1
GJ-1
39,000.00
2
GJ-1
10,000.00
29,000.00
3
GJ-1
700.00
28.300.00
5
GJ-1
200.00
28,100.00
11
GJ-1
15,288.00
12,812.00
13
GJ-2
14
GJ-2
14,400.00
13,308.00
15
GJ-2
1,500.00
11,808.00
16
GJ-2
12,000.00
23,808.00
17
GJ-2
500.00
24,308.00
20
GJ-2
23
GJ-2
26
GJ-3
12,300.00
27,708.00
27
GJ-2
9,000.00
18,708.00
28
GJ-3
2,008.00
16,700.00
29
GJ-2
900.00
15,800.00
30
GJ-3
6,400.00
9,400.00
DEBIT
39,000.00
14,896.00
27,708.00
700.00
16,400.00
23,608.00
40,008.00
CREDIT
ACCOUNT
105
ACCOUNTS RECEIVABLE
BALANCE
DATE
APRIL
ITEM
POST
DEBIT
4
GJ-1
15,200.00
13
GJ-2
30
GJ-3
CREDIT
DEBIT
CREDIT
15,200.00
15,200.00
13,700.00
0
13,700.00
PAGE NUMBER GL =1
ACCOUNT
115
MERCHANDISE INVENTORY
BALANCE
DATE
APRIL
ITEM
POST
DEBIT
CREDIT
15,900.00
DEBIT
2
GJ-1
4
GJ-1
12,200.00
3,700.00
6
GJ-1
300.00
3,400.00
11
GJ-1
312.00
3,088.00
14
GJ-2
17
GJ-2
18
GJ-2
14,200.00
31,188.00
20
GJ-2
700.00
32,888.00
23
GJ-2
26
GJ-3
30
GJ-3
CREDIT
15,900.00
14,400.00
17,488.00
500.00
10,500.00
12,300.00
16,988.00
22,088.00
33,688.00
11,000.00
22,688.00
PAGE NUMBER GL-2
ACCOUNT
115
SUPPLIES
BALANCE
DATE
APRIL
ITEM
3
POST
DEBIT
GJ-1
700.00
CREDIT
DEBIT
700.00
CREDIT
PAGE NUMBER GL-2
ACCOUNT
115
EQUIPMENT
BALANCE
DATE
ITEM
APRIL
2
POST
GJ-1
DEBIT
CREDIT
10,000.00
DEBIT
CREDIT
10,000.00
PAGE NUMBER GL-2
ACCOUNT
115
ACCOUNTS PAYABLE
BALANCE
DATE
ITEM
APRIL
POST
DEBIT
CREDIT
DEBIT
15,900
CREDIT
2
GJ-1
15, 900.00
6
GJ-1
300.00
15,600.00
11
GJ-1
15,600.00
0
18
GJ-2
14,200.00
27
GJ-3
5,700.00
PAGE NUMBER GL-2
ACCOUNT
202
NOTES PAYABLE
BALANCE
DATE
APRIL
ITEM
16
POST
GJ-2
DEBIT
12,000.00
CREDIT
DEBIT
CREDIT
12,000.00
PAGE NUMBER GL-2
ACCOUNT
301
LOPEZ CAPITAL
BALANCE
DATE
APRIL
ITEM
1
30
CLOSING
30
CLOSING
POST
DEBIT
CREDIT
DEBIT
CREDIT
GJ-4
39,000.00
39,000.00
GJ-4
2,296
41, 296.00
2,003.00
PAGE NUMBER GL-2
ACCOUNT
301
LOPEZ DRAWING
BALANCE
DATE
APRIL
ITEM
28
POST
DEBIT
GJ-3
2,008.00
CREDIT
DEBIT
CREDIT
2,008.00
PAGE NUMBER GL-2
ACCOUNT
401
SALES
BALANCE
DATE
APRIL
ITEM
POST
DEBIT
CREDIT
DEBIT
CREDIT
04
GJ-1
15,200.00
15,200.00
23
GJ-2
16,400.00
31,600.00
30
GJ-3
13,700.00
45,300.00
30
CLOSING
GJ-4
45,300.00
PAGE NUMBER GL-2
ACCOUNT
405
SALES RETURNS AND ALLOWANCES
BALANCE
DATE
APRIL
ITEM
30
CLOSING
POST
DEBIT
GJ-3
900.00
CREDIT
DEBIT
900.00
900.00
CREDIT
PAGE NUMBER GL-2
ACCOUNT
410
SALES DISCOUNTS
BALANCE
DATE
APRIL
ITEM
13
30
CLOSING
POST
DEBIT
GJ-2
304.00
GJ-4
CREDIT
DEBIT
CREDIT
304.00
304.00
PAGE NUMBER GL-2
ACCOUNT
501
COST OF GOOD SOLD
BALANCE
DATE
APRIL
ITEM
POST
DEBIT
CREDIT
DEBIT
CREDIT
4
GJ-1
12,200.00
12,200.00
23
GJ-2
10,500.00
22,700.00
30
GJ-3
11,000.00
33,700.00
30
GJ-4
33,700.00
PAGE NUMBER GL-2
ACCOUNT
503
ADVERTISING EXPENSE
BALANCE
DATE
APRIL
ITEM
30
30
CLOSING
POST
DEBIT
GJ-3
1,000.00
GJ-4
CREDIT
DEBIT
CREDIT
1,000.00
1,000.00
PAGE NUMBER GL-4
ACCOUNT
506
FREIGHT OUT
BALANCE
DATE
APRIL
ITEM
05
30
CLOSING
PAGE NUMBER GL-4
POST
DEBIT
GJ-1
200.00
CREDIT
DEBIT
200.00
200.00
CREDIT
ACCOUNT
510
RENT EXPENSE
BALANCE
DATE
APRIL
ITEM
30
30
CLOSING
POST
DEBIT
GJ-3
3,500.00
GJ-4
CREDIT
DEBIT
CREDIT
3,500.00
3,500.00
PAGE NUMBER GL-4
ACCOUNT
530
SALARIES
BALANCE
DATE
APRIL
ITEM
POST
DEBIT
15
GJ-2
1,500.00
1,500.00
30
GJ-3
1,500.000
3,000.00
30
CLOSING
GJ-4
CREDIT
DEBIT
CREDIT
3,000.00
PAGE NUMBER GL-4
ACCOUNT
540
UTILITIES
BALANCE
DATE
APRIL
ITEM
30
30
CLOSING
POST
DEBIT
GJ-3
400.00
GJ-4
CREDIT
DEBIT
CREDIT
400.00
400.00
PAGE NUMBER GL-4
ACCOUNT
600
INCOME SUMMARY
BALANCE
DATE
APRIL
ITEM
POST
DEBIT
30
CLOSING
GJ-4
30
CLOSING
GJ-4
41,800.00
30
CLOSING
GJ-4
2,296.00
CREDIT
44,096.00
DEBIT
CREDIT
44,096.00
2,296.00
PHILASIA DISTRIBUTORSHIP
TRIAL BALANCE
APRIL 30, 2016
ACCOUNT TITLES
101
DEBIT
CREDIT
9,400.00
105
CASH
ACCOUNTS RECEIVABLE
13,700.00
115
MERCHANDISE INVENTORY
22,688.00
120
SUPPLIES
700.00
150
EQUIPMENT
10,000.00
201
ACCOUNTS PAYABLE
5,200.00
202
NOTES PAYABLE
12,000.00
301
LOPEZ CAPITAL
39,000.00
302
LOPEZ DRAWINGS
401
SALES
405
2,008.00
45,300.00
900.00
410
SALES RET
SALES DISCOUNT
304.00
501
COST OF GOOD SOLD
33.700.00
506
FREIGHT OUT
200.00
503
ADVERTISING
1,000.00
510
RENT
3.500.00
530
SALARIES
3,000.00
540
UTILITIES
400.00
TOTALS
101,500.00 101,500.00
PHILASIA DISTRIBUTORSHIP
STATEMENT OF PERFORMANCE
FOR THE PERIOD ENDED APRIL 30, 2016 (IN PESOS)
NET SALES
44,096.00
LESS: COST OF SALES
33,700.00
GROSS PROFIT
10,396.00
LESS : OPERATING EXPENSES
FREIGHT OUT
200.00
ADVERTISING
1,000.00
RENT
3,500.00
SALARIES
3,000.00
UTILITIES
400.00
TOTAL EXPENSES
NET PROFIT
8,100.00
2,296.00
PHILASIA DISTRIBUTORSHIP
STATEMENT OF EQUITY
FOR THE PERIOD ENDED APRIL 30, 2016 (IN PESOS)
J. LOPEZ CAPITAL
INITIAL INVESTMENT
P 39,000.00
DRAWINGS
- 2,008.00
NET PROFIT
2,296.00
J. LOPEZ CAPITAL APRIL 30,2016
39,288.00
PHILASIA DISTRIBUTORSHIP
STATEMENT OF FINANCIAL POSITION
FOR THE PERIOD ENDED APRIL 30, 2016 (IN PESOS)
ASSETS
DEBIT
CURRENT ASSETS
CASH AND CASH EQUIVALENTS
9,400.00
RECEIVABLES
13,700.00
INVENTORIES
22,688.00
PREPAID EXPENSES
700.00
TOTAL CURRENT ASSETS
46,488.00
NONCURRENT ASSETS
PROPERTY PLANT & EQUIPMENT
TOTAL ASSETS
10,000.00
56,488.00
LIABILITIES & EQUITY
CURRENT LIABILITIES
5,200.00
ACCOUNTS PAYABLE
NON CURRENT LIABILITIES
NOTES PAYABLE
TOTAL LIABILITIES
12,000.00
17,200.00
OWNERS EQUITY
J. LOPEZ CAPITAL
39,288.00
TOTAL LIABILITIES AND EQUITY
56,488.00
CREDIT
PHILASIA DISTRIBUTORS
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED APRIL 30, 2016
CASHFLOW FROM OPERATING
ACTIVITIES
CASH RECEIVED FROM :
SALES
16,400.00
RECEIVABLE COLLECTION
14,896.00
REFUND FROM
PURCHASES
500.00
FREIGHT ON
PURCHASES
-700.00
DRAWINGS
-2008
PAYMENT FOR
OFFICE SUPPLIES
700.00
FREIGHT ON SOLD GOODS
-200.00
GOODS BOUGHT
50,988.00
OPEX
7,900.00
REFUND TO CUSTOMER
900.00
NET CASH FLOW FROM OPERATING
ACTIVITIES
CASH FLOW FROM INVESTING
ACTIVITIES
COMPUTER EQUIPMENT BOUGHT
-29,592.00
10,000.00
CASH FLOW FROM FINANCING
ACTIVITIES
INITIAL INVESTMENT
39,000.00
BORROWING
12,000.00
NET CASH FLOW FROM FINANCING
ACTIVITIES
48,992.00
INCREASE IN CASH AND CASH
EQUIVALENTS
9,400.00
ADD : CASH AND CASH EQUIVALENTS
0
CASH AND CASH EQUIVALENTS, APRIL
30, 2016
9,400.00
DATE
DESCRIPTION
REF
CLOSING JOURNAL ENTRIES
DEBIT
APRIL 30
SALES
INCOME SUMMARY
SALES RETURNS AND ALLOWANCES
SALES DISCOUNTS
401
601
45,300.00
INCOME SUMMARY
COST OF GOOD SOLD
ADVERTISING
FREIGHT OUT
RENT
SALARIES
UTILITIES
601
501
503
506
510
530
540
41,800.00
INCOME SUMMARY
J. LOPEZ CAPITAL
601
301
2,296.00
J. LOPEZ CAPITAL
LOPEZ DRAWING
301
302
2,008.00
CREDIT
44,096.00
900.00
304.00
33,700.00
1,000.00
200.00
3,500.00
3,000.00
400.00
2,296.00
2,008.00
PHILASIA
POST CLOSING TRIAL BALANCE
APRIL 30
10
10
11
12
15
20
20
30
CASH
ACCOUNTS
MERCHANDISE
SUPPLIES
EQUIPMENT
ACCOUNTS
NOTES
LOPEZ
9,400.00
13,700.00
22,688.00
700.0
10,000.00
56,488.00
5,200.00
12,000.00
39,288.00
56,488.00
CASE PROBLEM 2 SET 1
2.1
FAX company borrowed P100,000.00 on December 1 by signing a six month note that specifies
interest at an annual percentage rate( APR ) of 12%. No interest on principal payment is due
until the note matures on May 31, fFAX company prepares financial statements at the end of
each calendar month, provide an answer for the month end of January only.
2.2
In December 1, BOX paid its insurance agent P 2,400.00 for the annual insurance premium
Covering the twelve month period beginning on December 1. The P 2,400.00 payment was
Recorded on December 1 with a debit to the current asset prepaid insurance and a credit
To the current asset Cash. BOX company prepares monthly financial statements at the end
Of each calendar month. Provide an answer for the month end of March Only.
2.3
On December 1, SOX began operations, On December 4, it purchases P1,500.00 of supplies
And recorded the transaction with a debit to the income statement account supplies expense
And a credit to the liability Accounts Payable. SOX prepares monthly financial statements at
The end of each calendar month. At the end of the day on December 31, SOX Company
estimated that P700.00 of the supplies were still on hand in the supply room.
Requirements : Answer the questions pertaining to the adjusting entries for each the three cases.
Use the answer sheet provided for CASE2 set 1
What is the
adjusting entry
Case 2.1
Case 2.2
Case 2.3
Date of the Adjusting
entry
Debit account title
January 31
March 31
December 31
Interest Expense
Insurance Expense
Supplies
Credit account title
Interest Payable
Prepaid Insurance
Supplies Expense
Debit & credit Amount
P 1,000.00
P 200.00
P 700.00