The following are the transactions of J. Lyon’s Trading for December 2017. Prepare the accounting cycle
using periodic inventory system.
Dec.
1
1
2
3
4
4
Invested P 200,000 cash for the business.
Paid mayor’s permit and other licenses P 2,500.
Purchased merchandise worth P 70,000 on account. Term 2/15, n/30.
Sold merchandise to Mr. Buen on account P 35,000. Terms 2/10, 1/20, n/30.
Returned merchandise worth 2,500 from transaction on Dec. 2.
Paid for the annual insurance premium P67,000.
8
12
13
15
18
20
25
25
28
30
30
Paid the rent of store space P 45,000.
Cash sales worth P 25,000.
Purchased store equipment P75,000.
Paid utilities P 2,650.
Mr. Buen returned P 200 worth of merchandise.
Paid P 10,000 as partial payment for the transaction on Dec. 2.
Withdrew P 8,000 for personal use.
Mr. Buen issued a note for his account.
Issued a note for the account made on Dec. 2.
Paid salary of store helper P 5,000.
Cash sales P 11,000.
101
102
103
104
105
106
Cash
Account Receivable
Note Receivable
Prepaid Insurance
Prepaid Rent
Store Equipment
201
202
203
204
Account Payable
Accrued Salaries
Accumulated Depreciation, Store Equipment
Unearned Sales
301
302
J. Lyon, capital
J. Lyon, drawings
401
402
403
Sales
Sales Discount
Sales Return and Allowances
501
502
503
Purchases
Purchases Discount
Purchases Return and Allowances
601
602
Rent Expense
Utilities Expense
Chart of Accounts
603
604
Permit and Licenses
Salary Expense
605
606
Insurance Expense
Depreciation Expense
ADJUSTING ENTRIES:
1.
2.
3.
4.
5.
Insurance was paid on October 1.
Rental of store space was paid November 30. Monthly rent is P9,000.
An amount of P1,500 was accrued as part of the salaries of employees.
Store equipment is estimated to have useful life of 5 years. It was purchased on October 1.
An amount of P5,000 is still uncollected.