1. Journalize the transactions
Date
1
2
5
6
Account titles
Debit
Cash
office equipment
Santos, capital
Robles, capital
Zaragoza, capital
950,000
75,000
Prepaid rent
cash
85,000
Purchases
cash
85,000
Cash
2,000
350,000
400,000
275,000
85,000
85,000
sales
7
8
10
12
15
16
17
18
19
Credit
2,000
accounts receivable
sales
1,500
Purchases
accounts payable
50,000
Cash
sales
800
office supplies
cash
4,000
salaries expenses
cash
35,000
Cash
sales discount
accounts receivable
1,470
30
Robles, Drawings
cash
5,000
accounts receivable
sales
25,000
sales return and allowances
500
1,500
50,000
800
4,000
35,000
1,500
5,000
25,000
accounts receivable
20
Cash
500
800
sales
21
22
23
24
25
26
27
29
30
30
800
santos, drawing
cash
25,000
Prepaid advertisement
cash
12,000
Cash
sales
22,000
Cash
accounts receivable
2,000
Purchases
cash
20,000
Cash
Zaragoza, capital
50,000
utilities expense
cash
4,500
office equipment
accounts payable
55,000
salaries expenses
cash
35,000
Zaragoza, drawings
cash
10,000
25,000
12,000
22,000
2,000
20,000
50,000
4,500
55,000
35,000
10,000
2. Post to Ledger
Cash
Date
Explanation
DEBIT
December 1
2
5
6
10
12
15
16
17
20
21
22
23
24
25
26
27
30
30
Initial Investment
Advance Payment
Purchase Of Merchandise
Sale Of Merchandise
Sale Of Merchandise
Purchase Of Office Supplies
Payment Of Salaries
Collection Of Accounts
Robles Cash Withdrawal
Sale Of Merchandise
Santos Cash Withdrawal
Payment Of Advertisement
Sale Of Merchandise
Collection Of Accounts
Purchase Of Merchandise
Additional Cash Investment
Payment Of Utilities
Payment Of Salaries
Zaragoza’s Cash Withdrawal
950,000
CREDIT
4,500
35,000
10,000
950,000
865,000
780,000
782,000
782,800
778,800
743,800
745,270
740,270
741,070
716,070
704,070
726,070
728,070
708,070
758,070
753,570
718,570
708,570
CREDIT
BALANCE
85,000
85,000
2,000
800
4,000
35,000
1,470
5,000
800
25,000
12,000
22,000
2,000
20,000
50,000
Office Equipment Explanation
Date
DEBIT
December 1
29
Initial Investment
Credit Purchase
75,000
55,000
Santos, Capital
Explanation
DEBIT
BALANCE
75,000
130,000
CREDIT
BALANCE
350,000
350,000
CREDIT
BALANCE
400,000
400,000
Date
December 1
Initial Investment
Robles, Capital
Date
Explanation
December 1
Initial Investment
DEBIT
Zaragoza, Capital Explanation
Date
DEBIT
December 1
26
Initial Investment
Additional Cash Investment
Robles, Drawing
Date
Explanation
DEBIT
December 17
Withdrawal For Personal Use
5,000
Santos, Drawing
Date
Explanation
DEBIT
December 21
Withdrawal For Personal Use
25,000
Zaragoza,
Drawings
Date
Explanation
DEBIT
December 30
Withdrawal For Personal Use
10,000
Office Supplies
Date
Explanation
DEBIT
December 12
Cash Purchase
4,000
Prepaid Rent
Date
Explanation
DEBIT
December 2
Advance Payment
85,000
Sales
Date
Explanation
DEBIT
December 6
7
10
18
20
23
Cash Sales
Credit Sales
Cash Sales
Credit Sales
Cash Sales
Cash Sales
Purchases
Date
Explanation
DEBIT
December 5
8
25
Cash Purchase
Credit Purchase
Cash Purchase
85,000
50,000
20,000
CREDIT
BALANCE
275,000
50,000
275,000
325,000
CREDIT
BALAANCE
5,000
CREDIT
BALANCE
25,000
CREDIT
BALANCE
10,000
CREDIT
BALANCE
4,000
CREDIT
BALANCE
85,000
CREDIT
BALANCE
2,000
1,500
800
25,000
800
22,000
2,000
3,500
4,300
29,300
30,100
52,100
CREDIT
BALANCE
85,000
135,000
155,000
Prepaid
Advertisement
Date
Explanation
DEBIT
December 22
Advance Payment.
12,000
Accounts
Receivables
Date
Explanation
DEBIT
December 7
16
18
19
24
Sales
Collection Of Accounts
Sales
Defective Merchandise Ret.
Partial Payment
1,500
Salaries
Expenses
Date
Explanation
DEBIT
December 15
30
Cash Payments Of Salaries
Cash Payments Of Salaries
35,000
35,000
Sales Discount
Date
Explanation
DEBIT
December 16
Collection Of Acc. Receivable
30
Accounts
Payables
Date
Explanation
DEBIT
December 8
29
Credit Purch. Of Merchandise
Credit Purchase Of Office Equ.
Sales Return
Date
Explanation
DEBIT
DECEMBER 19
DEFECTIVE MERCHANDISE
500
UTILITIES
EXPENSE
DATE
EXPLANATION
DEBIT
CREDIT
BALANCE
12,000
CREDIT
1,500
25,000
500
2,000
BALANCE
1,500
25,000
24,500
22,500
CREDIT
35,000
70,000
CREDIT
30
CREDIT
BALANCE
50,000
55,000
50,000
105,000
CREDIT
BALANCE
500
CREDIT
BALANCE
DECEMBER 27
CASH PAYMENT
4,500
4,500
3. Prepare Trial Balance
ACCOUNT TITLES
Saroza Trading
Unadjusted Trial Balance
For the month ended December 31, 2021
DEBIT
Cash
Accounts Receivable
Office Supplies
Prepaid Rent
Prepaid Advertisement
Office Equipment
Accounts Payable
Sales
Sales Discounts
Sales Return And Allowances
Purchases
Salaries Expenses
Utilities Expenses
Robles, Drawings
Santos, Drawings
Zaragoza, Drawings
Robles, Capital
Santos, Capital
Zaragoza, Capital
TOTAL
CREDIT
708,570
22,500
4,000
85,000
12,000
130,000
105,000
52,100
30
500
155,000
70,000
4,500
5,000
25,000
10,000
1,232,100
400,000
350,000
325,000
1,232,100
4. Adjusting Entries
1
2
3
4
ACCOUNT TITLES
DEBIT
Rent Expense
Prepaid Rent
17,000
Salaries Expenses
Accrued Salaries
15,000
Depreciation Expense-Office equipment
Accumulated Depreciation- Office Equipment
13,000
Advertising Expense
Prepaid Advertising
4,000
CREDIT
17,000
15,000
13,000
4,000
Saroza Trading
Income Statement
For the year ended December 31, 2021
Revenues
Sales
Sales Discounts
Sales Return And Allowances
Total
Expenses
Purchases
Salaries Expenses
Rent expenses
Advertising Expenses
Depreciation Expenses- Office Equipment
Utilities Expenses
Total
PROFIT
P52,100
(30)
(500)
P51,570
155,000
85,000
17,000
4,000
13,000
4,500
(P278,500)
(P226,930)
Saroza Trading
Statement of changes in Equity
For the year ended December 31, 2021
Santos
Robles
Zaragoza
Beginning Capital
350,000 400,000
Add: Additional Investment
Total
Less: loss
(113,465) (45,386)
Less: Withdrawals
(25,000) (5,000)
Partner’s Equity December P211,535 P349,614
31
TOTAL
275,000 P1,025,000
50,000
50,000
P1,075,000
(68,079) (226,930)
(10,000) (40,000)
P246,921 P808,070
Saroza Trading
Balance Sheet
As of December 31, 2021
Assets
Cash
Accounts Receivable
Office Supplies
Prepaid Rent
Prepaid Advertisement
Office Equipment
Accumulated Depreciation- Office
Equip.
Total Assets
P708,570
22,500
4,000
68,000
8,000
130,000
(13,000)
117,000
P928,070
Liabilities and Partner’s Capital
Accounts Payable
Accrued Salaries
Robles, Capital
Santos, Capital
Zaragoza, Capital
Total Liability And Equity
105,000
15,000
211,535
349,614
246,921
P928,070
Saroza Trading
Statement of cash flow
For the year ended December 31, 2021
Cash Flow from Operating Activties
Cash received from customers
Cash paid for expenses
Cash paid to suppliers
Cash paid for advance payments
Cash received from sales
Total
3,470
(74,500)
(109,000)
(97,000)
25,600
P251,430
Cash Flow from investing activities
------Cash Flow from Financing Activities
Cash received from investment
Cash received from Additional Investment
Zaragoza’s cash Withdrawal
Santos cash Withdrawal
Robles cash Withdrawal
Total
Cash Balance at the End of the period
950,000
50,000
(P10,000)
(25,000)
(5,000)
P960,000
P708, 570
7. Division of Profit, Allowance for salary, bonus and interest
Santos
Salary Allowances
Robles
Zaragoza
Total
P5,000
P5,000
Interest
Santos (349,614 x 0.06)
Robles(211,535 x 0.06)
Zaragoza (246,921 x 0.06)
20,976.84
48,484.2
12,692.1
14,815.26
12,000
Bonus
12,000
Balance to be Divided in a Ration of 5:2:3 (146,207.1)
(58,482.84) (87,724.26) (292,414.2)
Share of partner’s in profit/ (loss)
(120,230.26) (33,790.74)
(72,909)
(P226,930)