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__ PROFESS~R:_ _ _ _ ~ - - - ---problem #1
Merchandise Inventory At the End of the Period
The beginning and ending merchandi se inventories for Ma ribeth Villon Store for th e
year ended Dec. 31, 2019 are as f ollows:
Merchandi se Inventory, 1/1/2019
M erchandi se Inventory, 12/31/2019
P 300,000
230,000
Required:
Prepare th e adjusting entries to update the merchandise inventory account as at Dec.
31, 2019.
,Problem #2
Adjusting Entry for Merchandise Inventory
Listed below is a partial trial balance of the Charito Guillermo Retailers at Dec. 31, 2019:
Merchandise Inventory
Sales
Sales Returns and Allowances
Purchases
Purchases Discounts
Transportation-In
PS0,000
Pl90,000
20,000
60,000
3,000
1,000
The merchandise inventory on Dec. 31 is P74,000.
Required:
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Prepare the adjusting entry needed for merchandise inventory.
2- Prepare the partial income statement.
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8-22
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Problem #3
Missing Elements - Reconstruction
inser t the m iss ing figures in
To test your know ledge of the relationships of these items ,
of net sa les and profit is
the follow ing incom e state ment . Note that gross profit is 40%
10% of 'let sales.
Net Sales
Gross Sales
Less: Sales Returns & Allowances
Sales Discounts
Net Sales
Cost of Goods Sold
Invent ory, Jan. 1, 2019
Purchases
Less: Purchases Returns & Allowances
Purchases Discounts
Net Purchases
Transp ortatio n-In
Net Cost of Purchases
Cost of Goods Availa ble for Sale
Less: Invent ory, Dec. 31, 2019
p
P45,00 0
15,000
p
P220,0 00
P985,000
P31,000
20,000
p
36,000
p
260,00 0
Cost of Goods Sold
Gross Margin from Sales
Opera ting Expenses
P620,000
p
Profit
Prob lem #4
Work shee t Procedures
Accou nt Titles
Merch andis e Inven tory, Beginning
Sales
Sales Returns & Allowances
Purchases
Purchases Returns & Allowances
Purchases Discounts
Trans portat ion In
Salaries Payable
Merch andis e Inven tory, Ending
Income Statement
Credit
Debit
Balance Sheet
Cred it
Debit
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Required:
nted. Put a check mark (/)
A porti on of a work shee t for a merchandising entity is prese
extended.
in the colum ns wher e balan ce of the listed account s shoul d be
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Completing the Cycle for a Merchandising Business I 8-23
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NAME:
SCORE:
PROFESSOR:
SECTION:
problem #5
preparing the Worksheet
The unadjusted trial balance of the Dores Marie ·Pateno Hobby Shop on Dec. 31, 2019
appears below:
Dores Marie Pateno Hobby Shop
Unadjusted Trial Balance
Dec.31,2019
· Cash
Accounts Receivable
Merchandise Inventory
Prepaid Rent
Shop Equipment
Accumulated Depreciation
Accounts Payable
Pateno, Capital
Pateno, Withdrawals
Sales
Sales Discounts
Purchases
Purchases Returns and Allowances
Transportation In
Salaries Expense
Advertising Expense
Utilities Expense
Supplies Expense
Totals
P 100,000
500,000
700,000
300,000
1,600,000
P 200,000
400,000
1,300,000
100,000
2,900,000
100,000
800,000
200,000
100,000
400,000
150,000
100,000
50,000
PS,000,000
Additional information:
Accrued salaries at year-end amounted to P30,000.
b. Rent in the amount of Pl00,000 has expired during the year.
a.
c. Depreciation on shop equipment is P200,000.
d. The Dec. 31 merchandise inventory amounted to PS00,000.
Required:
Prepare the worksheet.
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8-24
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Basic Financial Accounting and Reportmg
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Problem #6
Preparing the Worksheet
The unadjusted trial balance of the John Bala Maps as at Dec. 31, 2019 follows:
John Bala Maps
Unadjusted Trial Balance
Dec. 31, 2019
Cash
Accounts Receivable
Merchandise Inventory
Prepaid Insurance
Office Supplies
Office Equipment
Accumulated Depreciation
Accounts Payable
Bala, Capital
Bala, Withdrawals
Sales
Sales Returns and Allowances
Sales Discounts
Purchases
Purchases Returns and Allowances
Purchases Discounts
Transportation In
Salaries Expense
Advertising Expense
Rent Expense
Totals
p
31,000
83,000
627,000
54,000
68,000
370,000
p
50,000
58,000
517,000
87,000
2,675,000
26,000
23,000
1,512,000
14,000
19,000
38,000
327,000
61,000
26,000
P3,333,000
P3,333,000
Additional information:
a.
Merchandise inventory as at Dec. 31J 2019 amounted to PS32,000.
b. Insurance coverage with premiums of P18,000 has expired during the year.
c. Depreciation for the year amounted to P25,000.
d. Office supplies remaining at year-end amounted to PlS,000.
e. Salaries in the amount of P9,000 have accrued as at Dec. 31, 2019.
Required:
Prepare the worksheet.
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problem #7
Statements
preparing the Worksheet, Adjusting and Closing Entries, and Financial
2019 are as
The ledger accounts of the Christin e Sousa Bags for the year ended Dec. 31,
follows:
Accu. Depreciation -Off. Bldg.
Accu. Depreciation -Off. Equipt.
Accounts Receivable
Accounts Payable
cash
Transportation In
Insurance Expense
Interest Expense
Sousa, Capital
Sousa, Withdrawals
Land
Merchandise Inventory
Mortgage Payab le
P 100,000
150,000
136,000
74,000
72,000
72,000
25,000
208,000
1,510,000
200,000
400,000
598,000
1,100, 000
Notes Payable du e in 2 yrs .
Office Buildin g
Office Equipm ent
Office Suppli es
Prepai d Advert is ing
Purchases Discou nts
Purchases Rets . & Allow.
Purchases
Salaries Expense
Sales Discou nts
Sales Return s and Allow.
Sales
Travel Expense
p 200,000
1,600,000
570,000
42,000
75,000
172,000
133,000
2,643,000
862,000
161,000
187,000
4,600,000
188,00 0
Additional inform ation :
a. Office supplies consu med during the year amounted to Pl 7,000.
b. Advertising expense in the amou nt of P25,000 has expired during the year.
c. Salaries of P21,0 00 have accrued as at Dec. 31, 2019.
amou nted to
Depreciation on the office building and on the office equip ment
PlS,0 00 and P20,0 00, respectively.
e. The Dec. 31, 2019 endin g inven tory is P723,000.
d.
Required:
1. Prepare the works heet.
2. Prepare the financ ial statem ents.
3. Prepare the ad~usting and closing entries.
NAME:
SECTION:
SCORE:
PROFESSOR:
-
~ ~ ~- - - - - - -~:..:.:::.:_..:==-=- - -- - - - Problem #8
Preparing the Income Statement-Function of Expense Method
Accounts selected from the Dec. 31, 2019 trial balance of the Victoriano Navarette
Traders are listed below:
Sales
Purchases
Merchandise Inventory, 1/1/2019
Merchandise Inventory, 12/31/2019
Salaries Expense-Selling
Salaries Expense-General
Office Supplies Expense
Depreciation Expense-Office Equipment
Sales Returns and Allowances
Insurance Expense _,.
Sales Discounts
Transportation Out
Depreciation Expense-Store Equipment
Purchases Returns and Allowances
Selling Supplies Expense
Purchases Discounts
Tra.nsportation In
Miscellaneous Expenses
P 9,630,000
4,720,000
2,170,000
1,430,000
1,140,000
920,000
460,000
320,000
280,000
55,000
210,000
170,000
160,000
110,000
80,000
70,000
50,000
30,000
Required:
Prepare the income stateme~t using the function of expense method.
Completing the Cycle for a Merchandising Business
I
8-27
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SCORE:
PROFESSOR:
problem #9
trial
The accounts of Marissa Babilonia Health Store selected from the Dec. 31, 2019
balance are as follows :
P 150,000
Advertising Expense
Transportation Out
Depreciation Expense-Office Equipm ent
Depreciation Expense-Store Equipm ent
Transportation In
Merchandise Inventor y, 1/1/201 9
Merchandise Inventor y, 12/31/2 019
Miscellaneous Expenses
Office Supplies Expense
Purchases
Purchases Returns and Allowances
Purchases Discoun ts
Salaries Expense-Selling
Salaries Expense-General
260,000
110,000
140,000
100,000
1,160,000
1,040,000
90,000
430,000
6,710,000
250,000
180,000
960,000
1,130,000
9,810,000
260,000
140,000
70,000
Sales
Sales Returns and Allowances
Sales Discounts
Selling Supplies Expense
Required: Prepare the income statem ent using the function of expense metho d.
Problem #10
The accounts of Ramon Woo Milk Products follow:
Accounts Payable
Accounts Receivable
Accumulated Deprec iationOffice Equipm ent
Accumulated Deprec iationStore Equipm ent
Cash
Woo, Capital
Cost of Goods Sold
Woo, Withdra wals
General Expenses
Interest Expense
Interest Payable
Inventory, 1/1/201 9
P 16,950
43,700
22,450
16,000
7,890
74,620
?
9,000
116,700
5,400
1,100
69,350
Inventory, 6/30/20 19
Long-term Notes Payable
Office Equipment
Purchases
Purchase Discounts
Purchase Returns & Allows.
Salaries Payable
Sales Discounts
Sales Returns & Allows.
Sales
Selling Expenses
Store Equipment
Supplies
Unearned Revenues
P 65,520
39,000
58,680
364,000
1,990
3,400
2,840
10,400
18,030
731,000
132,900
88,000
5,100
13,800
d. In a
Required: Prepare the income statem ent using the functio n of expense metho
separate schedule, show the compu tation of cost of goods sold .
.
8-28
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d Reporting by Prof WIN Bailado
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SCORE:
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SECTION:
Problem #11
Preparing the Closing Entries
A portion of the Dec. 31, 2019 worksheet for Jun Torres Distributors is shown below.
For simplicity, all operating expenses have been combined. The periodic inventory
system is used.
I
Income Statement
Account Titles
Debit
Merchandise Inventory, Beginning
Torres, Capital
Torres, Withdrawals
Sales
128,000
Sales Returns & Allowances
Sales Discounts
Purchases
3,000
9,000
660,000
Purchases Returns & Allowances
Purchases Discounts
Transportation In
Operating Expenses
Merchandise Inventory, Ending
Credit
280,000
24,000
1,000,000
6,000
13,200
16,000
250,000
118,000
Required : Prepare the closing entries.
I
Balance Sheet
Credit
Debit
118,000
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