Quijonez operates a dry goods stall located in the public market of Mariveles, Bataan. Shown below is a summ
On Jan. 1, invested P120,000 cash for her business under the trade name Quijonez Fashionables.
On Feb. 2, borrowed from BPI a 36-months loan amounting to P50,000 carrying a 9% interest payable annually.
On Feb. 3, bought office computer equipment for P36,000 in cash.
On Feb. 4, rented a building paying annual rent of P28,800; recorded the same to a permanent account.
On Feb. 25, purchased P2,000 worth of supplies for cash and recorded the same in the Supplies account.
On Mar. 1, bought various consumer products for resale. List price of supplier was P50,000 and she was grante
shipping point.
On Mar. 8, paid freight charges related to Mar. 1 purchase, P1,000.
On Mar. 9, returned goods to supplier related to Mar. 1 purchase, P500.
On Mar. 11, paid the Mar. 1 purchase less returns made on Mar. 9 and any applicable discount.
On Apr. 30, received additional investment from owner, P3,000.
On May 25, sold merchandise for P8,000, terms to customer are 1/15, n30, free on board, destination.
Paid delivery cost on May 26 related to May 25 sale, P200.
On May. 31, purchased a 1-year business insurance for the store and charged the P3,600 premium paid to an e
On Jun. 7, customers returned P300 worth of merchandise related to May. 25 sales.
On Jun. 8, collected the amount due on May 25 sale less applicable discounts and returns made last Jun. 7.
On Jun. 30, subleased a small portion of the store space receiving a P1,200 rent payment for 8 months which w
On Jul. 9, received advance payment from a major customer for goods to be delivered, P2,500 amount of cash
On Aug. 20, sold merchandise for P35,000 and received a 25% cash payment, the balance recorded in an open
On Oct. 14, Quijonez withdrew P1,500 cash.
On Oct. 29, sold P90,000 merchandise for cash.
On Nov. 30 Quijonez paid utilities amounting to P5,000.
On Dec. 15, Quijonez hired bookkeeper assistant for monthly salary of P12,000.
On Dec. 31, Quijonez paid miscellaneous operating expenses worth P350.
Additional information
the adjustments are computed on the nearest month basis. Round off any amounts to the nearest peso.
Requirements:
Journalize transactions for the year. (refer to Chart of Accounts Below)
Income received from subleasing portion last Jun. 30 of store space should be adjusted by Dec. 31.
Out of the advance payment received last Jul. 9, 40% have already been delivered by Quijonez by Dec. 31.
Salaries for the half-month of December should be accrued.
On Dec. 31, received bills for utilities, P200.
Doubtful accounts expense is recognized as 1.5% of net credit sales.
Physical inventory counted at period end amounted to P12,000.
Requirements:
Journalize transactions for the year. (refer to Chart of Accounts Below)
Post the journal entries to T-accounts.
Prepare unadjusted trial balance on a work sheet.
Prepare adjusting entries as of December 31.
Post adjusting entries to T-accounts.
Cost of goods sold method
Direct extension method
Prepare adjusted trial balance on the work sheet.
Prepare financial statements.
Prepare closing entries using Cost of goods sold method
Post closing entries to T-accounts
Prepare post-closing trial balance.
Identify which adjusting entries are qualified for reversing entries.
Prepare and post reversing entries.
"Quijonez Fashionables"
Comprehensive Exercise on Accounting for Merchandise Operations
Owned and Operated by Marie S. Quijonez
(AccountingCycle,Retail/Merchandising,SoleProprietorship)
taan. Shown below is a summary of her transactions for the year 20x1:
nez Fashionables.
a 9% interest payable annually.
o a permanent account.
in the Supplies account.
as P50,000 and she was granted 20% and 25% trade discount, respectively. Terms were 2/10, n60, fob
cable discount.
on board, destination.
2 Feb 2 Cash
5 Feb 25 Supplies
6 Mar 1 Purchases
7 Mar 8 Freight in
10 Apr 30 Cash
15 Jun 8 Cash
Sales discount
16 Jun 30 Cash
17 Jul 9 Cash
18 Aug 20 Cash
Accounts receivable
20 Oct 29 Cash
22 Dec. 15 No entry
50,000
Loans payable
Supplies 2,000
Cash
Purchases 30,000
Accounts payable
(P50,000 x 80% x 75% = P30,000)
Freight in 1,000
Cash
3,000
Quijonez, Capital
7,623
Sales discount 77
Accounts receivable
P8,000 - P300 returns = P7,700 balance x 0.99 = P7,623
1,200
Rent income
2,500
Unearned sales revenue
8,750
Accounts receivable 26,250
Sales revenue
P35,000 selling price x 25% = P8,750 cash portion
90,000
Sales revenue
No entry
120,000
50,000
36,000
28,800
2,000
30,000
1,000
500
590
28,910
3,000
8,000
200
3,600
300
7,700
1,200
2,500
35,000
1,500
90,000
5,000
350
-
Quijonez Fashionables
ADJUSTING ENTRIES
December 31, 2016
May 25 sales
Aug 20 sales (portion)
Jun 7 sales return (5/25 sale)
Jun 8 sales discount (5/25 sale)
Percentage experience
Doubtful accounts expense
Interest expense
Interest payable
P50,000 x 9% x 11/12 = P4,125
Depreciation expense
AD - Computer equipment
(P36,000 - P6000)/3 years = P10,000/year x 11/12 = P9,167 this year
Rent expense
Prepaid rent
P28,800/12 mos. = P2,400/mo. x 11 mos. = P13,200
Supplies expense
Supplies
P2,000 per record - P550 remaining = P1,450 used
Prepaid insurance
Insurance expense
P3,600/12 = P300/per mo. X 7 mos. = P2,100 required expense
P3,600 expense per record - P2,100 = P1,500 adjustment
P300/mo. x 5 mos. remaining life = P1,500 asset portion
Rent income
Unearned rent income
P1,200/8 mos. = P150/mo. x 6 mos. = P900 required income
P1,200 income per record - P900 = P300 adjustment
P150/mo. x 2 mos. remaining life = P300 liability portion
Salaries expense
Salaries payable
P12,000/ salary per month/ 2 = P6,000 half month
Utilities expense
Utilities payable
Percentage experience
Doubtful accounts expense
4,125 Dec. 31
4,125
9,167
9,167
this year Dec. 31
26,400
26,400
1,450
1,450
1,500
1,500
Dec. 31
300 Dec. 31
300
1,000
1,000
6,000
6,000
200
200
508
508
8,000
26,250
(300)
(77)
33,873
1.5%
508.00
17,910
590
500
12,000
1,000
30,000
P -
30,000
1,000
(590)
(500) 29,910
29,910
(12,000)
P 17,910
Sales revenue 134,000
Rent income 900
Sales return and allow
Sales discount
Income summary
17,910
6,000
2,100
5,200
26,400
1,450
9,167
508
350
200
4,125
61,113
1,500
Quijonez Fashionables
General Ledger (T-Accounts)
2016
Assets
Income
17,910
Liabilities Equ
300 50,000
Salaries payable
6,000 12/31
6,000
Expenses
26,400 508
1,450 4,125
Quijonez, Capital
120,000 1/1
3,000 4/30
123,000
Quijonez, Drawings
1,500
1,500
Quijonez Fashionables
General Ledger (T-Accounts) - Closed
2016
Assets
Income
133,000
1,000 12/31
134,000
12/31 134,000 Purchase discount
- 590 3/11
3/11 590
Sales discount -
6/8 77
77
77 12/31 Purchase return and allowances
- 500 3/9
3/9 500
Sales return and allowances -
6/7 300
300
300 12/31 Freight in
- 3/8 1,000
1,000 12/31
Rent income -
1,200 6/30
12/31 300
900
12/31 900 Cost of goods sold
- 12/31 17,910
17,910
17,910 12/31
-
Liabilities Equ
300 50,000
Salaries payable
6,000 12/31
6,000
Expenses Clea
26,400 508
26,400 12/31 508 12/31
- -
1,450 4,125
1,450 12/31 4,125 12/31
- -
Quijonez, Capital
120,000 1/1
3,000 4/30
123,000
61,113 12/31
1,500
182,613
Quijonez, Drawings
1,500
1,500
1,500 12/31
-
Clearing
Income Summary
134,523 12/31
73,410
61,113
61,113
-
QUIJONEZ FASHIONABLES
DECEMBER 31, 2016
WORKSHEET
DR CR DR CR DR CR
Cash P 175,713 P 175,713
Accounts receivable 26,250 26,250
Supplies 2,000 P 1,450 550
Prepaid rent 28,800 26,400 2,400
Computer equipment 36,000 36,000
Unearned sales revenue P 2,500 P 1,000 P 1,500
Loans payable 50,000 50,000
Quijonez, Capital 123,000 123,000
Quijonez, Drawings 1,500 1,500
Sales revenue 133,000 1,000 134,000
Sales discount 77 77
Sales return and allowances 300 300
Rent income 1,200 300 900
Purchases 30,000 30,000 -
Purchase discount 590 590 -
Purchase return and allowances 500 500 -
Freight in 1,000 1,000 -
Insurance expense 3,600 1,500 2,100
Utilities expense 5,000 200 5,200
Miscellaneous expense 350 350
Freight out 200 200
Allowance for doubtful accounts 508 508
Merchandise inventory 12,000 12,000
Prepaid insurance 1,500 1,500
AD - Computer equipment 9,167 9,167
Unearned rent revenue 300 300
Salaries payable 6,000 6,000
Utilities payable 200 200
Interest payable 4,125 4,125
Cost of goods sold 17,910 17,910
Salaries expense 6,000 6,000
Rent expense 26,400 26,400
Supplies expense 1,450 1,450
Depreciation expense 9,167 9,167
Interest expense 4,125 4,125
Doubtful account expense 508 508
Totals P 310,790 P 310,790 P 81,650 P 81,650 P 329,700 P 329,700
Profit or loss - -
Totals
Statement of Statement of Financial
Account Titles
Comprehensive Income Position
DR CR DR CR Cash
P 175,713 Accounts receivable
26,250 Allowance for doubtful accounts
550 Merchandise inventory
2,400 Supplies
36,000 Prepaid rent
P 1,500 Prepaid insurance
50,000 Computer equipment
123,000 AD - Computer equipment
1,500 Unearned rent revenue
P 134,000 Salaries payable
P 77 Utilities payable
300 Interest payable
900 Unearned sales revenue
Loans payable
Quijonez, Capital
Totals
-
2,100
5,200
350
200
508
12,000
1,500
9,167
300
6,000
200
4,125
17,910
6,000
26,400
1450
9167
4,125
508
P 73,787 P 134,900 P 255,913 P 194,800
61,113 61,113
P 134,900 P 134,900 P 255,913 P 255,913
DR CR
P 175,713
26,250
P 508
12,000
550
2,400
1,500
36,000
9,167
300
6,000
200
4,125
1,500
50,000
182,613
P 254,413 P 254,413
-
REPORT FORM
Quijonez Fashionables
Statement of Financial Position
As of December 31, 20x1
ASSETS ASSETS
Current assets Current assets
Cash P 175,713
Accounts receivables, net 25,742
Merchandise inventory 12,000
Supplies 550
Prepaid rent 2,400
Prepaid insurance 1,500
Total current assets 217,905
Noncurrent assets Noncurrent asset
Computer equipment, net 26,833
Total noncurrent assets 26,833
Total Assets P 244,738 Total Assets
LIABILITIES AND EQUITY
LIABILITIES
Current liabilities
Unearned sales revenue P 1,500
Unearned rent revenue 300
Salaries payable 6,000
Utilities payable 200
Interest payable 4,125
Total current liabilities 12,125
Noncurrent liabilities
Loans payable 50,000
Total Liabilities 62,125
EQUITY
Quijonez, Capital 182,613
Total liabilities and equity P 244,738
-
ACCOUNT FORM
Quijonez Fashionables
Statement of Financial Position
As of December 31, 20x1
ASSETS LIABILITIES AND EQUITY
Current assets LIABILITIES
Cash P 175,713 Current liabilities
Accounts receivables, net 25,742 Unearned sales revenue P
Merchandise inventory 12,000 Unearned rent revenue
Supplies 550 Salaries payable
Prepaid rent 2,400 Utilities payable
Prepaid insurance 1,500 Interest payable
Total current assets 217,905 Total current liabilities
Noncurrent assets Noncurrent liabilities
Computer equipment, net 26,833 Loans payable
Total noncurrent assets 26,833 Total Liabilities
Total Assets P 244,738
EQUITY
Quijonez, Capital
Total liabilities and equity P
1,500
300
6,000
200
4,125
12,125
50,000
62,125
182,613
244,738
Function of Expense Method
Quijonez Fashionables
Statement of Comprehensive income
For the year ended December 31, 20x1
SALES REVENUE
Gross sales revenue P 134,000
Less:
Sales returns and allowances (300)
Sales discounts (77)
Net Sales 133,623
OTHER INCOME
Rent income 900
SELLING EXPENSES
Freight out 200 (200)
Quijonez Fashionables
Statement of Comprehensive income
For the year ended December 31, 20x1
SALES REVENUE
Gross sales revenue P 134,000
Less:
Sales returns and allowances (300)
Sales discounts (77)
Net Sales 133,623
OTHER INCOME
Rent income 900
OPERATING EXPENSES
Cost of goods sold P 17,910
Salaries expense 6,000
Insurance expense 2,100
Utilities expense 5,200
Rent expense 26,400
Supplies expense 1,450
Depreciation expense 9,167
Doubtful account expense 508
Miscellaneous expense 350
Freight out 200
Interest expense 4,125 (73,410)
PROFIT P 61,113
BEGINNING EQUITY P -
ADD:
Additional investments 123,000
Profit for the year 61,113
184,113
LESS:
Drawings (1,500)
ENDING EQUITY P 182,613