PROBLEM 1

The following account balances are taken from the ledger of The Dams Company as of December
31, 2009:

Sales 3,385,400 Purchases 2,945,800

Purchase discount 54,300 Sales discount 62,800
Salaries & wages 156,700 Merchandise inventory, Jan. 1 388,800
Freight in 18,600 Purchase returns 11,200
Merchandise inventory, Dec. 31 481,700 Sales returns 16,800
Taxes & licenses 47,700 Interest income 4,400
Interest expense 38,900 Freight out 22,600
SSS contributions expense 12,300 Philheaslth contributions expense 2,500
Doubtful accounts 15,600 Miscellaneous income 8,100
Insurance expense 18,200 Advertising 22,800
Depreciation-Store equipment 7,700 Rent expense 144,000
Pag-ibig contribution expense 3,900 Gain on sale of equipment 3,000
Security services 72,000 Commission income 25,400
Repairs & maintenance 16,400 Depreciation – Office equipment 10,300
Miscellaneous expenses 19,900

REQUIRED
Prepare an income statement

PROBLEM 2
In each of the following cases, compute for the unknown items. Write the answers only on your
worksheet.

Case 1 Case 2 Case 3 Case 4

Net sales 876,500 1,654,300 (5) 9,876,543
Less: Cost of goods sold
Merchandise inventory, beginning 95,300 (3) 658,700 (8)
Add: Net purchases (1) 1,195,200 (6) 7,122,723
Total goods available for sale 733,400 1,483,900 4,461,300 (9)
Less: Merchandise inventory, end 104,900 338,100 (7) 1,443,765
Cost of goods sold (2) (4) 3,765,100 (10)
Gross profit 122,800 508,500 1,406,200 2,963,018

PROBLEM 3
The trial balance of Ping Villar as of September 30, 2009 includes the following account
balances:

Cash in bank 765,400

Accounts receivable 358,300
Accounts payable 477,900
Building 3,267,800
Interest payable 106,900
Accumulated depreciation – Store eqpt. 88,300
Notes receivable 75,000
Land 885,000
Office supplies 27,800
Withholding taxes payable 7,700
Notes payable 225,000
Office equipment 245,600
Accumulated depreciation – Building 643,800
Store supplies 31,700
Telephone payable 19,600
Rent income receivable 18,000
Accumulated depreciation – Office eqpt. 48,800
 Store equipment 376,700
Mortgage payable 800,000
Interest receivable 8,200
Merchandise inventory, Sept. 30 1,075,200
Electricity payable 27,200

Other information:
Ping Villar, Capital, January 1 4,044,100
Ping Villar, Drawing 120,000
Net income 765,400

REQUIRED
1. Prepare a statement of changes in equity
2. Prepare a balance sheet as of September 30, 2009

PROBLEM 4
The trial balance FAYE QUINTO STORE as of December 31, 2015 is shown below.
Dr Cr
Cash in bank 645,000
Accounts receivable 775,000
Allowance for doubtful accounts 24,000
Notes receivable 180,000
Merchandise inventory, January 1 840,000
Store equipment 340,000
Accumulated depreciation 82,000
Office equipment 250,000
Accumulated depreciation 75,000
Accounts payable 654,000
Notes payable 120,000
SSS, PH & Pag-ibig payable 8,000
3-Year mortgage loan payable 300,000
Faye Quinto, Capital 1,930,000
Faye Quinto, Drawing 400,000
Sales 9,780,000
Sales discount 146,000
Sales returns 34,000
Purchases 8,250,000
Freight in 36,000
Purchase discount 160,000
Purchase returns 28,000
Interest income 3,000
Commission income 16,000
Sales salaries 400,000
Office salaries 200,000
Sales taxes 64,000
Rent expense 240,000
Selling supplies expense 32,000
Office supplies expense 18,000
Insurance expense 36,000
Light & telephone 144,000
Security services 60,000
SSS, PH & Pag-ibig contributions 48,000
Interest & bank charges ____42,000 . .
13,180,000 13,180,000
Data for adjustments:
1. Merchandise inventory at year-end , 886,000
2. The note receivable of 180,000 is a 10%, 80-day note received on December 1, 2015
3. Doubtful accounts are equal to ½ of 1% of net sales
4. Depreciation rates: Store equipment – 5%; office equipment – 10%
 5. The note payable of 120,000 is a 75-day, 10% note issued on December 16, 2015
6. Unused selling supplies on September 30, 2015, 3,500
7. The 3-year mortgage loan payable of 300,000 is a 12% loan obtained on September 30, 2015.
The one-year interest deducted in advance was debited to Interest & Bank Charges.

REQUIRED
1. Worksheet with adjusting entries
2. Statement of comprehensive income. Rent expense, insurance expense and security services are to
be allocated to selling and administrative expenses in the ratio of 3:2. SSS, PH and Pag-ibig
contributions and light & telephone are to be allocated to selling and administrative expenses in
the ratio of sales to office salaries
3. Statement of changes in equity
4. Statement of financial position
5. Closing entries
6. Post-closing trial balance
7. Reversing entries