BOOKKEEPING NC III

REVIEW AND ENHANCEMENT PROGRAM

ASSESSMENT ON PERIODIC INVENTORY SYSTEM

Name:______________________________________ Rating:_____________

LEGNA GENERAL MERCHANDISE

Legna Naiugalac is the sole owner of Legna Genral Merchandise. The transactions for the month of
August 2017 consisted of the following:

August 1 Received P100, 000.00 cash from Legna Naiugalac as initial investment.

2 Bought merchandise for cash from Ayos General Merchandise, P80, 000.00.

2 Bought equipment for cash amounting to 20,000

3 Returned P4, 000.00 cost of merchandise to Ayos General Merchandise for not
conforming with the order.

4 Bought merchandise on account costing 20, 000 from Ocsalev Hyper Mart. Term: 2/10,
n/30.

5 Paid freight P400.00 on July 4 transaction.

6 Returned P4, 000.00 cost of merchandise to Ocsalev Hyper Mart.

7 Paid the account with Ocsalev Hyper Mart, net of purchase returns and 2% purchase
discounts.

8 Sold merchandise for cash on Nagnatap Trading P60, 000.00, and paid freight amounting
to P600.00.

9 Received P2, 000.00 merchandise returned from Nagnatap Trading.

10 Sold merchandise on account to Ortega Enterprises P24, 000.00. Term: 3/10, n/30.

11 Received P13, 000.00 merchandise returned from Ortega Enterprises.

12 Collected the account of Ortega Enterprises, net of sales returns and 3% sales discounts.

13 Paid business permits amounting to P2, 400.00.

14 Borrowed money from a bank amounting to P20, 000.00 and issued a promissory note.
 15 Bought Merchandise on account P10, 400.00. Term: 2/20, n/30.

16 Bought supplies for cash P2, 000.00 for office use.

17 Paid salaries P3, 000.00.

18 Cash withdrawal by Legna Nauigalac for her personal use, P20, 000.00

20 Paid rent for the month, P7, 000.00.

22 Paid utilities, P2, 000.00.

26 Paid advertising, P1, 600.00.

30 Paid salaries P3, 000.00.

31 Merchandise Inventory, End, P60, 000.00

Required: Perform the complete accounting style cycle using Periodic Inventory System for Legna
General Merchandise. Observe all customary procedures in all respects, i.e., complete explanation in the
journals/particulars in the ledgers, correct folio referencing, double ruling, proper indention, etc.
 LEGNA GENERAL MERCHANDISE
CHART OF ACCOUNTS

ASSETS:

Current Assets:

101 - Cash

102 - Accounts Receivable

103 - Merchandise Inventory

104 - Supplies

Non-Current Assets:

105 - Equipment

LIABILITIES:

Current Liabilities:

106 - Account Payable

Non-Current Liabilities:

107 - Note Payable

OWNER’S EQUITY:

108 - L. Nauigalac, Capital

109 - L. Nauigalac, Drawing

110 - Income Summary

INCOME:

111 - Sales

112 - Sales Returns and Allowances

113 - Sales Discounts

COST EXPENSES:

114 - Purchases

115 - Purchase Returns and Allowances

116 - Purchase Discounts

117 - Freight-In

118 - Salaries

119 - Rent Expense

120 - Taxes and Licenses

121 - Advertisement

122 - Utilities

123 - Freight-Out
Date Account Titles F Debit Credit
Aug 1 Cash 101 200000
L. Nauigalac Capital 108 10000
Initial Investment
2 Merchandise Inventory 103 50000
Accounts Payable 106 50000
Bought merchandise on account
3 Accounts Receivable 102 40000
Sales 111 40000
Sold merchandise on account
3 Cost of good sold 114 15000
Merchandise Inventory 103 15000
To record cost of merchandise sold
5 Sales Returns and allowances 112 4000
Accounts Receivable 102 4000
Returned of merchandise from
Merchandise Inventory 103 1500
Cost of good sold 114 1500
To record merchandise returned
8 Taxes and Licenses 120 12000
Cash 101 12000
Payment of taxes and licenses
7 Cash 101 16000
L. Nauigalac, Capital 108 320
Additional investment 15680
8 Cash 101 60000
Sales 111 60000
Cash sales of merchandise
8 Freight – out 101 600
Cash 111 600
Payment of freight out
9 Sales Returns and allowances 112 2000
Cash 101 2000
Sales returned
10 Accounts Receivable 102 24000
Sales 111 24000
Sold merchandise on account
11 Sales returns and allowances 112 3000
Accounts Receivable 106 3000
Sales returned
12 Cash 101 20370
Sales Discount 113 630
Account Receivable 102 21000
Collected from the customer
13 Taxes and Licenses 120 2400
Cash 101 2400
Payment of taxes and licenses
14 Cash 101 20000
Notes Payable 107 20000
Cash purchases
15 Purchases 114 10400
Accounts Payable 106 10400
Purchased on accounts
16 Supplies 104 2000
Cash 101 2000
Cash Purchase
17 Salaries 112 3000
Cash 101 3000
Payment of salaries
18 Cash L. Naugalac Drawing 109 20000
101 20000
Withdrawal with the owner
20 Rent Expense 119 7000
Cash 101 7000
Payment of rent
22 Utilities 122 2000
Cash 101 2000
Payment of utilities
26 Advertisement 121 1600
Cash 101 1600
Payment of advertisement
30 Salaries 118 3000
Cash 101 3000
Payment of Salaries
 General Ledger
Cash

Date Particulars F Debit Credit Balances

Debit Credit
1 Initial Investment 100000 100000
2 Cash Purchase 80000 20000
2 Cash Purchase 20000 0
3 Purchase return and allowances 4000 4000
7 Freight-in 400 3600
7 Payment of account 15680 12080
8 Cash sales of merchandise 60000 47920
8 Freight- out 600 47320
9 Sales return and allowances 2000 45320
12 Collected from customer 20370 65690
13 Payment of tax 2400 63290
14 Borrowed 20000 83290
16 Cash purchase 2000 81290
17 Payment of salaries 3000 78290
18 Drawing 20000 58290
20 Payment of rent 7000 51290
22 Payment of utilities 2000 49290
26 Payment of advertisement 1600 47690
30 Payment of salaries 3000 44690

Account Receivable

Date Particulars F Debit Credit Balances

Debit Credit
10 24000 24000
11 3000 21000
12 21000 0

Merchandise Inventory

Date Particulars F Debit Credit Balances

Debit Credit
31 60000 60000
 Supplies

Date Particulars F Debit Credit Balances

Debit Credit
16 2000 2000

Equipment

Date Particulars F Debit Credit Balances

Debit Credit
2 2000 2000

Account Payable

Date Particulars F Debit Credit Balances

Debit Credit
4 20000 20000
6 4000 16000
7 16000 0
15 10400 10400

Notes payable

Date Particulars F Debit Credit Balances

Debit Credit
14 20000 20000

L. Nauigalac Capital

Date Particulars F Debit Credit Balances

Debit Credit
1 100000 100000
31 16290 116290
31 20000 96290
 L. Nauigalac Drawing

Date Particulars F Debit Credit Balances

Debit Credit
18 20000 20000
31 20000 0

Income Summary

Date Particulars F Debit Credit Balances

Debit Credit
31 78370 78370
31 42480 35890
31 19000 16290
31 16290 0

Sales

Date Particulars F Debit Credit Balances

Debit Credit
8 60000 60000
10 24000 84000
31 84000 0

Sales Return and Allowances

Date Particulars F Debit Credit Balances

Debit Credit
9 2000 2000
11 3000 5000

Sales Discounts

Date Particulars F Debit Credit Balances

Debit Credit
12 630 630
 Purchases

Date Particulars F Debit Credit Balances

Debit Credit
2 80000 80000
4 20000 100000
15 10400 110400
31 110400 0

Purchase Returns and allowances

Date Particulars F Debit Credit Balances

Debit Credit
3 4000 4000
6 4000 8000
31 8000 0

Purchase Discount

Date Particulars F Debit Credit Balances

Debit Credit
7 320
31 320

Freight in

Date Particulars F Debit Credit Balances

Debit Credit
5 400 400
31 400 0

Salaries

Date Particulars F Debit Credit Balances

Debit Credit
17 3000 3000
30 3000 6000
31 6000 0
Rent Expense

Date Particulars F Debit Credit Balances

Debit Credit
30 7000 7000
31 7000 0

Taxes and licenses

Date Particulars F Debit Credit Balances

Debit Credit
13 2400 2400
31 2400 0

Advertisement

Date Particulars F Debit Credit Balances

Debit Credit
26 1600 1600
31 1600 0

Utilities

Date Particulars F Debit Credit Balances

Debit Credit
22 2000 2000
31 2000 0

Freight out

Date Particulars F Debit Credit Balances

Debit Credit
8 600 600
31 600 0
 LEGNA GENERAL MERCHANDISE
TRIAL BALANCE
For the month ended August 2017

ACCOUNT TITLES DEBIT CREDIT

Cash 44 690
Supplies 2000
Equipment 20 000
Account Payable 10 400
Notes Payable 20 000
L. Naulgalac Capital 100 000
L. Naulgalac Drawing 20 000
Sales 84 000
Sales Return & allowances 5000
Sales Discount 630
Purchases 110 400
Purchase Return and Allowances 8 000
Purchase Discount 320
Freight in 400
Salaries 6000
Rent Expense 7000
Taxes & licenses 2400
Advertisement 1600
Utilities 2000
Freight out 600
222 720 222 720
 LEGNA GENERAL MERCHANDISE
INCOME STATEMENT
For the month ended August 2017

Net sales
Sales 84 000
Less: Sales Discount 630
Sales Return & allowances 5 000 5630
Net Sales 78 370

Cost of Goods sold

Purchases 110 400
Add: freight in 400
Gross Purchase 110 800
Less: Purchase Discount 320
Purchase Returns & allowances 8 000 8320
Cost of Goods available for sale 102 480
Less: Merchandise Inventory End 60 000
Cost of Goods sold 42 480
Gross Profit 35 890

Operating Expense
Freight out 600
Taxes & Licenses 2400
Advertisement 1600
Utilities 2 000
Rent expense 7000
Salaries 6000 19 600
16 290
 LEGNA GENERAL MERCHANDISE
STATEMENT OF CHANGES IN EQUITY
For the month ended August 2017

L, Naulgalac Capital, Beg 100 000

Add: Profit 16 290
Total: 116 290
Less: M. Eustacia, Drawing (20000)
L, Naulgalac Capital, End 96 290

LEGNA GENERAL MERCHANDISE

BALANCE SHEET
As of the Month of August 2017

Current Asset
Cash 44 690
Supplies 2 000
Merchandise inventory 60 000
Total Current Asset 106 690
Non-Current Assets
Equipment 20 000
Total Asset 126 690

Liabilities & Owners Equity

Liabilities
Accounts Payable 10 400
Notes Payable 20 000
Total Liabilities 30 400
Owners Equity
L. Nauigalac, Capital 96 290
Total Owners Equity 126 690
 LEGNA GENERAL MERCHANDISE
STATEMENT OF CASH FLOWS
For the month ended August 2017

Cash flow from operating activities

Collected from customer 20,370
Cash Purchase (102,000)
Purchase Return & allowances 4,000
Payment of accounts (15,680)
Freight in (400)
Freight-out (600)
Payment of Salaries (6,000)
Payment of rent & taxes (9,400)
Payment of Utilities (2,000)
Payment of advertisement (16,000)
Sales return & allowances (2,000)
Cash sales of merchandise 60,000
Net cash provided by used in Opt. activities (55310)

Cash Flow investing activities

Net cash provided by used in initial investment activities

Cash flow from financing activities

Initial investment 100,000
Borrowed money 20,000
Drawing (20,000)
Net cash provided by used inn financing activities 100,000
Net increase(decrease) cash 44,690

Cash balance at the beg peiod

Cash Balance at the end of period 44690
 Closing Entries

Sales 84,000
Sales Returns & allowances 5,000
Sales Discount 630
Income Summary 78,370
To close the sales account

Merchandise Inventory, End 60,000

Purchase return & allowances 8,000
Purchase Discount 320
Income Summary 42,480
Freight in 400
Purchases 110,400
To close all purchase account

Income Summary 19,600

Salaries 6,000
Rent 7,000
Taxes & Licenses 2,400
Advertisement 1,600
Utilities 2,000
Freight-out 600
To close the expense account

Income Summary 16,290

M. Eustacia, Capital 16,290
To close the profit account

M. Eustacia, Capital 20,000

M. Eustacia, Drawing 20,000
To close the drawing account
 LEGNA GENERAL MERCHANDISE
Post-Closing Trial Balance
For the Month Ended August 2017

Cash 44690
Account Receivable 2000
Merchandise Inventory 60000
Equipment 20000
126 690
Accounts Payable 30 400
Notes Payable 96 290
L. Naugalac Capital 126 690