Fundamentals of Accountancy,

Business and Management 1

(Second Quarter)
JENNIFER D. AMORA, MBA, CPA

Bureau of Curriculum Development

December 2017
MANAGEMENT OF LEARNING

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COURSE DESCRIPTION

Fundamentals of Accountancy, Business

and Management 1

This is an introductory course in accounting, business

and management data analysis that will develop
students’ appreciation of accounting as language of
business and an understanding of basic accounting
concepts and principles that will help them analyze
business transactions.

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES

POST-CLOSING
TRIAL BALANCE JOURNALIZING

CLOSING
POSTING
ENTRIES

FINANCIAL
STATEMENT TRIAL BALANCE

ADJUSTING
WORKSHEET
ENTRIES
 ADJUSTING ENTRIES

• Generally, adjusting entries are prepared for the following

reasons:
• To bring records or balances of accounts updated
• To properly match revenues against expenses during the
period

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ADJUSTING ENTRIES

• TYPES OF ADJUSTING ENTRIES

• Accruals
• Deferrals
• Provision for Estimated Uncollectible Accounts
• Provision for Depreciation of Property and Equipment or
Fixed Asset
• Unused Supplies Inventory Adjustment

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ADJUSTING ENTRIES

• Accruals
• Accrued Income
- Income that is already earned but not yet collected
- Receivable
• Accrued Expense
- Expenses that is a already incurred but not yet paid
- Payable

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ACCRUALS. EXAMPLE

• A building owned by ABC Company was partly rented by XYZ Company for 50,000
per month payable every 5th day of the following month. The rental for the month of
December 31, 2016 will be paid on January 5, 2017.

ABC Company
Year Particulars F Debit Credit
Dec 31 Accrued Rent Income 50,000
Rent Income 50,000

XYZ Company
Year Particulars F Debit Credit
Dec 31 Rent Expense 50,000
Accrued Rent Expense 50,000

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ADJUSTING ENTRIES

• Deferrals
• Pre Collected Income
- This is a income collected although not yet earned
• Pre Paid Expense
- These are expenses that are paid in advance before
they are incurred

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 DEFERRALS. EXAMPLE

PRE-COLLECTION
• On October 1, 2016, Ichiro Saberon Realty Co. collected P12,000 from a tenant of the
building it owns for the period of one (1) year from Oct. 1, 2016 to Oct 1, 2017. The
accounting period will end on December 31, 2016.
Year Particulars F Debit Credit
Oct 1 Cash 12,000
Unearned Rent Income 12,000

Year Particulars F Debit Credit

Dec 31 Unearned Rent Income 3,000
Rent Income 3,000

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 DEFERRALS. EXAMPLE

PREPAID EXPENSE
• On September 1, 2016, June Commercial paid an insurance premium covering the
period from September 1, 2016 to September 1, 2017 in the amount of P3,600. The
accounting period ends on December 31, 2016
Year Particulars F Debit Credit
Sept 1 Prepaid Insurance 3,600
Cash 3,600

Year Particulars F Debit Credit

Dec 31 Insurance Expense 1,200
Prepaid Insurance 1,200

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 PROVISIONS. EXAMPLE

Provision for Estimated Uncollectible Accounts

• Let us assume that Gabby Company has an outstanding accounts receivable of
P60,000. Based on past experience, it is estimated that 2% is doubtful of collection
at the end of the accounting period on December 31, 2016

Year Particulars F Debit Credit

Dec 31 Doubtful Accounts 1,200
Allow. For Doubtful Accounts 1,200

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 PROVISIONS. EXAMPLE

Provision for Depreciation of Property and Equipment or Fixed Asset

• On September 1, 2016 Adi Machine Shop acquired a brand new machine at a cost of
P100,000. The estimated life of the machine is 5 years and with a residual value of
10,000

Year Particulars F Debit Credit

Dec 31 Depreciation Expense 6,000
Accumulated Depreciation 6,000

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 UNUSED SUPPLIES INVENTORY. EXAMPLE

PREPAID EXPENSE
• On September 1, 2016, June Commercial paid an insurance premium covering the
period from September 1, 2016 to September 1, 2017 in the amount of P3,600. The
accounting period ends on December 31, 2016
Year Particulars F Debit Credit
Dec 1 Supplies Inventory 20,000
Cash in Bank 20,000

Year Particulars F Debit Credit

Dec 31 Supplies Expense 12,000
Supplies Inventory 12,000

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ADJUSTING ENTRIES. ACTIVITY

a. It is estimated that 2% of the outstanding accounts receivable is

uncollectible
b. Depreciation of the following property and equipment are not yet recorded
on January 2017:
1. Shop Equipment was acquired on January 1, 2016 with an estimated
life span of 10 years without scrap value at the end of its life. Only the
depreciation for 2016 was recorded in the amount of 24,000.
2. Furniture and Fixtures was acquired on July 1, 2016 with an estimated
life span of 5 years without scrap value at the end of its life. Only the
depreciation from July 1, 2016 to December 31, 2016 was recorded
c. Actual Inventory of shop supplies on January 31, 2017 was found to be
valued at P20,400
d. Of the Prepaid Insurance of P2,400 only 1,600 has actually expired.

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ADJUSTING ENTRIES. ACTIVITY

e. The following expenses were incurred but not yet paid at the end of
January 31, 2017
1. Accrued interest on note issued to First Mindanao Micro Lending
Company of P100,000 at 15% per annum on December 30, 2016.
Remittance of fraction of principal plus interest will be due on
February 2, 2017.
2. Monthly shop rental payable every third day of the succeeding
month, P2,500.
3. Unpaid taxes and licenses to the city government that due on
January 20, 2017, P1,850
4. Unpaid bill of Light and Water, P1,500 (Utilities Expense)

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES

POST-CLOSING
TRIAL BALANCE JOURNALIZING

CLOSING
POSTING
ENTRIES

FINANCIAL
STATEMENT TRIAL BALANCE

ADJUSTING
WORKSHEET
ENTRIES
 WORKSHEET

WORKSHEET
is prepared to facilitate the preparation of adjusting entries,
financial statements and closing entries.

10-COLUMN WORKSHEET
• Unadjusted Trial Balance
• Adjustments
• Adjusted Trial Balance
• Income Statement
• Balance Sheet

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 10-COLUMN WORKSHEET

WORKSHEET
is prepared to facilitate the preparation of
adjusting entries, financial statements and
closing entries.

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

10-COLUMN WORKSHEET

1
Write the heading of the worksheet

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

10-COLUMN WORKSHEET

2
Copy the trial balance on the first two
columns

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

10-COLUMN WORKSHEET

4
The adjusted trial balance is
the total of the preadjusted
trial balance and adjustments.
Debit +Debit = Debit
Credit + Credit= Credit
Credit + Debit= extend on
the side of the
difference(Bigger number)

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 10-COLUMN WORKSHEET

5
Extend the expenses and
income accounts on the Income
Statement column.

Debit amount to debit side

Credit amount to credit side

Get the difference

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

10-COLUMN WORKSHEET

Extend the Assets, Liabilities,

Capital and Drawing
accounts to Balance Sheet
columns

Debit amount to debit side

Credit amount to credit side

Get the difference

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 10-COLUMN WORKSHEET

Write the column for account titles “Net Income” if the

difference is Net income or “Net Loss” if the difference
is a net loss.
7
Write the final totals and double rule.

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 WORKSHEET

ACTIVITY

PREPARE 10-COLUMN WORKSHEET

40 MINS

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES

POST-CLOSING
TRIAL BALANCE JOURNALIZING

CLOSING
POSTING
ENTRIES

FINANCIAL
STATEMENT TRIAL BALANCE

ADJUSTING
WORKSHEET
ENTRIES
FINANCIAL STATEMENTS

formal statement showing the three elements comprising financial

position, namely assets, liabilities and equity.

is formal statement showing the financial performance of an entity

for a given period of time

shows the movements in the elements or components of the

shareholders equity

summarizes the operating, investing and financing activities

provides narrative description or disaggregation of items presented

in the financial statements and information about items do not
qualify for recognition.
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT
FINANCIAL STATEMENTS

Operating

ASSETS Investing
Financing
LIABILITIES
INCOME
EQUITY
EXPENSES

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 FINANCIAL STATEMENTS

WHO – the name of the company or

proprietor’s name if there is no
trade name
WHAT – the name or title of the report
WHEN – the date of the report or
statement

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 FINANCIAL STATEMENTS

ACTIVITY

PREPARE FINANCIAL STATEMENTS

40 MINS

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES

POST-CLOSING
TRIAL BALANCE JOURNALIZING

CLOSING
POSTING
ENTRIES

FINANCIAL
STATEMENT TRIAL BALANCE

ADJUSTING
WORKSHEET
ENTRIES
 CLOSING ENTRIES

Nominal accounts with an open balance of a

debit is to be credited by the same amount to be
reduced to zero.

These are journal entries that is recorded in the

general journal.

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 CLOSING ENTRIES

PROCEDURES IN CLOSING THE NOMINAL ACCOUNTS

1. Close the Income Accounts to Income and Expense
Summary
2. Close all Expense accounts to Income and Expense
Summary
3. Foot the debit and credit entries of the Income and
Expense Summary.
4. Close the Income and Expense Summary to Capital
Account

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 CLOSING ENTRIES

ACTIVITY

PREPARE CLOSING ENTRIES AND FOOT BALANCES

30 MINS

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES

POST-CLOSING
TRIAL BALANCE JOURNALIZING

CLOSING
POSTING
ENTRIES

FINANCIAL
STATEMENT TRIAL BALANCE

ADJUSTING
WORKSHEET
ENTRIES
 POST-CLOSING TRIAL BALANCE

• After closing statement of financial performance, what are

left open in the General Ledger of all Statement of Financial
Position accounts which are also considered as permanent
accounts.
• Another Trial Balance is prepare to prove the equality of
debit and credit.
• This time, Trial Balance will contain statement of financial
position accounts that remained open

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 POST-CLOSING TRIAL BALANCE

ACTIVITY

PREPARE POST-CLOSING TRIAL BALANCE

20 MINS

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES

POST-CLOSING
TRIAL BALANCE JOURNALIZING

CLOSING
POSTING
ENTRIES

FINANCIAL
STATEMENT TRIAL BALANCE

ADJUSTING
WORKSHEET
ENTRIES
 REVERSING ENTRIES

• Is a journal entry that is being recorded in the General

Journal and is done at the beginning of the next accounting
period after the opening entry.
• The purpose of this is to facilitate the recording of
subsequent transactions

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 WHAT ACCOUNTS ARE TO BE REVERSED?

a. All accruals
b. Deferrals whose original entries follow the nominal
approach

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 POST-CLOSING TRIAL BALANCE

ACTIVITY

PREPARE REVERSING ENTRIES

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 COVERAGE OF THE SESSION

• Business Transactions and Their Analysis As Applied to the

Accounting
• Adjusting Journal Entries
• Worksheet
• Financial Statements
• Closing Entries
• Post Closing Trial Balance
• Reversing Entries
• Merchandising Business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 MERCHANDISING

• A business organization that deals with buying and selling

of goods
• The main difference between service concern and
merchandising business is the presence of Merchandise
Inventory

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 DISCOUNT TERMS

• 2/10, N/30
• 2/10, 1/20, N/30
• 2/10, EOM

• Cash Discounts
• Purchase Discounts
• Sales Discount

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 MERCHANDISING VS SERVICE

MERCHANDISING BUSINESS SERVICE CONCERN

NET SALES xx SERVICE INCOME xx

Less: COST OF SALES xx Less: EXPENSE xx
GROSS PROFIT xx
PROFIT xx
Less: EXPENSES xx

PROFIT xx

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 INVENTORY SYSTEMS

• PERIODIC METHOD
• PERPETUAL METHOD

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 PERIODIC VS PERPETUAL
• PURCHASE OF INVENTORY
PERIODIC METHOD
Year Particulars F Debit Credit
JAN 1 PURCHASES XX
CASH/ACCOUNTS PAYABLE XX

PERPETUAL METHOD
Year Particulars F Debit Credit
JAN 1 MERCHANDISE INVENTORY XX
CASH/ACCOUNTS PAYABLE XX

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 PERIODIC VS PERPETUAL
• PURCHASE DISCOUNT
PERIODIC METHOD
Year Particulars F Debit Credit
JAN 1 ACCOUNTS PAYABLE XX
PURCHASE DISCOUNT XX

PERPETUAL METHOD
Year Particulars F Debit Credit
JAN 1 ACCOUNTS PAYABLE XX
MERCHANDISE INVENTORY XX

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 PERIODIC VS PERPETUAL
• PURCHASE RETURNS AND ALLOWANCES
PERIODIC METHOD
Year Particulars F Debit Credit
JAN 1 ACCOUNTS PAYABLE XX
PURCHASE RETURNS AND XX
ALLOWANCES
PERPETUAL METHOD
Year Particulars F Debit Credit
JAN 1 ACCOUNTS PAYABLE XX
MERCHANDISE INVENTORY XX

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 PERIODIC VS PERPETUAL
• FREIGHT IN
PERIODIC METHOD
Year Particulars F Debit Credit
JAN 1 FREIGHT IN XX
CASH/ACCOUNTS PAYABLE XX

PERPETUAL METHOD
Year Particulars F Debit Credit
JAN 1 MERCHANDISE INVENTORY XX
CASH/ACCOUNTS PAYABLE XX

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

 PERIODIC VS PERPETUAL
• SALES
PERIODIC METHOD
Year Particulars F Debit Credit
JAN 1 CASH/ ACCOUNTS RECEIVABLE XX
SALES XX

PERPETUAL METHOD
Year Particulars F Debit Credit
JAN 1 CASH/ ACCOUNTS RECEIVABLE XX
SALES XX
COST OF SALES
MERCHANDISE INVENTORY
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT
 PERIODIC VS PERPETUAL
• SALES DISCOUNT
PERIODIC METHOD
Year Particulars F Debit Credit
JAN 1 CASH XX
SALES DISCOUNTS XX
ACCOUNTS RECEIVABLE XX
PERPETUAL METHOD
Year Particulars F Debit Credit
JAN 1 CASH XX
SALES DISCOUNTS XX
ACCOUNTS RECEIVABLE
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT
 PERIODIC VS PERPETUAL
• SALES RETURNS AND ALLOWANCES
PERIODIC METHOD
Year Particulars F Debit Credit
JAN 1 SALES RETURNS AND ALLOW XX
CASH/ACCOUNTS RECEIVABLE XX

PERPETUAL METHOD
Year Particulars F Debit Credit
JAN 1 SALES RETURNS AND ALLOW XX
ACCOUNTS RECEIVABLE XX
MERCHANDISE INVENTORY XX
COST OF SALES
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT
 CHART OF ACCOUNTS
Account Titles
1 Cash in Bank 15 Sales
2 Accounts Receivable 16 Sales Discounts
3Estimated Uncollectible Accounts 17 Sales Returns and Allowances
4 Merchandise Inventory 18 Purchases
5 Supplies Inventory 19 Purchases Discounts
6 Furniture and Fixtures 20 Purchase Returns and Allowances
7 Accum. Depreciation - FF 21 Freight In
8 Transportation Equipment 22 Freight Out
9 Accum. Depreciation - TE 23 Salaries Expense
10 Accounts Payable 24 Utilities Expense
11 Accrued Expense 25 Taxes and Liscenses
12 Y. Gutierrez, Capital 26 Supplies Expense
13 Y. Gutierrez, Drawing 27 Rent Expense
14 Income and Expense Summary 28 Uncollectible Accounts
29 Depreciation Expense
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT
 TRANSACTIONS. MONTH OF JANUARY
DATE TRANSACTION
1 Ms. Gutierrez invested the following:
a. Bank deposit with Banco De Oro, P850,000
b. Merchandise with net realizable value of P250,000
c. Transportation Equipment with Fair Market Value of P1,800,000
2 Purchased merchandise in cash from Rowena Tuyor Trading costing P150,000 and paid freight and handling,
P2,500
3 Returned P3,000 cost of merchandise to Rowena Tuyor Trading due to some defects and no replacements
have been made.
5 Sold merchandise for cash, P120,000 to R. Guiang Grocery and gave a 3% trade discount and paid freight
shipment, P3,500
7 Purchase merchandise on account from S. Madelo Co. P50,000. Term: 3/10, N/30
8 Sold merchandise on account to F. Ybanez Trading, P185,000. Term: 2/10, N/30. Paid freight on shipment,
P1,200
9 Purchased merchandise on account from E Sardido Co. costing 230,000. Term: 2/10 EOM
10 Received P4,000 worth of merchandise on account from F. Ybanez Trading for not conforming with the order
and was not replaced
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT
 TRANSACTIONS. MONTH OF JANUARY
DATE TRANSACTION
12 Paid the account with S. Madelo Co., P48,500 after availing of the 3% purchase discount.
13 Sold merchandise on account to R. Langbid Co., P80,000 Term: 2/10, N/30
15 Purchased merchandise on account from M. Cervantes Co. 70,000. Term: 3/10, N/30
18 Returned P1,500 cost of merchandise to M. Cervantes Co. due to bad order and was not replaced
Collected in the full account of F. Ybanez Trading, P177,380.
20 Sold merchandise for cash, P50,000 ro R. Valle Enterprise and gave a 1% trade discount
22 Received P500 worth of merchandise from R. Valle Enterprise as item breakage and was not replaced due to
out of stock
23 Collected fro, R. Langbid Co. the amount of P78,400 net of 2% discount on Jan 13, sales on account
26 Sold merchandise on account to K Peras Commercial, P420,000. Term: 3/10. EOM
28 Paid the following expenses
Salaries for the month P15,000; Light and Water bill (Utilities) P5,800; Taxes and Licenses, P6,500; Rent
Expense, P10,000
30 Withdrew P20,000 for personal use of Ms. Gutierrez
31 Sold merchandise on account to J. Mascarinas Co. P35,000. Term 2/10, N/30
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT
Account Titles Debit Credit
Cash in Bank 1,011,180
Accounts Receivable 455,000
Merchandise Inventory 250,000
Transportation Equipment 1,800,000
Accounts Payable 298,500
Y. Gutierrez, Capital 2,900,000
Y. Gutierrez, Drawing 20,000
Sales 885,900
Sales Discounts 5,220
Sales Returns and Allowances 4,500
Purchases 500,000
Purchases Discounts 1,500
Purchase Returns and Allowances 4,500
Freight In 2,500
Freight Out 4,700
Salaries Expense 15,000
Utilities Expense 5,800
Taxes and Liscenses 6,500
Rent Expense 10,000
Total 4,090,400 4,090,400
 Unadjusted Trial Balance Income Statement Balance Sheet
Account Titles Debit Credit Debit Credit Debit Credit
Cash in Bank 1,011,180 1,011,180
Accounts Receivable 455,000 455,000
Merchandise Inventory, beg 250,000 250,000
Transportation Equipment 1,800,000 1,800,000
Accounts Payable 298,500 298,500
Y. Gutierrez, Capital 2,900,000 2,900,000
Y. Gutierrez, Drawing 20,000 20,000
Sales 885,900 885,900
Sales Discounts 5,220 5,220
Sales Returns and Allowances 4,500 4,500
Purchases 500,000 500,000
Purchases Discounts 1,500 1,500
Purchase Returns and Allowances 4,500 4,500
Freight In 2,500 2,500
Freight Out 4,700 4,700
Salaries Expense 15,000 15,000
Utilities Expense 5,800 5,800
Taxes and Liscenses 6,500 6,500
Rent Expense 10,000 10,000
Total 4,090,400 4,090,400
Merchandise Inventory, end 190,000 190,000
Total 804,220 1,081,900 3,476,180 3,198,500
Net Profit 277,680 277,680
1,081,900 1,081,900 3,476,180 3,476,180
Net Sales
Gross Sales xx
Less: Sales Discount (xx)
Sales Return and Alllowances (xx)
Net Sales xx
Cost of Goods Sold
Merchandise Inventory, beg xx
Purchases xx
Less: Purchase Discount (xx)
Purchase Returns and Allowances (xx)
Add Freight In xx
Less: Merchandise Inventory, end (xx)
Cost of Goods Sold xx
Gross Profit xx
Operating Expenses
Freight Out (xx)
Salaries Expense (xx)
Utilities Expense (xx)
Taxes and Licenses (xx)
Rent Expense (xx)
Profit for the Month xx