Merchandising company

Beginning Balance
1-Jan-18
DR CR
110 Cash 34,150
120 Accounts Receivable 62,750
121 Allowance for Bad Debts 1,000
130 Notes Receivable 5,000
140 Inventory 81,700
150 Supplies 1,300
160 Prepaid Expenses 7,125
170 Vehicle 225,000
171 Accumulated Depreciation - Vehicle 45,000
180 Equipment 70,000
181 Accumulated Depreciation - Equipment 28,000
190 Furnitures 56,000
191 Accumulated Depreciation - Furnitures 22,400
199 Other Asset 11,200
210 Accounts Payable 41,650
220 Notes Payable 6,000
230 Expense Payable
240 Interest Payable
250 Income Tax Payable
260 Loans Payable 25,000
299 Other Liabilities 1,250
310 Owner, Capital 383,925
311 Owner, Drawings
410 Sales
411 Sales Returns and Allowances
412 Sales Discount
420 Interest Income
499 Other Income
510 Purchases
511 Purchase Returns and Allowances
512 Purchase Discount
520 Freight in
530 Rent Expense
540 Utilities Expense
550 Transportation Expense
560 Selling and Administration
570 Salaries Expense
 580 Taxes
590 Supplies Expense
600 Depreciation Expense
610 Interest Expense
620 Bad Debts Expense
699 Miscellaneous Expense
TOTAL 554,225 554,225
Journal Entries
a All beginning notes receivables was collected during the first quarter of the year
b All beginning notes payable was paid during the first quarter of the year
c Prepaid expenses expired during the first month of the year, P5,000 was rent expense w
d All beginning supplies was used in the first month of the year
e Sales for the year totaled P925,000, 25% was paid for cash while the rest was on credit
f Sales return and allowances amounted to P16,000, 10% was from cash sales while the re
g P665,000 of the accounts receivables was collected, half paid within the discount period
h Purchased a total of P15,000 supplies for cash throughout the year
g Purchases for the year was P379,000, all on account
i Returned purchases was P5,400
j Accounts payables paid was P359,650, 25% pay paid within discount period. Credit term
k Paid a total of P11,250 for delivery from supplier
l P500 was received from some other revenue of the company
l P1,250 was added to cash in bank because of interest income from bank deposits
m Expense paid during the year are as follows: Rent expense P60,000; Utilities expense P2
n Owner withdrew P50,000 from the business

Adjustments
a Vehicle has a useful life of 10 years, no salvage value, and is depreciated using straight
b Equipment has a useful life of 5 years, no salvage value, and is depreciated using straigh
c Furnitures has a useful life of 5 years, no salvage value, and is depreciated using straigh
d P500 of the purchased supplies remained unused at the end of the year
e Interest on the loans payable was 10%, 75% of the interest was paid while the rest is sti
f Estimated allowance for bad debts for the end of year was P2,300

Closing
a P100,250 of inventory remained unsold at year end
ter of the year

00 was rent expense while the remaining was utilities expense

he rest was on credit

cash sales while the rest was from credit sales
hin the discount period. Credit term was 5/15, n/45

unt period. Credit term of suppliers is 2/10, n/30.

m bank deposits
0; Utilities expense P25,000; Transportation expense P1,250; Selling and administration expense P61,000; Sala

eciated using straight line

preciated using straight line
preciated using straight line

aid while the rest is still payable

n expense P61,000; Salaries Expense P90,000; Miscellaneous expense P900.