SAINT COLUMBAN COLLEGE

College of Business Education

NC III – BOOKKEEPING TRAINING

ASSESSMENT EXAMINATION

Name: ______________________________ Course: __________ Date: ____________________

PROBLEM 2 (PERPERTUAL INVENTORY SYSTEM)

Andrik Cruz opened a merchandising business with a trade name, Andrik Trading Co. Operations
began on June 1, 2017 and the following transactions were completed during the month:

June 1 - Withdrew P500,000 from a personal savings account and used it to open a new bank account in the
name of Andrik Trading Co.
1- Invested the following assets:
Furniture and Fixtures P400,000
Supplies 50,000
1- Acquired equipment costing P500,000. A payment of P200,000 in cash was made and a 12%-note was
issued for the remainder, payable in six equal monthly installments plus interest on the outstanding
balance.
3- Cash purchases, P150,000.
4- Some of the goods purchased for P14,000 on June 3rd are returned to the supplier for being defective.
The latter refunds the corresponding amount.
5- Cash Sales, P240,000. Cost of goods sold on cash sales is 60% on sales price.
6- A customer of June 5th returns some of the items bought for P20,000. This amount is refunded to him.
7- Goods bought from WID Corp for P100,000. Terms: P20,000 cash; balance on account, terms, 4/10,
n/30.
8- Pays the freight bill for the sale of merchandise on June 5th, P2,000.
9- Paid rent for the month, P7,150.
10 - Pays the freight bill for the purchases of June 7th, P3,000.
11 - The light and water bills are paid, P1,000.
12 - Paid advertising for the month, P3,000.
14 - Goods costing P70,000 are sold on account to Content Trading Co. for P120,000. Term: 3/20, n/30.
15 - The payroll for June 1-15 is paid, P52,000.
17 - The balance of the account with WID Corp is paid in full.
18 - Content Trading Co. pays its account in full.
18 - Goods costing P20,000 are sold on account to Rio Mazo for P50,000, Term: 2/10, n/30.
21 - Rio Mazo complains that some of the goods delivered to her were defective. Accordingly, account is
reduced by P10,000.
22 - Purchase goods costing P200,000 on account from ABC Corp. Term: 3/10, n/30.
24 - Some of the goods bought on June 22nd are defective. Upon informing the supplier of such defects, the
latter reduces the amount due to him by P40,000.
28 - Purchases on account, P150,000.
28 - Rio Mazo pays her account.
30 - Goods costing P60,000 are sold on account to Gloria Garcia for P110,000.
30 - Paid the account in with ABC Corp in full.
30 - Paid the first installment of the note plus the interest.
30 - Paid the following expenses:
Taxes and Licenses --------------- P 4,000
Salaries ----------------------------- 52,000
Miscellaneous --------------------- 3,000

Additional Information on January 31, 2018.

 Merchandise Inventory, per physical count P 263,000

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Requirements:
1. Prepare journal entries using a 2-column general journal using Perpetual Inventory System.
2. Post the journal entries in the General Ledger.
3. Prepare a Trial Balance
4. Prepare the following Financial Statements:
 Income Statement
 Statement of Financial Position (Balance Sheet)
 Statement of Changes in Owner’s Equity
 Statement of Cash Flows
5. Prepare closing entries in the General Journal.
6. Prepare Post-Closing Trial Balance.

PROBLEM 3
Instruction: Assuming a calendar year accounting period, prepare adjusting entries on the following
independent transactions on December 31, 2017.

1. The Supplies Inventory account showed a beginning balance of P21,740. Purchases during the year
were P45,260. The ending inventory revealed supplies on hand of P13,970.

2. Paid P24,000 for a 1-year fire insurance policy to commence on September 1. The amount of premium
paid was debited to Prepaid Insurance.

3. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Century Savings Bank on
October 1, 2017.

4. Paid P160,000 cash to purchase a delivery van on January 1. The van was expected to have a 3-
year life and a P10,000 salvage value. Depreciation is computed on a straight-line basis.

5. Paid P78,000 cash in advance on September 1, 2017 for a 1-year lease on office space. The amount
paid was debited to Rent Expense.

6. Acquired Office Equipment costing P352,800 on April 1, 2017. The equipment is expected to last 5
years after which it will be worthless.

7. Assume that Dec. 31 is a Friday and that the company pays its employees a total of P87,500 on
Saturday.

8. In December2017, a real property tax assessment for P16,000 on land owned during 2017 was
received from the city. The taxes, which are unpaid and unrecorded, are already due but the company
intends to pay them on February 2018.

9. Accounts Receivable Balance at the end of the year is P500,000. Estimated Uncollectible Accounts had
a balance of P10,000 before adjustment. The account should be brought-up to 5% of the outstanding
receivable account.

10. Using the same information in Item #9 but instead, aging of accounts receivable is used to estimate
the uncollectible account as follows:
Age of Receivable Outstanding Balance Probability of Collectability
1-60 days P 200,000 99%
61-120 days 150,000 98%
121 – 180 days 90,000 97%
180 days and over 60,000 95%
Total P 500,000

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