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ACCOUNTING CYCLE : Merchandising Business ( PERIODIC INVENTORY SYSTEM) SET A

YEC Supplies Unlimited is a merchandising business that commence its operations on June 1,
2016. It is owned by Mr. Christian Buelva. It uses a Periodic Inventory System. The transactions
for the month of June.

1. Mr. Christian Buelva deposited P 125,000 in Metro bank in the name of the business,
YEC Supplies Unlimited.
2. Bought a computer on account P 32, 000
3. Acquired office supplies in cash P 3000
5. Purchased merchandise , P50,000 from Nice Traders.
Terms: FOB shipping point; 3/10, n/30.
6. Sold merchandise on account to Granitz Company , P40,000
Costing P 30,000 Terms: FOB Shipping point; 2/10, n/30.
8. Paid the amount due to Nice Traders.
8. Paid Zoom Freight P 2,100 for delivering merchandise purchase last June 5.
10. Purchase merchandise from Lockhart Company, P 28,000.
11. Received returns from Granitz Company, P 4,000.
Cost of merchandise P 3,000.
12. Received payment from Granitz Company less return and discounts.
13. Received refund for poor quality merchandise purchase on June 10 amounting to
P 4,000.
14. Borrowed P 30,000 from MetroBank by issuing a note.
15. Paid salaries, P 12,250.
16. Sold merchandise on account to Jack Company, P 60,000.
Terms: FOB destination; 2/10, n/30. Cost of merchandise P 45,000.
16. Paid P 800 freight charges on the sale of June 16.
19. Purchased P 46,000 of merchandise from Lockhart Company on account.
Terms: FOB destination; 3/10, n/30.
20 Returned P 5,000 of merchandise purchased on June 19
23. Sold merchandise costing P 36,000 for cash, P 48, 000.
25. Acquired supplies on account, P 3,500.
26. Made refunds to cash customers for defective merchandise P 2,400 costing P 1,800.
28. Mr. Christian Buelva withdrew P 21,000 from the business.
30. Paid the following operating expenses: salaries P 11,990, rent P 2,500,
advertising P 1,800, and utilities P 1,400.

Additional Information
The ending inventory of YEC Supplies Unlimited amounted to P 9,400.
YEC SUPPLIES UNLIMITED
CHART OF ACCOUNTS
(for JOURNAL and LEDGER)

100 ASSETS 400 INCOME


101 CASH 401 SALES
111 ACCOUNTS RECEIVABLE 411 SALES DISCOUNTS
121 MERCHANDISE INVENTORY 412 SALES RETURNS & ALLOWANCES
131 SUPPLIES 500 EXPENSES
135 EQUIPMENT 501 PURCHASES
200 LIABILITIES 511 PURCHASES RETURNS & ALLOWANCES
201 ACCOUNTS PAYABLE 512 PURCHASES DISCOUNTS
221 NOTES PAYABLE 513 FREIGHT IN
300 EQUITY 521 SALARIES EXPENSE
301 C. BUELVA, CAPITAL 531 RENT EXPENSE
320 C. BUELVA, WITHDRAWAL 541 ADVERTISING EXPENSE
330 INCOME SUMMARY 551 FREIGHT OUT
561 UTILITIES EXPENSE
YEC SUPPLIES UNLIMITED
CHART OF ACCOUNTS
(for FINANCIAL STATEMENTS)

100 ASSETS 400 INCOME


101 CASH AND CASH EQUIVALENTS
111 RECEIVABLES 401 NET SALES
121 MERCHANDISE INVENTORY
131 PREPAID EXPENSES 500 EXPENSES
135 PROPERTY, PLANT & EQUIPMENT
200 LIABILITIES 501 COST OF GOODS SOLD
201 ACCOUNTS PAYABLE 521 SALARIES EXPENSE
221 NOTES PAYABLE 531 RENT EXPENSE
300 EQUITY 541 ADVERTISING EXPENSE
301 C. BUELVA, CAPITAL 551 FREIGHT OUT
320 C. BUELVA, WITHDRAWAL 561 UTILITIES EXPENSE

REQUIRED:

1. Record the June transactions using the General Journal (GJ 1-3)
2. Post the June transactions in the General Ledger
3. Prepare a Trial Balance for the month of June
4. Prepare the necessary Financial Statements
5. Journalize (GJ-4) & Post the Closing Entries
6. Prepare a Post-Closing Trial Balance
YEC SUPPLIES UNLIMITED

GENERAL JOURNAL GJ- 1

Date Account Title & Explanation PR Debit Credit


2016
June 1 CASH 101 P 125,000
C. BUELVA, CAPITAL 301 P 125,000
To record initial investment

2 EQUIPMENT 135 32,000


ACCOUNTS PAYABLE 201 32,000
To record purchases equipment

3 SUPPLIES 131 3,000


CASH 101 3,000
To record purchase supplies

5 PURCHASES 501 50,000


ACCOUNTS PAYABLE 201 50,000
To record purchases from Nice Trader

6 ACCOUNTS RECEIVABLE 111 40,000


SALES 401 40,000
To record sales from Granitz Company

8 ACCOUNTS PAYABLE 201 50,000


CASH 48,500
PUCHASES DISCOUNTS 1,500
To record payment to Nice Trader, 3/10

8 FREIGHT IN 513 2,100


CASH 101 2,100
To record payment freight

10 PURCHASES 501 28,000


CASH 101 28,000
To record purchases form Lockhart Company
YEC SUPPLIES UNLIMITED

GENERAL JOURNAL GJ- 2

Date Account Title & Explanation PR Debit Credit


June 11 SALES RETURNS & ALLOWANCES 412 P 4,000
ACCOUNTS RECEIVABLE 111 P 4,000
To record return from Granitz Company

12 CASH 101 35,280


SALES DISCOUNTS 411 720
ACCOUNTS RECEIVABLE 111 36,000
To record collection from Granitz Company

13 CASH 101 4,000


PURCHASES RETURNS & ALLOWANCES 511 4,000
To record refund purchase on June 10

14 CASH 101 30,000


NOTES PAYABLE 221 30,000
To record borrowed cash from Metro Bank

15 SALARIES EXPENSE 521 12,250


CASH 101 12,250
To record payment of salaries

16 ACCOUNTS RECEIVABLE 111 60,000


SALES 401 60,000
To record sales from Jack Company

16 FREIGHT OUT 551 800


CASH 101 800
To record payment freight

19 PURCHASES 501 46,000


ACCOUNTS PAYABLE 201 46,000
To record purchases from Lockhart Company
YEC SUPPLIES UNLIMITED

GENERAL JOURNAL GJ- 3

Date Account Title & Explanation PR Debit Credit


June 20 ACCOUNTS PAYABLE 201 P 5,000
PURCHASES RETURNS & ALLOWANCES 511 P 5,000
To record purchase return from Lockhart Company

23 CASH 101 48,000


SALES 401 48,000
To record sales

25 SUPPLIES 131 3,500


ACCOUNTS PAYABLE 201 3,500
To record purchase supplies on account

26 SALES RETURNS & ALLOWANCES 412 2,400


CASH 101 2,400
To record sales return

28 C. BUELVA, WITHDRAWAL 320 21,000


CASH 101 21,000
To record withdrawal

30 SALARIES EXPENSE 521 11,990


RENT EXPENSE 531 2,500
ADVERTISING EXPENSE 541 1,800
UTILITIES EXPENSE 561 1,400
CASH 101 17,690
To record payment of operating expenses
YEC SUPPLIES UNLIMITED

GENERAL LEDGER

CASH 101 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 1 Initial investment GJ1 P 125,000 P 125,000
3 Purchase Supplies GJ1 P 3,000 122,000
8 Payment to Nice Trader GJ1 48,500 73,500
8 Payment of freight GJ1 2100 71,400
10 Purchase merchandise GJ1 28,000 43,400
12 Collection from Granitz Company GJ2 35,280 78,680
13 Refund from purchase merchandise GJ2 4,000 82,680
14 Borrowed cash from MetroBank GJ2 30,000 112,680
15 Payment of salaries GJ2 12,250 100,430
16 Payment of freight GJ2 800 99,630
23 Sales GJ3 48,000 147,630
26 Sales return GJ3 2,400 145,230
28 Withdrawal GJ3 21,000 124,230
30 Payment of Operating expenses GJ3 17,690 106,540

ACCOUNTS RECEIVABLE 111 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 6 Sales from Granitz company GJ1 P 40,000 P 40,000
11 Sales return from Granitz company GJ2 P 4,000 36,000
12 Collection from Granitz company GJ2 36,000 0
16 Sales from Jack company GJ2 60,000 60,000

MERCHANDISE INVENTORY 121 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 30 Closing entries GJ4 P 9,400 P 9,400
SUPPLIES 131 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 3 In cash GJ1 P 3,000 P 3,000
25 On account GJ3 3,500 6,500

EQUIPMENT 135 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 2 Purchase on account GJ1 P 32,000 P 32,000

ACCOUNTS PAYABLE 201 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 2 Purchase of equipment GJ1 P 32,000 P 32,000
5 Purchase from Nice Trader`s GJ1 50,000 82,000
8 Payment to Nice Trader`s GJ1 P 50,000 32,000
19 Purchase from Lockhart Company GJ2 46,000 78,000
20 Purchase`s return GJ3 5,000 73,000
25 Purchase supplies GJ3 3,500 76,500

NOTES PAYABLE 221 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 14 Borrowed cash from MetroBank GJ2 P 30,000 P 30,000

C. BUELVA, CAPITAL 301 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 1 Initial investment GJ1 P 125,000 P 125,000
30 Closing entries GJ4 3,940 128,940
30 Closing entries GJ4 P 21,000 107,940
C. BUELVA, DRAWING 320 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 28 In cash GJ3 P 21,000 P 21,000
30 Closing entries GJ4 P 21,000 0

INCOME SUMMARY 330 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 30 Closing entries GJ4 P 167,900 P 167,900
30 Closing entries GJ4 P 163,960 3,940
30 Closing entries GJ4 3,940 0

SALES 401 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 6 On account GJ P 40,000 P 40,000
16 On account GJ 60,000 100,000
23 In cash GJ 48,000 148,000
30 Closing entries GJ P 148,000 0

SALES DISCOUNT 411 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 12 Collection from Granitz Company GJ2 P 720 P 720
30 Closing entries GJ4 P 720 0

SALES RETURN & ALLOWANCE 412 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 11 On account GJ P 4,000 P 4,000
26 In cash GJ 2,400 6,400
30 Closing entries GJ P 6,400 0
PURCHASES 501 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 5 On account GJ1 P 50,000 P 50,000
10 In cash GJ1 28,000 78,000
19 On account GJ2 46,000 124,000
30 Closing entries GJ4 P 124,000 0

PURCHASES RETURN & ALLOWANCE 511 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 13 Cash refund GJ2 P 4,000 P 4,000
20 On account GJ3 5,000 9,000
30 Closing entries GJ4 P 9,000 0

PURCHASES DISCOUNT 512 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 8 Payment to Nice Trader GJ1 P 1,500 P 1,500
30 Closing entries GJ4 P 1,500 0

FREIGHT IN 513 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 8 In cash GJ1 P 2,100 P 2,100
30 Closing entries GJ4 P 2,100 0

SALARIES EXPENSE 521 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 15 In cash GJ P 12,250 P 12,250
30 In cash GJ 11,990 24,240
30 Closing entries GJ P 24,240 0
RENT EXPENSE 531 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 30 In cash GJ3 P 2,500 P 2,500
30 Closing entries GJ4 P 2,500 0

ADVERTISING EXPENSE 541 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 30 In cash GJ3 P 1,800 P 1,800
30 Closing entries GJ4 P 1,800 0

FREIGHT OUT 551 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 16 In cash GJ2 P 800 P 800
30 Closing entries GJ4 P 800 0

UTILITIES EXPENSE 561 BALANCE

DATE ITEM F DEBIT CREDIT DEBIT CREDIT


2016
June 30 In cash GJ3 P 1,400 P 1,400
30 Closing entries GJ4 P 1,400 0
YEC SUPPLIES UNLIMITED

TRIAL BALANCE

JUNE 2016

ACCT # ACCOUNT TITLE DEBIT CREDIT


101 CASH P 106,540
111 ACCOUNTS RECEIVABLE 60,000
131 SUPPLIES 6,500
135 EQUIPMENT 32,000
201 ACCOUNTS PAYABLE P 76,500
221 NOTES PAYABLE 30,000
301 C. BUELVA, CAPITAL 125,000
320 C. BUELVA, WITHDRAWAL 21,000
401 SALES 148,000
411 SALES DISCOUNTS 720
412 SALES RETURNS & ALLOWANCES 6,400
501 PURCHASES 124,000
511 PURCHASES RETURNS & ALLOWANCES 9,000
512 PURCHASES DISCOUNTS 1,500
513 FREIGHT IN 2,100
521 SALARIES EXPENSE 24,240
531 RENT EXPENSE 2,500
541 ADVERTISING EXPENSE 1,800
551 FREIGHT OUT 800
561 UTILITIES EXPENSE 1,400
TOTAL P 390,000 P 390,000
YEC SUPPLIES UNLIMITED

Statement of Cost of Goods Sold

For the month ended June 2016

Purchases P 124,000
Less: Purchases Returns & Allowances P 9,000
Purchases Discounts 1,500 10,500
Net Purchases P 113,500
Add: Freight In 2,100
Goods Available for Sale P 115,600
Less: Merchandise Inventory – ending 9,400
Cost of Goods Sold P 106,200

YEC SUPPLIES UNLIMITED

Income Statement

For The Month Ended June, 2016

Net Sales
Gross Sales P 148,000
Less: Sales Discounts P 720
Sales Returns & Allowances 6,400 7,100
Net Sales P 140,880
Cost of Goods Sold 106,200
Gross Profit P 34,680
Operating Expenses
Salaries Expense P 24,240
Rent Expense 2,500
Advertising Expense 1,800
Utilities Expense 800
Freight Out 1,400 30,740
Profit/(Loss) P 3,940
YEC SUPPLIES UNLIMITED

Statement of Changes in Equity

FOR The Month Ended June, 2016

C. Buelva, Capital - beginning P 125,000


Add: Profit 3,940
Total P 128,940
Less: C. Buelva, Withdrawal 21,000
C. Buelva, Capital – ending P 107,940

YEC SUPPLIES UNLIMITED

Statement of Financial Position

For The Month Ended June, 2016

ASSETS
CURRENT ASSETS
Cash & Cash Equivalents P 106,540
Receivable 60,000
Merchandising Inventory 9,400
Prepaid Expenses 6,500
TOTAL CURRENT ASSETS P 182,440
NON CURRENT ASSETS
Property, Plant, & Expenses 32,000
TOTAL ASSETS P 214,440

LIABLITIES
CURRENT LIABILITIES
Accounts Payable P 76,500
Notes Payable 30,000
TOTAL LIABLITIES P 106,500

EQUITY
C. Buelva, Capital – ending 107,940
TOTAL LIABILITIES AND OWNER’S EQUITY P 214,440
YEC SUPPLIES UNLIMITED

Statement of Cash Flows

For The Month Ended June, 2016

CASH FLOWS FROM OPERATING ACTIVITIES


Receipts from clients P 83,280
Receipt as refund from supplier 4,000
Payments to suppliers (76,500)
Payments to employees (24,240)
Payments for supplies (3,000)
Payments for freight (2,900)
Payments rent (2,500)
Payment to buyer as refund (2,400)
Payments for advertising (1,800)
Payments for utilities (1,400)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES P (27,460)

CASH FLOWS FROM FINANCING ACTIVITIES


Receipts from owner in form of withdrawal P 125,000
Receipts from borrowed cash from Metro bank 30,000
Payments to owner in form of withdrawal (21,000)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 134,000
NET CASH INCREASE (DECREASE) IN CASH P 106,540
YEC SUPPLIES UNLIMITED

GENERAL JOURNAL GJ- 4

Date Account Title & Explanation PR Debit Credit


CLOSING ENTRIES
June 30 Merchandise Inventory 121 P 9,400
Sales 401 14,800
Purchases Returns & Allowances 511 9,000
Purchases Discounts 512 1,500
Income Summary 330 P 167,900
To close nominal accounts w/ credit balances
and establish ending inventory
30 Income Summary 330 163,960
Sales Discounts 411 720
Sales Returns & Allowances 412 6,400
Purchases 501 124,000
Freight In 513 2,100
Salaries Expense 521 24,240
Rent Expense 531 2,500
Advertising Expense 541 1,800
Freight Out 551 800
Utilities Expense 561 1,400
To close nominal accounts w/ debit balances

30 Income Summary 330 3,940


C. Buelva, Capital 301 3,940
To close income summary account

30 C. Buelva, Capital 301 21,000


C. Buelva, Withdrawal 320 21,000
To close withdrawal account
YEC SUPPLIES UNLIMITED

POST CLOSING TRIAL BALANCE

JUNE 2016

ACCT # ACCOUNT TITLE DEBIT CREDIT


101 Cash P 106,540
111 Accounts Receivable 60,000
121 Merchandise Inventory 9,400
131 Supplies 6,500
135 Equipment 32,000
201 Accounts Payable P 76,500
221 Notes Payable 30,000
301 C. Buelva, Capital – ending ____________ 107,940
TOTAL P 214,440 P 214,440