COLUMBAN COLLEGE, INC

Center for Life-Long Learning and Skills Development

#1 1ST Street New Asinan, Olongapo City

MERCHANDISING/TRADING INDUSTRY
PERPETUAL INVENTORY

Below are the transaction Darna Merchandising Company for the first month of operation.

Jan 1 Ms. Darna invested P 900,000 into the business to buy and sell various merchandise.
3 Purchased on account merchandise, P350,000 terms 2/10, n/30 FOB Shipping point.
4 Purchased Office supplies for cash P1,500.
5 Sold for cash P 200,000; cost of sales, P100,000
6 Returned P5,000 worth of defective merchandise.
10 Sold on account, P120,000 to customers with credit terms: 2/10, n/30 FOB Destination.
Cost of Sales, P80,000.
10 Paid the freight charges on transaction made on Jan. 3, P 500
11 Paid in full the purchases made on Jan. 3
12 Made additional purchases for cash, P 150,000.
14 Borrowed from the bank P 550,000 and issued a promissory note.
15 Purchased computer equipment for cash, P 55,000.
15 Paid salaries to employees – P 4.500.
16 Refunded P 5,000 to customers.
17 Sold merchandise for P 250,000. FOB Destination. Cost of Sales, P150,000
20 Paid the freight charges on Jan 10 and 17 – P1,500.
20 Collected from customers on account on Jan 10.
25 Purchased merchandise on account, P 220,000 terms 2/10, n/30 FOB Shipping Point
26 Sold Merchandise, P 350,000 terms 2/10, n/30. Cost of Sales, P250,000
27 Owner got P 5,500 from the business.
28 Paid the following: Rent – P 3,000; Utilities- P2,000, Advertising – P1,000 and salaries
P4,500.

INSRUCTIONS:
1. PERFORM THE ACCOUNTING CYCLE USING PERPETUAL INVENTORY SYSTEM.
2. USE THE FOLLOWING ACCOUNT TITLES FOR JOURNAL ENTRIES AND FINANCIAL
STSTAEMENTS
Use this account titles for your Journal Entries
101 Cash 401 Sales
103 Accounts Receivable 402 Sales Returns and Allowances
104 Merchandise Inventory 403 Sales Discount
105 Supplies 501 COST OF SALES
110 Equipment 505 Salaries
201 Accounts Payable 506 Rent Expense
202 Notes Payable 507 Freight Out
301 Darna, Capital 508 Utilities
302 Darna, Drawing 509 Advertising
304 Income Summary
Use this account titles in doing your Financial Statements
Acct
code Account titles Acct code Account titles
ASSETS REVENUE
101 Cash and cash equivalent 401
103 Receivable 402 Net Sales
104 Inventory 403
105 Prepaid Expenses
110 Property Plant and Equipment EXPENSES
501 Cost of Sales
LIABILITIES 505 Salaries
201 Accounts Payable 506 Rent Expense
202 Notes Payable 507 Freight Out
508 Utilities
OWNER'S EQUITY 509 Advertising
301 Darna, Capital
302 Darna, Drawing
304 Income Summary