Comp
Quijonez Quijonez oper operates ates a dry goods goods stall stall locate located d in the the public public marke markett of Mariv Mariveles, eles, Bata Bataan. an. Sho &n Jan. 1, invested '$!",""" cash for her business under the trade name (Quijonez )ashio &n Feb. 2, borrowed borrowed from from B'+ a -months -months loan amounng to '/",""" carrying a 01 intere &n Feb. 3, bought o2ce computer e3uipment for '-,""" in cash. &n Feb. 4, rente rented d a buildi building ng payin paying g annual annual rent rent of '!4,4""5 '!4,4""5 recorded recorded the same same to to a perman perman &n Feb. 25, pur purch chas ased ed '!," '!,""" "" wort worth h of of sup suppl plies ies for for cas cash h and and reco record rded ed the the sam same e in in the the (Su (Su &n Mar. 1, bought various consumer products for resale. 6ist price of supplier was '/",""" shipping point. &n Mar. 8, paid freight charges related to Mar. 1 purchase, '$,""". &n Mar. 9, returned goods to supplier related to Mar. 1 purchase, '/"". &n Mar. 11, paid the Mar. 1 purchase less returns made on Mar. 9 and any applicable disco &n Apr. 30, received addional investment from owner, ',""". &n May 25, sold merchandise for '4,""", terms to customer are $8$/, n", free on board, 'aid delivery cost on May 26 related to May 25 sale, '!"". &n May. 31, pur purch chas ased ed a $y $yea earr bus busin ines esss ins insur uran ance ce for for the the stor store e and and char charge ged d the the ',',-"" "" pr &n Jun. 7, customers returned '"" worth of merchandise related to May. 25 sales. &n Jun. 8, collected the amount due on May 25 sale less l ess applicable discounts and returns &n Jun. 30, subleased a small poron of the store store space receiving a '$,!"" rent rent payment payment fo &n Jul. 9, receiv received ed adva advance nce pay paymen mentt from from a major major cust custome omerr for for goods goods to to be deliv deliver ered, ed, '!, '!, &n Aug. 20, sol sold d mer merch chan andi dise se for '/, '/,"" """ " and and recei eceive ved d a !/1 !/1 cas cash h pa paymen yment, t, the the bal balan ance ce r &n Oct. 14, Quijonez withdrew '$,/"" cash. &n Oct. 29, sold '0",""" merchandise for cash. &n No. 30 Quijonez paid ulies amounng to '/,""". &n !ec. 15, Quijonez hired bookkeeper assistant for monthly salary of '$!,""". &n !ec. 31, Quijonez paid miscellaneous operang operang e#penses worth '/". A""#$onal #n%or&a$on the adjustments are computed on the nearest month basis. 9ound o: any amounts to the
+nterest on loan contracted on Feb. 2 should be accrued. ;omputer e3uipment has useful life of years with '-,""" disposal value. 9ent paid last Feb 4 should be adjusted by end of the year. Supplies counted at the end of the year amounted to '//". +nsurance contracted last May 31 should be adjusted by !ec. 31. +ncome received from subleasing poron last Jun. 30 of store space should be adjusted by &ut of the advance payment received last Jul. 9, <"1 <"1 have have alre alread ady y bee been n del deliv iver ered ed by Quij Quijo o Salaries for the halfmonth of =ecember should be accrued. &n !ec. 31, received bills for ulies, '!"". =oub>ul =oub>ul acco accounts unts e# ense is reco reco nized nized as $./1 $./1 of of net credit credit sales. sales.
'hysical inventory counted at period end amounted to '$!,""". Requirements: ?ournalize transacons for the year. @refer to ;hart of Accounts Below 'ost the journal entries to 7accounts. 'repare unadjusted trial balance on a work sheet. 'repare adjusng adjusng entries as of =ecember $. 'ost adjusng entries to 7accounts. ;ost of goods sold method =irect e#tension method 'repare adjusted trial balance on the work sheet. 'repare Cnancial statements. 'repare closing entries using ;ost of goods sold method 'ost closing entries to 7accounts 'repare postclosing trial balance. +denfy which adjusng entries are 3ualiCed for reversing entries. 'repare and post reversing entries.
'hysical inventory counted at period end amounted to '$!,""". Requirements: ?ournalize transacons for the year. @refer to ;hart of Accounts Below 'ost the journal entries to 7accounts. 'repare unadjusted trial balance on a work sheet. 'repare adjusng adjusng entries as of =ecember $. 'ost adjusng entries to 7accounts. ;ost of goods sold method =irect e#tension method 'repare adjusted trial balance on the work sheet. 'repare Cnancial statements. 'repare closing entries using ;ost of goods sold method 'ost closing entries to 7accounts 'repare postclosing trial balance. +denfy which adjusng entries are 3ualiCed for reversing entries. 'repare and post reversing entries.
'(u#)one* Fa+,#onable+'
ehensive Exercise on Accounting for Merchandise Operations
&wned and &perated by Marie S. Quijonez
-o&pre,en+#e /erc#+e on Accoun$ng %or eta#l Opera$on+
(Accounng Cycle, Retail/Merchandising, Sole Proprietorship) Proprietorship)
n below is a summary of her transacons for the year !"#$%
ables.* st payable annually. ent account. plies* account. and she was granted !"1 and !/1 trade discount, respecvely. 7erms were !8$", n-", fob
nt.
esnaon. emium paid to an e#pense account. ade last Jun. 7. r 4 months which was recorded as income upon receipt. "" amount of cash received and recorded it as a liability. liabili ty. corded in an open account.
earest peso.
ec. 31. ez by !ec. 31.
Quijonez Fashionables Chart of Accounts Account No. Account Title 101 Cash 102 Accounts receivable 103 Allowance for doubtful accounts 104 Supplies 105 Prepaid rent 106 Merchandise inventor 10! Co"puter e#uip"ent 10$ A% & Co"puter e#uip"ent 201 Accounts paable 202 'nearned sales revenue 203 'nearned rent revenue 204 Salaries paable 205 'tilities paable 206 (nterest paable 20! )oans paable 301 *ui+one,- Capital 302 *ui+one,- %rawin.s 401 Sales revenue 402 Sales discount 403 Sales return and allowances 404 /ent inco"e 501 Purchases 502 Purchase discount 503 Purchase return and allowances 504 rei.ht in 505 Cost of .oods sold 601 Salaries epense 602 (nsurance epense 603 'tilities epense 604 Miscellaneous epense 605 (nterest epense 606 rei.ht out 60! Prepaid insurance 60$ /ent epense 60 Supplies epense 610 %epreciation epense 611 %oubtful accounts epense
Quijonez Fashionables General Journal 2014
NO.
DATE
1
Jan 1
Cash
2
Feb 2
Cash
3
Feb 3
Compu
4
Feb 4
Prepai
5
Feb 2
!uppli
6
"ar 1
Purcha #P$%$
7
"ar '
Frei,h
8
"ar -
Accou
9
"ar 11
Accou
P3$%$$
10
Apr 3$
Cash
11
"a. 2
Accou
12
"a. 2
Frei,h
13
"a. 31
nsura
14
Jun )
!ales r
15
Jun '
Cash !ales P'%$$$
16
Jun 3$
Cash
17
Jul -
Cash
18
Au, 2$
Cash Accou P3%$$
19
5ct 14
6ui7on
20
5ct 2-
Cash
21
9o 3$
:tilitie
22
Dec0 1
9o ent
23
Dec 31
"iscel
Account Title
P;
D; 12$%$$$
6ui7one8% Capital
$%$$$
ter equipment
3%$$$
Cash
rent
2'%'$$
Cash
s
2%$$$
Cash
ses
3$%$$$
Accounts pa.able $ & '$( & )( * P3$%$$$+
in
1%$$$
Cash
ts pa.able
$$
Purch0 returns and allo
ts pa.able
2-%$$
Purchase discount Cash $ / P$$ returns * P2-%$$ balance & $0-' * P2'%-1$
3%$$$
6ui7one8% Capital
ts receiable
'%$$$
!ales ;eenue
out
2$$
Cash
ce e&pense
3%$$
Cash
eturn and allo0
3$$
Accounts receiable
iscount
)%23 ))
Accounts receiable / P3$$ returns * P)%)$$ balance & $0-- * P)%23 ;ent income
1%2$$
2%$$
'%)$
:nearned sales reenue
ts receiable
2%2$
!ales reenue $ sellin, price & 2( * P'%)$ cash portion
8% Drain,
1%$$
Cash
-$%$$$
!ales reenue
s e&pense
%$$$
Cash
.
aneous e&pense Cash
3$
C; 12$%$$$
$%$$$
3%$$$
2'%'$$
2%$$$
3$%$$$
1%$$$
$$
-$ 2'%-1$
3%$$$
'%$$$
2$$
3%$$
3$$
)%)$$
1%2$$
2%$$
3%$$$
1%$$
-$%$$$
%$$$
3$
/
6ui7one8 Fashiona ADJ:!T9G E9T; December 31% 2$1
Dec 31
ntere
P$%$
Dec 31
Depre
#P3%$
Dec 31
;ent
P2'%'
Dec 31
!uppli
P2%$$
Dec 31
Prepai
P3%$ P3%$ P3$$=
Dec 31
;ent i
P1%2$
P1%2$ P1$=
Dec 31
:near
P2%$
Dec 31
!alari
P12%$
Dec 31
:tiliti
Dec 31
Doubt
"a. 2 Au, 2 Jun ) Jun ' Perce Doubt
Dec 31
Cost o Purch Purch "erch
@e,in 9et p
Total
bles E!
t e&pense nterest pa.able $ & -( & 11=12 * P4%12
iation e&pense AD / Computer equipment $$ / P$$$+=3 .ears * P1$%$$$=.ear & 11=12 * P-%1) this .
&pense Prepaid rent $=12 mos0 * P2%4$$=mo0 & 11 mos0 * P13%2$$
es e&pense !upplies per record / P$ remainin, * P1%4$ used
d insurance nsurance e&pense =12 * P3$$=per mo0 > ) mos0 * P2%1$$ required e&pense e&pense per record / P2%1$$ * P1%$$ ad7ustment o0 & mos0 remainin, li?e * P1%$$ asset portion
come :nearned rent income =' mos0 * P1$=mo0 & mos0 * P-$$ required income
income per record / P-$$ * P3$$ ad7ustment o0 & 2 mos0 remainin, li?e * P3$$ liabilit. portion
ed sales reenue !ales reenue & 4$( * P1%$$$ income earned
s e&pense !alaries pa.able $= salar. per month= 2 * P%$$$ hal? month
s e&pense :tilities pa.able
ul accounts e&pense Allo0 ?or doubt?ul accounts
sales sales #portion+ sales return #=2 sale+ ales discount #=2 sale+ ta,e e&perience ul accounts e&pense
? ,oods sold se discount se returns and allo0 andise inentor.
Frei,ht in Purchases in, inentor.
rchases Purchases Frei,ht in Purch0 discount Purch0 returns and allo oods aailable ?or sale ndin, inentor. ? ,oods sold
6ui7one8 Fashionables C<5!9G E9T;E! December 31% 2$1
4%12
Dec0 31
4%12
-%1) -%1) ar
Dec0 31
2%4$$ 2%4$$
1%4$ 1%4$
1%$$ 1%$$
Dec0 31
3$$
Dec0 31
3$$
1%$$$ 1%$$$
%$$$ %$$$
2$$ 2$$
$' $' '%$$$ 2%2$ #3$$+
#))+ 33%')3 10(
$'0$$
1)%-1$ -$ $$ 12%$$$
1%$$$ 3$%$$$ P
/
3$%$$$ 1%$$$ #-$+ #$$+
2-%-1$ 2-%-1$ #12%$$$+ P
1)%-1$
!ales reenue ;ent income
134%$$$ -$$
!ales return and allo !ales discount ncome summar.
ncome summar.
)3%41$
Cost o? ,oods sold !alaries e&pense nsurance e&pense :tilities e&pense ;ent e&pense !upplies e&pense Depreciation e&pense Doubt?ul account e&pense "iscellaneous e&pense Frei,ht out interest e&pense
ncome summar.
1%113
6ui7one8% Capital
6ui7one8% Capital 6ui8one8% Drain,
1%$$
3$$ )) 134%23
1)%-1$ %$$$ 2%1$$ %2$$ 2%4$$ 1%4$ -%1) $' 3$ 2$$ 4%12
1%113
1%$$
Quijonez Fashionables General
Cash
!e"ai# insu!an$e
1%1
120&000
36&000 2%3
2%2
50&000
28&800 2%4
4%30
3&000
2&000 2%25
6%8
7&623
1&000 3%8
6%30
1&200
28&910 3%11
7%9
2&500
200 5%26
8%20
8&750
3&600 5%31
10%29
90&000
12%31
1&500
1&500
!e"ai# !ent 2%4
28&800
1&500 10%14
28&800
5&000 11%30
2&400
26&400 12%31
350 12%31 175&713
'e!$ha#ise in(ento!) 12%31
12&000
A$$ounts !e$ei(able 5%25
8&000
300 6%7
8%20
26&250
7&700 6%8
12&000
26&250
Co*"ute! e+ui"*ent 2%3
36&000
Allo,an$e -o! #oubt-ul a$$ounts 508 12%31
36&000
508
A / Co*"ute! e+ui"*ent 9&167 12%31
u""lies 2%25
2&000 2&000
9&167 1&450 12%31
550
n$o*e
ales !e(enue 8&000 5%25 35&000 8%20
u!$hases 3%1
30&000 30&000 12%31
90&000 10%29
/
133&000 1&000 12%31
u!$hase #is$ount
134&000
590 3%11 3%11
590
ales #is$ount 6%8
/
77 u!$hase !etu!n an# allo,an$es 77
500 3%9 3%9
500
ales !etu!n an# allo,an$es 6%7
/
300 F!eiht in 300
3%8
1&000 1&000 12%31
ent in$o*e
/
1&200 6%30 12%31
300
Cost o- oo#s sol# 900
12%31
17&910
17&910
iabilities
A$$ounts "a)able 3%9 3%11
500
tilities "a)able
30&000 3%1
200 12%31
29&500 /
200
nea!ne# sales !e(enue 12%31
nte!est "a)able
2&500 7%9
4&125 12%31
1&500
4&125
1&000
nea!ne# !ent !e(enue
oans "a)able
300 12%31
50&000 2%2
300
50&000
ala!ies "a)able 6&000 12%31
6&000
"enses
ala!ies e"ense 12%31
6&000
e"!e$iation e"ense 12%31
9&167
10%14
6&000
9&167
ent e"ense 12%31
26&400
oubt-ul a$$ount e"ense 12%31
508
26&400
508
nsu!an$e e"ense 5%31
3&600
'is$ellaneous e"ense 12%31
350
1&500 12%31 2&100
u""lies e"ense 12%31
1&450
350
nte!est e"ense 12%31
1&450
tilities e"ense 11%30
5&000
12%31
200 5&200
4&125
4&125
F!eiht out 5%26
200
200
+uit)
Quijonez& Ca"ital 120&000 1%1 3&000 4%30 123&000
Quijonez& !a,ins 1&500
1&500
Quijonez Fashionables General
Cash
!e"ai# insu!an$e
1%1
120&000
36&000 2%3
2%2
50&000
28&800 2%4
4%30
3&000
2&000 2%25
6%8
7&623
1&000 3%8
6%30
1&200
28&910 3%11
7%9
2&500
200 5%26
8%20
8&750
3&600 5%31
10%29
90&000
12%31
1&500
1&500
!e"ai# !ent 2%4
28&800
1&500 10%14
28&800
5&000 11%30
2&400
26&400 12%31
350 12%31 175&713
'e!$ha#ise in(ento!) 12%31
12&000
A$$ounts !e$ei(able 5%25
8&000
300 6%7
8%20
26&250
7&700 6%8
12&000
26&250
Co*"ute! e+ui"*ent 2%3
36&000
Allo,an$e -o! #oubt-ul a$$ounts 508 12%31
36&000
508
A / Co*"ute! e+ui"*ent 9&167 12%31
u""lies 2%25
2&000 2&000
9&167 1&450 12%31
550
n$o*e
ales !e(enue 8&000 5%25 35&000 8%20
u!$hases 3%1
30&000 30&000 12%31
90&000 10%29
/
133&000 1&000 12%31 134&000 12%31
134&000
u!$hase #is$ount /
590 3%11 3%11
590
ales #is$ount 6%8
/
77
77 77 12%31
u!$hase !etu!n an# allo,an$es
/
500 3%9 3%9
500
ales !etu!n an# allo,an$es 6%7
/
300
300 300 12%31 /
F!eiht in 3%8
1&000 1&000 12%31
ent in$o*e
/
1&200 6%30 12%31
300 900
12%31
900
Cost o- oo#s sol# /
12%31
17&910
17&910 17&910 12%31 /
iabilities
A$$ounts "a)able 3%9 3%11
500
tilities "a)able
30&000 3%1
200 12%31
29&500 /
200
nea!ne# sales !e(enue
12%31
nte!est "a)able
2&500 7%9
4&125 12%31
1&500
4&125
12%31
1&000
10%14 nea!ne# !ent !e(enue
oans "a)able
300 12%31
50&000 2%2
300
50&000
ala!ies "a)able 6&000 12%31
6&000
"enses
ala!ies e"ense 12%31
6&000
e"!e$iation e"ense 12%31
9&167 12%31
6&000
9&167 6&000 12%31
9&167 12%31
/
/
ent e"ense 12%31
26&400
oubt-ul a$$ount e"ense 12%31
26&400
508
508 26&400 12%31
508 12%31
/
/
nsu!an$e e"ense 5%31
3&600
'is$ellaneous e"ense 12%31
350
1&500 12%31 2&100
350 2&100 12%31
350 12%31
/
/
u""lies e"ense 12%31
1&450
nte!est e"ense 12%31
1&450
4&125
4&125 1&450 12%31
4&125 12%31
/
/
tilities e"ense 11%30
5&000
12%31
200
F!eiht out 5%26
5&200
200
200 5&200 12%31
/
200 12%31 /
12%31
+uit)
Quijonez& Ca"ital 120&000 1%1 3&000 4%30 123&000 61&113 12%31 1&500 182&613
Quijonez& !a,ins 1&500
1&500 1&500 12%31 /
Clea!in
n$o*e u**a!) 134&523 12%31 73&410
61&113
61&113 /
6:J59EB FA!59A@
Cash Accounts receivable Supplies Prepai rent Co"puter e#uip"ent $nearne sales revenue %oans pa&able 'ui(one), Capital 'ui(one), Dra*in+s Sales revenue Sales iscount Sales return an allo*ances Rent inco"e Purchases Purchase iscount
Unadjusted Trial Balance
P
DR 175,713 26,250 2,000 2!,!00 36,000
CR
DR
2,500 50,000 123,000
P
1,450 26,400
DR 175,713 26,250 550 2,400 36,000
1,000
CR
P
1,500 1,000
134,000
77 300
77 300 1,200
300
30,000
00 30,000
50
50
500
500
1,000 3,600 5,000 350 200
-
1,000 1,500
2,100 5,200 350 200
200
50!
50!
12,000 1,500
12,000 1,500 ,167 300 6,000 200 4,125
P
310,70
1,500 50,000 123,000
1,500 133,000
Doubtul account epense
otals
CR
P
P
.rei+ht in /nsurance epense $tilities epense iscellaneous epense .rei+ht out Allo*ance or oubtul accounts erchanise inventor& Prepai insurance AD - Co"puter e#uip"ent $nearne rent revenue Salaries pa&able $tilities pa&able /nterest pa&able Cost o +oos sol Salaries epense Rent epense Supplies epense Depreciation epense /nterest epense
Proit or loss
Adjusted Trial Balance
P
Purchase return an allo*ances
otals
Adjustments
P
310,70
,167 300 6,000 200 4,125
17,10 6,000 26,400 1,450 ,167 4,125
17,10 6,000 26,400 1,450 ,167 4,125
50!
50!
P !1,650
P !1,650 -
P
32,700
P
32,700 -
Statement of Comprehensive Income DR
Statement of Financial Position
CR P
DR 175,713 26,250 550 2,400 36,000
CR
P
1,500 50,000 123,000
1,500 P P
134,000
77 300 00
Account Titles Cash Accounts receivable Allo*ance or oubtul accounts erchanise inventor& Supplies Prepai rent Prepai insurance Co"puter e#uip"ent AD - Co"puter e#uip"ent $nearne rent revenue Salaries pa&able $tilities pa&able /nterest pa&able $nearne sales revenue %oans pa&able 'ui(one), Capital Totals
2,100 5,200 350 200 50! 12,000 1,500 ,167 300 6,000 200 4,125 17,10 6,000 26,400 1450 167 4,125
50! P
73,7!7
P
134,00
P
255,13
P
61,113 P
134,00
14,! 00 61,113
P
134,00
P
255,13
P
255,13
DR P
CR
175,713 26,250 P
50!
12,000 550 2,400 1,500 36,000 ,167 300 6,000 200 4,125 1,500 50,000 1!2,613 P
!"#"
%$P
!"#"$% -
R&P'RT F'R(
)uijone* Fashiona+les Statement of Financial Position As of Decem+er %$# ,-$ ASS&TS Current assets Cash Accounts receivables, net erchanise inventor& Supplies Prepai rent Prepai insurance otal current assets Noncurrent assets Co"puter e#uip"ent, net otal noncurrent assets Total Assets 0IABI0ITI&S AND &)UIT1 0IABI0ITI&S Current lia+ilities $nearne sales revenue $nearne rent revenue Salaries pa&able $tilities pa&able /nterest pa&able otal current liabilities
ASS&TS Cur P
Non
P
P
Noncurrent lia+ilities %oans pa&able otal %iabilities &)UIT1 'ui(one), Capital Total lia+ilities and e2uit3
175,713 25,742 12,000 550 2,400 1,500 217,05 26,!33 26,!33 ""#.%/
1,500 300 6,000 200 4,125 12,125 50,000 62,125
P
1!2,613 ""#.%/ -
Tota
ACC'UNT F'R(
)uijone* Fashiona+les Statement of Financial Position As of Decem+er %$# ,-$ ent assets Cash Accounts receivables, net erchanise inventor& Supplies Prepai rent Prepai insurance otal current assets current assets Co"puter e#uip"ent, net otal noncurrent assets l Assets
P
P
175,713 25,742 12,000 550 2,400 1,500 217,05 26,!33 26,!33 ""#.%/
0IABI0ITI&S AND &)UIT1 0IABI0ITI&S Current lia+ilities $nearne sales revenue $nearne rent revenue Salaries pa&able $tilities pa&able /nterest pa&able otal current liabilities
P
Noncurrent lia+ilities %oans pa&able otal %iabilities &)UIT1 'ui(one), Capital Total lia+ilities and e2uit3
P
1,500 300 6,000 200 4,125 12,125 50,000 62,125
1!2,613 ""#.%/
Function of &-pense (ethod
)uijone* Fashiona+les Statement of Comprehensive income For the 3ear ended Decem+er %$# ,-$ SA0&S R&4&NU& ross sales revenue %ess Sales returns an allo*ances Sales iscounts 8et Sales
P
134,000 300 77 133,623
C'ST 'F 5''DS S'0D 5R'SS PR'FIT
'T6&R INC'(& Rent inco"e 5&N&RA0 AND AD(INISTRATI4& &7P&NS&S Salaries epense P /nsurance epense $tilities epense Rent epense Supplies epense Depreciation epense Doubtul account epense iscellaneous epense S&00IN5 &7P&NS&S .rei+ht out INT&R&ST &7P&NS& PR'FIT 'T6&R C'(PR&6&NSI4& INC'(& T'TA0 C'(PR&6&NSI4& INC'(&
17,10 $$!#.
%$00
6,000 2,100 5,200 26,400 1,450 ,167 50! 350
51,175
200
200 P
4,125 8$#$
%$P
9 8$#$
%$ Nature of &-pense (ethod
)uijone* Fashiona+les Statement of Comprehensive income For the 3ear ended Decem+er %$# ,-$ SA0&S R&4&NU& ross sales revenue %ess Sales returns an allo*ances Sales iscounts 8et Sales
P
300 77 133,623
'T6&R INC'(& Rent inco"e 'P&RATIN5 &7P&NS&S Cost o +oos sol Salaries epense /nsurance epense $tilities epense Rent epense Supplies epense Depreciation epense Doubtul account epense iscellaneous epense .rei+ht out /nterest epense PR'FIT 'T6&R C'(PR&6&NSI4& INC'(& T'TA0 C'(PR&6&NSI4& INC'(&
134,000
00
P
17,10 6,000 2,100 5,200 26,400 1,450 ,167 50! 350 200 4,125 P
73,410 8$#$
%$P
9 8$#$
%$
