FDNACCT WRITTEN GROUP CASE ANALYSIS [10% of final grade]

Term 1, Academic Year 2018-2019

Adapted from: Warren, C.S., Reeve, J.M., & Duchac, J.E. (2018). Accounting (27th ed.). Boston, MA: Cengage Learning.

PAZKOH COMPANY is a merchandising business that uses the periodic inventory system. The account
balances for PAZKOH as of December 1, 2018 (unless otherwise indicated), are as follows:

Account No. Account Title Debit Credit

110 Cash ₱ 480,600
112 Accounts Receivable 223,900
113 Allowance for Doubtful Accounts ₱ 0
115 Merchandise Inventory 326,800
117 Prepaid Insurance Expense 120,000
118 Store Supplies 21,700
123 Store Furniture and Equipment 567,000
124 Accumulated Depreciation – Store Furniture 56,700
and Equipment
210 Accounts Payable 96,600
212 Salaries Payable 0
221 Unearned Sales Revenue 139,000
310 Paz Koh, Capital, January 1, 2018 885,300
311 Paz Koh, Drawing 135,000
410 Sales 4,440,400
411 Sales Returns and Allowances 22,000
412 Sales Discount 26,000
510 Purchases 2,323,000
511 Purchase Returns and Allowances 10,000
512 Purchase Discount 50,000
514 Freight-in 7,000
520 Sales Salaries Expense 622,800
521 Advertising Expense 101,000
522 Depreciation Expense – Store Furniture and 0
Equipment
523 Store Supplies Expense 0
524 Freight-out 15,000
529 Miscellaneous Distribution Costs 12,600
530 Office Salaries Expense 387,100
531 Rent Expense 165,000
532 Utilities Expense 113,700
533 Insurance Expense 0
534 Doubtful Accounts Expense 0
539 Miscellaneous Administrative Expenses 7,800
699 Income Summary 0
TOTAL ₱5,678,000 ₱5,678,000
During December, the last month of the accounting period, the following transactions were completed:

Date Transaction
Dec 1 Paid rent for December, ₱15,000
3 Purchased merchandise from Rein Company, on terms 2/10, n/30, ₱36,000
4 Paid freight on December 3 purchase, ₱1,200
5 Returned damaged merchandise purchased on December 3, receiving a credit memo from
Rein Company for ₱3,000
6 Sold merchandise to Santa Company on terms 2/10, n/30, ₱68,500
6 Paid freight on merchandise sold to Santa Company, ₱800
8 Received ₱22,300 cash from customer Noel as payment for his outstanding November
account balance
10 Sold merchandise for cash, ₱54,000
13 Paid merchandise purchased on December 3, less return of December 5
16 Received cash from December 6 sale
19 Purchased merchandise for cash, ₱18,700
20 Paid outstanding account balance with supplier Belen, ₱33,450
28 Paid sales salaries of ₱70,000 and office salaries of ₱46,000
29 Paid utilities for December, ₱10,200

Adjustments data:
1. Accrued salaries on December 31, 2018 are as follows: ₱56,000 for sales salaries and ₱39,000 for
office salaries.
2. Of the reported Prepaid Insurance Expense, ₱30,000 had expired as at December 31, 2018.
3. Store supplies on hand on December 31, 2018 amounted to ₱4,000.
4. The reported Unearned Sales Revenue account included ₱40,000 worth of inventory delivered
last December 31.
5. Store furniture and equipment are estimated to have 15-year useful life with no salvage value.
6. Doubtful accounts are estimated at 10% of outstanding accounts receivable.
7. Merchandise inventory at end of 2018, based on physical count, is ₱370,000.

INSTRUCTIONS:
1. Form a group composed of four members (three or five members if everyone else has a groupmate).

2. Your group is tasked to do the following for Pazkoh Company:

a) Set-up the accounts and enter the balances of each in the general ledger. Unless otherwise
instructed, you may utilize one-half page of the general ledger for each account. There is no
need to set-up subsidiary ledgers.
b) Journalize the transactions for the month of December 2018 using a 10-column worksheet which
serves as your general journal (Start with left side of Worksheet#1 and continue with the right
side if more space is needed).
c) Post the additional transactions to the general ledger. Remember to complete the posting
reference columns in the worksheet and the ledger.
d) Prepare an unadjusted trial balance as of December 31, 2018 (left side of Worksheet#2).
e) Based on adjustments data, journalize the adjusting entries (Continue with right side of
Worksheet#1).
f) Post the adjusting entries to the general ledger. Remember to complete the posting reference
columns in the worksheet and the ledger.
 g) Prepare an adjusted trial balance as of December 31, 2018 (right side of Worksheet#2).
[NOTE]: Students may alternatively prepare a 10-column work sheet in lieu of requirements d
and g ONLY (Worksheet#2).
h) Prepare a functional-form Income Statement for the year ended December 31, 2018 (left side of
Worksheet#3).
i) Prepare a Statement of Changes in Equity for the year ended December 31, 2018 (Skip three
lines after Income Statement).
j) Prepare a report-form Statement of Financial Position as at December 31, 2018 (right side of
Worksheet#3).
k) Prepare all supporting notes to financial statements (Start with left side of Worksheet#4 and
continue with right side if more space is needed).
l) Journalize the closing entries (Start with left side of Worksheet#5).
m) Post the closing entries to the general ledger. Remember to complete the posting reference
columns in the worksheet and the ledger. Determine the balance of each account.
n) Prepare a Post-Closing Trial Balance as at December 31, 2018 (Start/Continue with right side of
Worksheet#4).
o) Journalize reversing entries (Continue with Worksheet#5).
p) Post the reversing entries to the general ledger. Remember to complete the posting reference
columns in the worksheet and the ledger.

3. Submit your group’s case analysis (general ledgers and worksheets) to your professor on the following
dates:
 TH schedule: December 6, 2018 (Thursday)
 WF schedule: December 7, 2018 (Friday)

4. The criteria for grading the case analysis are as follows:

Criteria Exemplary Satisfactory Developing Beginning

(97-100) (80-96) (70-79) (Below 70)
Content and The group applies The group applies The group applies The group fails to
Application all relevant some FDNACCT few FDNACCT topics apply FDNACCT
[80%] FDNACCT topics topics appropriately appropriately topics
appropriately to the appropriately
business case.
Format and The group follows The group follows The group follows The group does not
Use of English the format and has the format and uses the format but uses follow format and
Language not one spelling/ only the English a mixture of Filipino uses a mixture of
[10%] grammatical error in language in the and English Filipino and English
the paper. paper which is at an language in the language in the
acceptable level. paper and/or uses paper and/or uses
the English the English
language somewhat language
inappropriately. inappropriately.
Teamwork The group shows The group shows The group shows The group shows
[10%] strong teamwork as teamwork as somewhat a lack of lack of teamwork as
evidenced in the evidenced in the teamwork as evidenced in the
oneness and consistency in terms evidenced in some inconsistencies both
consistency both in of content of the inconsistencies both in the flow and
the flow and paper in the flow and contents of the
contents of the contents of the paper
paper paper