Case Problem 1 (King Distributors) Chart of Accounts for Journalizing, Posting and

Trial Balance
June 1 The business, King
Distributors was registered as a single ASSETS
100 Cash
proprietorship with the department of Trade
101 Accounts Receivable
and Industry, John King invested P39, 000. 102 Merchandise Inventory
2 Bought computer equipment for 103 Supplies
P10, 000 cash.
2 Bought merchandise on account, 110 Office Equipment
from Paris Supply Corp. P15, 900 terms 2/10,
n/30. LIABILITIES
3 Bought office supplies on cash 120 Accounts Payable
basis for P700. 125 Notes Payable
4 Sold merchandise on account
P15, 200, FOB Destination, terms 2/10, n/30. OWNER’S EQUITY
The cost of merchandise sold was 12,200. 130 King, Capital
131 King, Drawing
5 Paid 200 freight on June 4 sale.
6 Received credit from Paris
REVENUE
Supply Corp. for merchandise returned P300. 140 Sales
11 Paid the Paris Supply Corp. 141 Sales Returns and Allow.
13 Collected from June 4 customers. 142 Sales Discounts
14 Bought merchandise on cash
basis for P14, 400. COST AND EXPENSES
15 Salaries paid P1,500. 150 Purchases
16 Borrowed money from 151 Purchase Returns and Allow.
Metrobank, signed a promissory note for 152 Purchase Discounts
P12, 000. 153 Freight In
17 Received refund from supplies on 160 Advertising
161 Freight Out
cash purchases on June 14, amounting P500.
162 Rent Expense
18 Bought merchandise from 163 Salaries
SAVEMORE, P14, 200, FOB Shipping Point, 164 Utilities
terms: 2/10, n/30. 170 Income Summary
20 Paid freight on June 18 purchase
P700.
23 Sold merchandise for P16, 400.
The merchandise sold, amounting P10, 500.
26 Bought merchandise for cash
P12, 300.
27 Paid SAVEMORE on the June 18 TRIAL BALANCE FORMAT – Illustration 1
purchase, P9, 000. No discount allowed on
partial payment.
The heading:
28 John King got cash from the
business, P2, 008. Name of the Company
29 Made refund to cash customers Trial Balance
for defective merchandise, P900. Month Day Year
30 Sold merchandise on account
P13, 700, n/30. Cost of merchandise sold is Account No. Account Title Debit Credit
P11,000. 1 Cash Pxx
2 AR xx
-Paid the following: 3 Inventory xx
Advertising P1, 000 4 AP Pxx
Utilities 400 5 Capital xx
Rent 3, 500 6 Sales
Salaries 1, 500 7 Purchases xx
8 Expenses xx ___
The merchandise inventory is amounted to TOTAL Pxx Pxx
P25, 000.
FINANCIAL STATEMENTS PREPARATION 4. STATEMENT OF FINANCIAL
FORMAT – Illustration 2 POSITION

1. STATEMENT OF COST OF GOODS The heading:

SOLD Name of the Company
Statement of Financial Position
The heading: As of Month Day Year

Name of the Company ASSETS

Statement of Cost of Goods Sold CURRENT ASSETS Pxx
For the month ended Month Day Year Cash & Cash Equivalents xx
Receivables xx
Purchases Pxx Inventories xx
Less: Purchase Returns & Allow. Pxx Prepaid Expenses xx
Purchase Discounts xx xx Total Current Assets xx
Net Purchases xx NON CURRENT ASSETS
Add: Freight In xx Property, Plant & Equipment xx
Goods Available for Sale xx TOTAL ASSETS Pxx
Less: Inventory End xx
Cost of Goods Sold Pxx LIABILITIES & OWNER’S EQUITY
LIABILITIES
CURRENT LIABILITIES
2. STATEMENT OF FINANCIAL Accounts Payable Pxx
PERFORMANCE NON-CURRENT LIABILITIES
Notes Payable xx
The heading: TOTAL LIABILITIES xx

Name of the Company OWNER’S EQUITY

Statement of Financial Performance King, Capital xx
For the month ended Month Day Year TOTAL LIABILITIES & Pxx
OWNER’s EQUITY
Sales Pxx
Less: Sales Returns & Allow. Pxx Note: In preparing the financial statements
Sales Discounts xx xx always follow the format. In preparing the
Net Sales xx statement of the financial position the format
Less: Cost of Goods Sold xx will follow the basic accounting equation.
Gross Profit xx
Less: Operating Expenses 5. STATEMENT OF CASH FLOWS
Advertising Pxx
Freight Out xx The heading:
Rent xx Name of the Company
Salaries xx xx Statement of Cash Flows
Net Profit Pxx For the month ended Month Day Year

Cash Flow from Operating Activities

3. STATEMENT OF CHANGES IN Cash received from sales Pxx
OWNER’S EQUITY Cash received from collections xx
Cash refund from purchases xx
The heading: Payment for supplies (xx)
Payment for freight on sales (xx)
Name of the Company Purchased goods (xx)
Statement of Changes in Owner’s Equity Payment for freight on purchase (xx)
For the month ended Month Day Year Cash refund to customers (xx)
Payment for Operating Expenses (xx)
King, Capital- Beginning Pxx Net Cash flow from Operating Activities P(xx)
Add: Net Profit xx Cash Flow from Investing Activities
Total xx Purchase equipment P(xx)
Less: King, Drawing xx Net Cash Flow from Investing Activities P(xx)
King, Capital- Ending Pxx Cash Flow from Financing Activities
Investment by the owner Pxx
Cash borrowed by the owner xx
Payment of withdrawal by owner (xx)
Net Cash Flow from Financing activities Pxx
Increase in Cash Pxx