11-ABM3

Fundamentals of Accountancy, Business and Management 1 Quarter 4 Week 5-7

Teacher:

I. WRITTEN WORK

How important is a business transaction and their analysis as apply to the accounting cycle of a
merchandising business?

As we learned, we can look how each transaction can affect the basic accounting equation and
financial statement that we will see. As I recall Identifying and analyzing transactions is the first step in
the accounting cycle. The financial effects of each transaction must be assessed. then will the data from
this transaction source have an impact on the financial statements? If the answer is yes, the business will
examine the data to see how it affects the financial accounts and by examining it the effect of it will
affect the decision making of a business.

II. PERFORMANCE TASK

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Problem 1
General Journal
Date Account Titles and Explanation Ref Dr Cr

Accounts Receivable 5,000

Sales 5,000
Sold merchandise on credit

COGS 3,500
Merchandise Inventory 3,500

Merchandise Inventory 720

Cash 720

Merchandise Inventory 2,600

Accounts Payable 2,600

Sales Return and Allowances 300

Accounts Receivable 300

Merchandise Inventory 210

COGS 210

Cash 4,850
Sales Discount 150
Accounts Receivable 5,000

Accounts Payable 600

Merchandise Inventory 600

Merchandise Inventory 200

Cash 200

Account Payable 2,000

Merchandise Inventory 20
Cash 1,980

Accounts Receivable 7,000

Sales 7,000

COGS 4,900
Merchandise Inventory 4,900

Cash 6,860

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 Sales Discount 140
Accounts Receivable 7,000

Problem 2
LEATHER PLUS
Schedule of Cost of Goods Sold
For the month ended March 31, 2016

Merchandise Inventory, Beg. 170,100

Add: Purchases 302,000
Less: Purchase Discount 1,800
Purchase Return and Allowances 4,900 (6,700)
Add: Freight -in 5,000 300,300
Cost of Goods Available for Sale 470,400
Less: Merchandise Inventory End. (165,000)
COGS ₱ 305,400
LEATHER PLUS
Income Statement
For the month ended March 31, 2016

Gross Sales 500,000

Less: Sales Discounts 7,800
Sales Return and Allowances 15,000 (22,800)
Net Sales 477,200
Less: COGS (305,400)
Gross Profit 171,800
Less: Expenses
Supplies Expense 1,200
Salaries Expense 18,000

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 Rental Expense 5,000
Delivery Expense 2,100
Utilities Expense 8,000 34,300
Net Income ₱ 137,500

Closing Entries
General Journal
Date Account Titles and Explanation Ref Dr Cr

03/31/1 Sales 500,000

6
Sales Return and Allowances 15,000
Sales Discount 7,800
Income Summary 477,200
To close nominal revenue accounts

Income Summary 334,600

Purchase Return and Allowances 4,900
Purchase Discount 1,800
Purchases 302,000
Freight-in 5,000
Supplies Expense 1,200
Salaries Expense 18,000
Rental Expense 5,000
Delivery Expense 2,100
Utilities Expense 8,000
To close nominal expense and cogs account

Merchandise Inventory, Ending 165,000

Income Summary 165,000
To set up Merchandise Inventory Ending

Income Summary 137,500

Leather Plus, Capital 137,500
To close income summary to capital

Problem 3
General Journal
Date Account Titles and Explanation Ref Dr Cr

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Sept 1 Purchases (8000*5) 40,000
Accounts Payable 40,000
Purchased merchandise on account from Machina
Corp

Cash 50,000
Notes Payable 50,000
Borrowed cash from Nation Bank

Insurance Expense 24,000

Cash 24,000
Paid insurance from the month of sept-august

Sept 2 Purchases 20,000

Cash 20,000
Purchase merchandise cash from Tiktac Corp

Sept 7 Accounts Receivable 45,000

Sales 45,000
Sold merchandise on account

Sept 10 Supplies Expense 5,600

Cash 5,600
Paid Office supplies

Sept 14 Cash 44,100

Sales Discount 900
Account Receivable 45,000
Collection of sales

Sept 15 Salaries Expense 10,000

Cash 10,000
Salaries for office staff

Sept 20 Cash 5,000

Sales 5,000
Sold merchandise on cash

Sept 30 Transportation Equipment 300,000

Cash 200,000
Accounts Payable 100,000
Purchase merchandise and paid balance payable

Adjusting Entries

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 Prepaid Expense 22,000
Insurance Expense 22,000

Interest Expense 416.67

Interest Payable 416.67
(50000*10%*1/12)

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