Comprehensive problem

The December 31, 2018 post closing trial balance for the Richelle Faith Company follws:

Richelle Faith Company

Post-closing Trial Balance

December 31, 2018

Debit Credit

110 Cash 240,000

120 Accounts receivable 210,000

130 Merchandise Inventory 730,000

140 Prepaid rent 90,000

150 Office supplies 160,000

160 Office equipment 1,000,000

165 Accumulated depreciation 250,000

210 Notes payable 400,000

220 Accounts payable 130,000

230 Salaries Payable

310 Richelle Faith, Capital 1,650,000

320 Richelle Faith, Drawings

330 Income Summary

410 Sales

420 Sales returns nd allowances

430 Sales discounts

510 Purchases

520 Purchase returns and allowances

530 Purchase discounts

540 Transportation in

610 Salaries expense

620 Rent expense

630 Office supplies expense

640 Depreciation expense

650 Interest expense __________________________________________

2,430,000 2,430,000

Accounts receivable of 210,000 is related to a sale to R. Loyola on December 28,2018. All credit sales
are 2/10, n/30. The accounts payable balance of 130,000 is attributable to a purchase on Dec. 29,2018
from E. Samonte. All credit purchases are 3/10,n/30.

Assume that amounts of purchases and sales are VAT inclusive of 12%.

During the month of January 2019, the following transactions were completed:

Jan. 2 Sold merchandise on credit to B. Bandonell, 240,000. Invoice no. 316.

3 Purchased merchandise on account from T. Arenas Company, 90,000. Invoice dated Jan. 2.

4 Collected amount due from Dec. 28, sale to R.Loyola less discounts.

5 Sold merchandise for cash, 430,000.

7 Paid amount due to E. Samonte Company for the purchase of Dec. 29,2018 less discounts.
Issued check no. 83.

8 Sold merchandise on account to G. Sevidal, 310,000. Invoice no. 317.

9 Returned merchandise purchased from T. Arenas Company, 10,000.

10 Collected amount due from B. Bandonell less discounts.

11 Purchased merchandise on account from L. Viray 120,000. Invoice dated January 10.

11 Paid T. Arenas Company amount due less returns and discounts. Issued check no. 84.

12 Purchased merchandise for cash 70,000. Issued check no.85.

13 Sold merchandise on account to M. Cerda, 130,000. Invoice no. 318.

14 Paid interest on the note payable, 10,000. Issued check no.86.

15 Paid salaries, 80,000. Issued check no. 87.

17 Purchased merchandise on account from E. Samonte Company, 190,000. Invoice dated January
14.

18 Sold merchandise on account to R. Loyola, 460,000. Invoice no. 319.

19 Richelle Faith withdrew 100,000 from the business. Issued check no. 88.

21 Acquired office supplies for cash, 40,000. Issued check no. 89.
 22 Paid freight charges on the merchandise purchased from E. Samonte Company on Jan. 17,
20,000. Issued check no. 90.

22 Collected amount due from M. Cerda less discounts.

23 Sold merchandise on credit to B. Bandonell, 110,000. Invoice no. 320.

24 Received returned merchandise from G. Sevidal, 30,000.

25 Received amount due from G. Sevidal on the sale of Jan. 8 less returns.

25 Purchased merchandise on account from A. Braganza Company, 340,000. Invoice dated Jan. 24.

26 Paid 90,000 to E. Samonte Company in partial payment of account. Issued check no. 91.

27 Received 170,000 loan from the First Morayta Bank and issued a note payable.

28 Purchased merchandise on account from L. Viray, 270,000. Invoice dated Jan. 27.

29 Sold merchandise on account to M. Cerda, 170,000. Invoice no. 321.

30 Purchased merchandise on account from T. Arenas Company 360,000. Invoice dated Jan. 29.

30 Sold merchandise for cash, 1, 310,000.

Required:

1. Enter the December 31, 2018 post-closing trial balance amounts in the general and subsidiary
ledgers.
2. Record the transactions for the month of January using special journals.
3. Total the journals and post to the general and subsidiary ledger accounts. Use the following
journal page numbers:
Sales journal 16
Purchases Journal 25
Cash receipts journal 35
Cash payments Journal 43
General Journal 13

4. Determine the balance in each account and prepare the unadjusted trial balance in the
worksheet.
5. Prepare the following adjusting entries in the worksheet:
a. Prepaid rent of 30,000 has expired.
b. Office supplies at month-end amounted to 70,000.
c. Monthly depreciation on the office equipment amounted to 10,000.
d. Salaries of 90,000 have accrued.

6. Complete the worksheet. The ending inventory amounted to 470,000.

7. Prepare the financial statements.
8. Record the adjusting and closing entries in the general journal. Post entries to the general
ledger.
9. Prepare schedules of accounts receivable and accounts payable.