LESSON 9

POSTING AND TRIAL BALANCE FOR MERCHANDISING BUSINESS

POSTING

- This is the process of transferring entries of the accounts in the journal to individual
ledger accounts.
- The process is the same as we do in service business.

Example:
Journal entry:

Page1
Date Account Titles and Explanation F Debit Credit
2020
Jan. 1 Cash 101 P 60,000
Furniture and Fixtures 107 50,000
Store Equipment 108 40,000
Merchandise Inventory 103 100,000
Mr. J. Tan, Capital 301 P 250,000
Initial investment of the owner

LEDGER:

Page number Page number

Account 10 CASH Account 10 FURNITURE AND FIXTURES
1 7
DATE ITEM REF DEBIT CREDI BALANCE DATE ITEM REF DEBIT CREDI BALANCE
T DEBIT CREDIT T DEBIT CREDIT
Jan 1 investment J1 60,000 60,000 Jan 1 investment J1 50,000 50,000

Page number Page number

Account 10 STORE EQUIPMENT Account 10 MERCHANDISE INVENTORY
8 3
DATE ITEM REF DEBIT CREDI BALANCE DATE ITEM RE DEBIT CREDI BALANCE
T DEBIT CREDIT F T DEBIT CREDI
Jan 1 investment 40,000 40,000 T
Ja 1 investmen 100,00 100,00
n t 0 0

Page number
Account 30 MR. J.TAN, CAPITAL
1
DATE ITEM RE DEBIT CREDI BALANCE
F T DEBIT CREDI
T
Ju 1 investmen 250,00 250,00
n t 0 0
Fundamentals of ABM 2 C.M. Viray
 TRIAL BALANCE

- Contains all open balances of the accounts

- After entries from the journal has been transferred to ledgers all balances will be
forwarded to trial balance, the total debit balances must be equal to credit balances
- There are two types of trial balance, trial balance of totals and trial balance of balances
- For convenience we will use trial balance of balances

SAMPLE: LEDGER- PERIODIC

(data taken from the sample given to journalizing periodic and perpetual of Lim Merchandising)

Page number
Account 101 CASH Page number
DATE ITEM REF DEBIT CREDI BALANCE Account 10 ACCOUNTS RECEIVABLE
T DEBIT CREDIT 5
Jun 1 investment GJ1 40,000 40,000
DATE ITEM REF DEBIT CREDI BALANCE
2 equipment 11,000 29,000
T DEBIT CREDIT
3 supplies 900 28,100 Jun 4 W.Navarro 21,000 21,000
4 freight 300 27800 11 W.Navarro 21,000 0
6 ABC GJ2 20,874 6,926 30 15,000 15,000
n/30
11 W.Navarro 20,580 27,506
13 merchandise 10,000 17,506
15 salary 2,500 15,006
16 loan 50,000 65,006
17 refund 400 65,406
18 freight GJ3 500 64,906
Page number
20 sales 25,000 89,906
Account 11 MERCHANDISE INVENTORY
25 merchandise 17,000 72,906
5
27 Ocean Pacific 10,000 62,906
DATE ITEM REF DEBIT CREDI BALANCE
28 drawing 2,000 60,906
T DEBIT CREDIT
29 refund 1,500 59,406
Jun 30 ending 15,000 15,000
30 opex GJ4 7,200 52,206

Page number
Account 150 EQUIPMENT
DATE ITEM REF DEBIT CREDIT BALANCE
DEBIT CREDIT
Jun 2 purchase GJ1 11,000 11,000

Page number
Account 120 SUPPLIES
DATE ITEM REF DEBI CREDIT BALANCE
T DEBIT CREDIT
Jun 3 purchases 900 900
Fundamentals of ABM 2 C.M. Viray
 Page number Page number
Account 201 ACCOUNTS PAYABLE Account 20 NOTES PAYABLE
DATE ITEM REF DEBIT CREDIT BALANCE 2
DEBI CREDIT DATE ITEM REF DEBIT CREDI BALANCE
T T DEBIT CREDIT
Jun 2 ABC 22,000 22,000
Jun 18 loan 50,000 50,000
5 returns 700 21,300

6 ABC 21,300 0
18 Ocean Pacific 14,000 14,000
27 Ocean Pacific 10,000 4,000

Page number
Page number Accoun 302 LIM, DRAWING
Accoun 301 LIM, CAPITAL t
t DATE ITEM REF DEBI CREDIT BALANCE
DATE ITEM REF DEBI CREDIT BALANCE T DEBIT CREDIT
T DEBIT CREDIT Jun 28 cash 2,000 2,000
Jun 1 investment 40,000 40,000

Page number
Page number Account 40 SALES RETURNS AND
Accoun 401 SALES 5 ALLOWANCES
t DATE ITEM REF DEBIT CREDI BALANCE
DATE ITEM REF DEBI CREDIT BALANCE T DEBIT CREDIT
T DEBIT CREDIT Jun 29 Cash 1,500 1,500
Jun 4 W.Navarro 21,000 21,000 customer

20 Cash 25,000 46,000

Page number
30 n/30 15,000 61,000
Account 54 UTILITIES
0
DATE ITEM REF DEBIT CREDI BALANCE
T DEBIT CREDIT
Jun 30 1,200 1,200
Page number Page number
Account 50 PURCHASES Account 41 SALES DISCOUNTS
1 0
Page number
DATE ITEM REF DEBIT CREDIT BALANCE DATE ITEM REF DEBIT CREDIT BALANCE
Account 50 PURCHASE RETURNS AND Page number
DEBIT CREDIT DEBIT CREDIT
Jun 2 ABC
2 22,000
ALLOWANCES
22,000
Page
Jun number
Account
11 W.Navarro 53 420 SALARIES
420
DATE
13 cash
ITEM REF DEBIT
10,000
CREDI BALANCE
32,000
Account 50
0 ADVERTISING EXPENSE
18 Ocean P. 14,000
T DEBIT CREDIT
46,000
DATE ITEM 3REF DEBIT CREDI BALANCE
Jun 5 ABC
25 cash Fundamentals
700 700 DATE ITEM REF DEBIT CREDI T BALANCE
DEBIT CREDIT
of ABM
17,000 2 63,000 C.M. Viray
17 400 1,100 Jun 15 2,500 T DEBIT CREDIT
2,500
Jun 3030 Month end 1,500
2,500 1,500
5,000
Page number
Account 51 RENT EXPENSE
LIM MERCHANDISING
0
TRIAL BALANCE
DATE ITEM REF DEBIT CREDI BALANCE
JUNE 30, 2016
T DEBIT CREDIT
Jun 30
ACCOUNT TITLES
2,000 2,000
DR CR
Cash P52,206

Accounts Receivable 15,000

Supplies Page
900 number

Equipment 11,000 Account 50 PURCHASE DISCOUNTS

Accounts Payable P 4,000 3
Page number Notes Payable DATE ITEM
50,000 REF DEBIT CREDI BALANCE
AccountLim,506 capital, FREIGHT-OUT 40,000 T DEBIT CREDIT
DATE ITEM Lim, REF DEBI CREDIT
drawing BALANCE Jun
2,000 6 ABC 426 426

Sales T DEBI CREDIT 61,000

T
Sales Returns and Allowances 1,500
Jun 4 w.navarro 300 300 420
Sales discounts
Purchases 63,000

Purchase Returns and Allowances 1,100

Purchase discounts 426

Freight-In 500

Freight-out 300

Advertising 1,500

Rent 2,000

Salaries 5,000

Utilities 1,200
SAMPLE: TRIAL BALANCE -
P156,526 P156,526
PERIODIC
Page number
Account 50 FREIGHT-IN
4
DATE ITEM REF DEBIT Taken from theBALANCE
CREDI balance of CASH
T ledger
DEBIT CREDIT
Jun 18 Ocean 500 500

Fundamentals of ABM 2 C.M. Viray

 Total debits must be
equal to total credits

*****same procedures are applicable to Perpetual in preparing ledger and trial balance

Page number SAMPLE LEDGER- PERPETUAL

Account 10 CASH
1
DATE ITEM REF DEBIT CREDIT BALANCE Page number
DEBIT CREDIT Account 120 SUPPLIES
Jun 1 investment GJ1 40,000 40,000
DATE ITEM REF DEBIT CREDIT BALANCE
2 equipment 11,000 29,000
DEBIT CREDIT
3 supplies 900 28,100 Jun 3 purchases 900 900
4 freight 300 27800
6 ABC GJ2 20,874 6,926
11 W.Navarro 20,580 27,506
13 merchandise 10,000 17,506
15 salary 2,500 15,006
16 loan 50,000 65,006
17 refund 400 65,406
18 freight GJ3 500 64,906
20 sales 25,000 89,906
25 merchandise 17,000 72,906 Page number
27 Ocean Pacific 10,000 62,906 Account 150 EQUIPMENT
28 drawing 2,000 60,906 DATE ITEM REF DEBIT CREDIT BALANCE
29
Fundamentals of ABM 21,500
refund 59,406
C.M.DEBIT
Viray CREDIT
30 7,200 52,206 Jun 2 purchase GJ1 11,000 11,000
opex GJ4
 Page number
Account 11 MERCHANDISE INVENTORY
5
DATE ITEM REF DEBIT CREDI BALANCE
T DEBIT CREDIT
Jun 2 purchases 22,000 22,000
4 sales 15000 7,000
5 return 700 6,300
6 discount 426 5,874
13 purchases 10,000 15,874
17 refund 400 15,474
18 purchases 14,000 29,474
18 freight 500 29,974
20 sales 15,000 1 4,974
25 purchases 17,000 31,974
30 sales 10,000 21,974

Page number Page number

Account 201 ACCOUNTS PAYABLE Account 20 NOTES PAYABLE
DATE ITEM REF DEBIT CREDIT BALANCE 2
DEBI CREDIT DATE ITEM REF DEBIT CREDI BALANCE
T T DEBIT CREDIT
Jun 2 ABC 22,000 22,000
Jun 18 loan 50,000 50,000
5 returns 700 21,300

6 ABC 21,300 0
18 Ocean Pacific 14,000 14,000
27 Ocean Pacific 10,000 4,000

Page number
Page number
Accoun 302 LIM, DRAWING
Accoun 301 LIM, CAPITAL t
t
DATE ITEM REF DEBI CREDIT BALANCE
DATE ITEM REF DEBI CREDIT BALANCE T DEBIT CREDIT
T DEBIT CREDIT
Jun 28 cash 2,000 2,000
Jun 1 investment 40,000 40,000

Page number
Accoun 401 SALES
t
Page number
DATE ITEM REF DEBI CREDIT BALANCE
T Account 40 SALES RETURNS AND
DEBIT CREDIT
Jun 4 W.Navarro 21,000 21,000 5 ALLOWANCES
20
Fundamentals of ABM 225,000
Cash 46,000 DATE ITEM REF DEBIT CREDI C.M. Viray
BALANCE
30 n/30 15,000 61,000 T DEBIT CREDIT
Jun 29 Cash 1,500 1,500
customer
 Page number
Account 41 SALES DISCOUNTS
0
DATE ITEM REF DEBIT CREDIT BALANCE
DEBIT CREDIT
Jun 11 W.Navarro 420 420

Page number
Account 50 COST OF GOODS SOLD
1
DATE ITEM REF DEBIT CREDIT BALANCE
DEBIT CREDIT
Jun 4 W.Navarro 15,000 15,000
20 Cash sales 15,000 30,000
30 10,000 40,000

Page number Page number

Accoun 50 ADVERTISING EXPENSE Accoun 50 FREIGHT-OUT
t 3 t 6
DATE ITEM RE DEBI CREDI BALANCE DATE ITEM REF DEBI CREDI BALANCE
F T T DEBI CREDI T T DEBI CREDI
T T T T
Ju 3 Month 1,500 1,500 Ju 4 w.navarro 300 300
n 0 end n

Page number Page number

Accoun 51 RENT EXPENSE Accoun 53 SALARIES
t 0 t 0
DATE ITEM
Page number RE DEBI CREDI BALANCE DATE ITEM RE DEBI CREDI BALANCE
Account F54 T T UTILITIES
DEBI CREDI F T T DEBI CREDI
0 T T T T
Ju DATE
3 ITEM 2,000
REF DEBIT CREDI 2,000 BALANCE Ju 1 2,500 2,500
n 0 n 5
T DEBIT CREDIT 3 2,500 5,000
Jun 30 1,200 1,200 0

Fundamentals of ABM 2 C.M. Viray

TRIAL BALANCE - PERPETUAL

LIM MERCHANDISING
TRIAL BALANCE
JUNE 30, 2016
ACCOUNT TITLES DR CR
Cash P52,206

Accounts Receivable 15,000

Merchandise Inventory 21,974

Supplies 900

Equipment 11,000

Accounts Payable P 4,000

Notes Payable 50,000

Lim, capital, 40,000

Lim, drawing 2,000

Sales 61,000

Sales Returns and Allowances 1,500

Sales discounts 420

Cost of goods sold 40,000

Freight-out 300

Advertising 1,500

Rent 2,000

Salaries 5,000

Utilities 1,200

P155,000 P155,000

Fundamentals of ABM 2 C.M. Viray

EXERCISE 1

JOURNALIZE, POST AND MAKE A TRIAL BALANCE FOR THE FOLLOWING:

Below are the transactions of Bing Trading for the month of December 2019

Dec. 1- A. Cruz, owner, invested P 100,000 cash, merchandise P 200,000 and store equipment
P86,000.
2- Sold P 22,000 goods to Bonet Store. Cost P 12,000. Terms 2/10, n/30
3 – Sold for cash P45,000 goods. Cost, P32,000.
4 – Purchased P 18,000 goods and paid freight P500.
6- Bonet Store paid its account in full.
10 – Purchased from ABC Trading P30,000 goods. Terms 2/10, n/30. Paid freight P700.
15- Paid the salary of the helper P6,000.
16 – Bought furniture on account, P 10,000.
17- Purchase supplies P3,500.
18 – Returned defective merchandise to ABC Trading 250.
20 – Paid ABC Trading in full.
25- Borrowed money from the bank P 15,000.
27.- A. Cruz withdrew P5,000.
28 – Sold goods for cash P 50,000, cost P45,000,
30 – Paid Utilities P5,000.

Fundamentals of ABM 2 C.M. Viray

Fundamentals of ABM 2 C.M. Viray