DR. CARLOS S.

LANTING COLLEGE
BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ABM 1
QUIZ 5

PROBLEM: COMPLETING THE ACCOUNTING CYCLE OF A MERCHANDISING BUSINESS –

PERIODIC INVENTORY SYSTEM

The trial balance of George Benta Trading, Co., a merchandising business, on January 01, 2023 is
shown below:

Account No. Accounts Debit Credit

110 Cash 280,000.00
120 Accounts Receivable 60,000.00
125 Allowance for Bad Debts
130 Merchandise Inventory 140,000.00
150 Equipment 300,000.00
155 Accumulated Depreciation 180,000.00
210 Accounts Payable 50,000.00
310 Benta, Capital 550,000.00
320 Income Summary
410 Sales
415 Sales Returns and Allowances
416 Sales Discounts
510 Purchases
515 Purchase Returns and Allowances
516 Purchase Discount
517 Freight-In
520 Salaries Expense
530 Freight-Out
540 Utilities Expense
550 Depreciation Expense
560 Bad Debt Expense
Totals 780,000.00 780,000.00

The following were the transactions during the year:

1. Purchased inventories worth 600,000 on account. Terms: 2/10, n/30. George uses the
periodic inventory system.
2. Paid freight charges amounting to 5,000 for the purchased inventories in item #1.
3. Returned purchased inventories in item #1 amounting to 10,000.
4. Sold inventories for 1,600,000 on account. Terms: 3/10, n/30.
5. Paid freight charges amounting to 4,500 for the sold inventories in item #4.
6. Returned sold inventories in item #4 amounting to 5,000.
7. Collected 1,547,150 cash for the payment of accounts receivable on item #4 within the
discount period.
8. Paid 578,200 for the payment of accounts payable on item #1 within the discount period.
9. Paid salaries expense of 820,000.
10. Paid utilities expense of 64,000.

Additional information for year-end adjustments:

a. The annual depreciation on the equipment is 30,000.
b. Accounts amounting to 3,000 are doubtful of collection.
c. Ending inventory per physical count is 180,000.
Requirements:
1. Prepare journal entries for the transactions (8pts).
2. Post the transactions to their respective ledger accounts ().
3. Prepare an adjusted trial balance.
4. Prepare a statement of cost of goods sold.
5. Prepare an income statement and balance sheet.
6. Prepare the closing entries.
7. Prepare the post-closing trial balance.

Note:
 Use the general journal for journal entries, adjusting entries, and closing entries.
 Used the general ledger for posting the transactions.
 Use the template provided for the adjusted trial balance, statement of cost of goods sold,
income statement, balance sheet, and post-closing trial balance.

Goodluck!
 George Benta Trading, Co.
Adjusted Trial Balance
Year-Ended December 31, 2023

Account No. Accounts Debit Credit

110 Cash
120 Accounts Receivable
125 Allowance for Bad Debts
130 Merchandise Inventory
150 Equipment
155 Accumulated Depreciation
210 Accounts Payable
310 Benta, Capital
320 Income Summary
410 Sales
415 Sales Returns and Allowances
416 Sales Discounts
510 Purchases
Purchase Returns and
515 Allowances
516 Purchase Discount
517 Freight-In
520 Salaries Expense
530 Freight-Out
540 Utilities Expense
550 Depreciation Expense
560 Bad Debt Expense
Totals

George Benta Trading, Co.

Statement of Cost of Goods Sold
Year-Ended December 31, 2023

Beginning Inventory
Purchases
Freight-In
Purchase Returns and Allowances
Purchase Discounts
Net Purchases
Total Goods Available for Sale
Ending Inventory
Cost of Goods Sold

George Benta Trading, Co.

 Income Statement
Year-Ended December 31, 2023

Sales
Sales Returns and Allowances
Sales Discounts
Net Sales
Cost of Goods Sold
Gross Profit

Salaries Expense
Freight-Out
Utilities Expense
Depreciation Expense
Bad Debt Expense
Total Operating Expenses
Net Income

George Benta Trading, Co.

Balance Sheet
Year-Ended December 31, 2023

Account No. Accounts Debit Credit

110 Cash
120 Accounts Receivable
125 Allowance for Bad Debts
130 Merchandise Inventory
150 Equipment
155 Accumulated Depreciation
210 Accounts Payable
310 Benta, Capital
320 Income Summary
410 Sales
415 Sales Returns and Allowances
416 Sales Discounts
510 Purchases
Purchase Returns and
515 Allowances
516 Purchase Discount
517 Freight-In
520 Salaries Expense
530 Freight-Out
540 Utilities Expense
550 Depreciation Expense
560 Bad Debt Expense
Totals

George Benta Trading, Co.

Post-Closing Trial Balance
 Year-Ended December 31, 2023

Account No. Accounts Debit Credit

110 Cash
120 Accounts Receivable
125 Allowance for Bad Debts
130 Merchandise Inventory
150 Equipment
155 Accumulated Depreciation
210 Accounts Payable
310 Benta, Capital
320 Income Summary
410 Sales
415 Sales Returns and Allowances
416 Sales Discounts
510 Purchases
Purchase Returns and
515 Allowances
516 Purchase Discount
517 Freight-In
520 Salaries Expense
530 Freight-Out
540 Utilities Expense
550 Depreciation Expense
560 Bad Debt Expense
Totals