Sample Transactions for Merchandising

COCO COMPUTER STORE

PERPETUAL INVENTORY SYSTEM
Dec. 2015
1 Coco Martin transferred his personal savings to his new business named 'COCO Computer Store
amounting to P600,000.
3 He acquired the following: Computer-P90,000, 60% down payment, issued notes for the
balance; Supplies 10,000, 80% down payment, balance is on credit.
4 Paid the premium for insurance for five months, P20,000.
5 Purchased merchandise on account from LM Company, P170,000. Term 10% down payment,
2/10, n/30.
6 Bought on account additional goods for resale from AZ Corporation, P165,000.
7 COCO Store made returns to LM Company due to defects, P15,000.
8 Returned goods to AZ Corporation, P4,000.00
9 The store paid partial to LM Company, P50,000.
11 Paid P80,000 as partial payment to AZ Corporation.
14 Paid in partial the note due for the computer purchased, P5,000.
15 Paid the following for the month; Salaries- 12,000; Rent-2,500; Utilities- 3,100; and
Communication 1,800.
17 Sold merchandise to Pyolo Pasko, P140,000 with a cost of 84,000. . Term: 40% downpayment,
2/15, 1/20, n/30
18 Customer QQ bought merchandise for total sales value of P50,000 cash. It has a cost of sale of
30,000.
19 Various customers purchased in cash computer items amounting to P15,000 with a cost of
9,000.
21 Pyolo returned some merchandise due to error on specifications of the items, 5,000. It has a
cost of sale of 3,000.
22 Paid repairs of the service vehicle of the business P4,600.
23 Paid LM Company 50% of the account balance
24 Mr. Martin withdrew cash from the business for personal use, 6,100.
27 Pyolo paid 10,000 as partial payment for his purchases.
a. Account Titles

COCO COMPUTER STORE

PERPETUAL INVENTORY SYSTEM

ACCOUNT NOS. ACCOUNT TITLES

110 Cash
120 Accounts Receivable
130 Office Supplies
140 Merchandise Inventory
150 Prepaid Insurance
160 Office Equipment
210 Notes Payable
220 Accounts Payable
310 C. Martin, Capital
320 C. Martin, Drawing
410 Sales
420 Sales Returns and Allowances
510 Cost of Sales
610 Repair Service Expense
620 Salaries Expense
630 Utilities Expense
640 Rent Expense
650 Communication/Telephone Expense
710 Income and Loss Summary
b. Journal Entries
COCO COMPUTER STORE
PERPETUAL INVENTORY SYSTEM Page GJ1
GENERAL JOURNAL
Date Account Titles and Explanation F Debit Credit
2015
Dec 1 Cash 110 600,000.00
C. Martin Capital 310 600,000.00
To record the initial investment of C. Martin

3 Office Equipment 160 90,000.00

Cash 110 54,000.00
Notes Payable 210 36,000.00
To record the equipment bought on cash and on account.

Office Supplies 130 10,000.00

Cash 110 8,000.00
Accounts Payable 220 2,000.00
To record the supplies acquired on cash and on account.

4 Prepaid Insurance 150 20,000.00

Cash 110 20,000.00
To record the payment for insurance.

5 Merchandise Inventory 140 170,000.00

Cash 110 17,000.00
Accounts Payable 220 153,000.00
To record the purchased made on cash and on account

6 Merchandise Inventory 140 165,000.00

Accounts Payable 220 165,000.00
To record purchased made on account.

7 Accounts Payable 220 15,000.00

Merchandise Inventory 140 15,000.00
To record return of defective merchandise.

8 Accounts Payable 220 4,000.00

Merchandise Inventory 140 4,000.00
To record return of defective merchandise.

9 Accounts Payable 220 50,000.00

Cash 110 50,000.00
To record partial payment of account.

11 Accounts Payable 220 80,000.00

Cash 110 80,000.00
To record partial payment of account.
b. Journal Entries
COCO COMPUTER STORE
PERPETUAL INVENTORY SYSTEM Page GJ2
GENERAL JOURNAL
Date Account Titles and Explanation F Debit Credit
2015
Dec 14 Notes Payable 210 5,000.00
Cash 110 5,000.00
To record partial payment of account.

15 Salaries Expense 620 12,000.00

Rent Expense 630 2,500.00
Utilities Expense 640 3,100.00
Communication Expense 650 1,800.00
Cash 110 19,400.00
To record payment of various expenses.

17 Cash 110 56,000.00

Accounts Receivable 120 84,000.00
Sales 410 140,000.00
To record sold merchandise on account and on cash.

17 Cost of Sales 510 84,000.00

Merchandise Inventory 140 84,000.00
To record sold merchandise

18 Cash 110 50,000.00

Sales 410 50,000.00
To record sold merchandise on cash.

18 Cost of Sales 510 30,000.00

Merchandise Inventory 140 30,000.00
To record sold merchandise

19 Cash 110 15,000.00

Sales 410 15,000.00
To record sold merchandise on cash.

19 Cost of Sales 510 9,000.00

Merchandise Inventory 140 9,000.00
To record sold merchandise

21 Sales Returns and Allowances 420 5,000.00

Accounts Receivable 120 5,000.00
To record returned defective merchandise.

21 Merchandise Inventory 140 3,000.00

Cost of Sales 510 3,000.00
 To record returned merchandise

b. Journal Entries
COCO COMPUTER STORE
PERPETUAL INVENTORY SYSTEM Page GJ3
GENERAL JOURNAL
Date Account Titles and Explanation F Debit Credit
2015
22 Repair Service Expense 610 4,600.00
Cash 110 4,600.00
To record payment for repair service.

23 Accounts Payable 220 44,000.00

Cash 110 44,000.00
To record partial payment of account.

24 C. Martin Drawing 320 6,100.00

Cash 110 6,100.00
To record withdrawal of owner for personal use.

27 Cash 110 10,000.00

Accounts Receivable 120 10,000.00
To record cash collected from customers.
c. GENERAL LEDGER
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE
Cash 110
Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-01 Investment GJ1 600,000.00 600,000.00
3 office equipment GJ1 54,000.00 546,000.00
3 office supplies GJ1 8,000.00 538,000.00
4 payment of insurance GJ1 20,000.00 518,000.00
5 purchased goods GJ1 17,000.00 501,000.00
9 payment to supplier GJ1 50,000.00 451,000.00
11 payment to supplier GJ1 80,000.00 371,000.00
14 payment to supplier GJ2 5,000.00 366,000.00
15 payment of various expenses GJ2 19,400.00 346,600.00
17 sales GJ2 56,000.00 402,600.00
18 sales GJ2 50,000.00 452,600.00
19 sales GJ2 15,000.00 467,600.00
22 payment of service expense GJ2 4,600.00 463,000.00
23 payment to supplier GJ2 44,000.00 419,000.00
24 payment for drawing GJ2 6,100.00 412,900.00
27 collection GJ2 10,000.00 422,900.00

Accounts Receivable 120

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-17 sales GJ2 84,000.00 84,000.00
21 returned defective goods GJ2 5,000.00 79,000.00
27 payment of customers GJ2 10,000.00 69,000.00

Office Supplies 130

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-03 cash/on account GJ1 10,000.00 10,000.00

Merchandise Inventory 140

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-05 Purchased goods GJ1 170,000.00 170,000.00
6 Purchased goods GJ1 165,000.00 335,000.00
7 returned defective merchandise GJ1 15,000.00 320,000.00
8 returned defective merchandise GJ1 4,000.00 316,000.00
17 sold merchandise GJ2 84,000.00 232,000.00
18 sold merchandise GJ2 30,000.00 202,000.00
19 sold merchandise GJ2 9,000.00 193,000.00
21 returned defective merchandise GJ2 3,000.00 196,000.00
c. GENERAL LEDGER
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE

Prepaid Insurance 150.00

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-04 cash GJ1 20,000.00 20,000.00

Office Equipment 160.00

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-03 Cash/on account GJ1 90,000.00 90,000.00

Note Payable 210

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-03 Office equipment GJ1 36,000.00 36,000.00
14 cash payment GJ2 5,000.00 31,000.00

Accounts Payable 220

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-03 officesupplies GJ1 2,000.00 2,000.00
5 purchased goods GJ1 153,000.00 155,000.00
6 purchased goods GJ1 165,000.00 320,000.00
7 returned defective goods GJ1 15,000.00 305,000.00
8 returned defective goods GJ1 4,000.00 301,000.00
9 cash payment GJ1 50,000.00 251,000.00
11 cash payment GJ1 80,000.00 171,000.00
23 cash payment GJ2 44,000.00 127,000.00

C. Martin, Capital 310

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-01 Cash GJ1 600,000.00 600,000.00
31 Net Profit GJ4 56,000.00 656,000.00
31 Drawing GJ4 6,100.00 649,900.00

C. Martin, Drawing 320

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-24 Cash GJ2 6,100.00 6,100.00
31 Income and Loss Summary GJ4 6,100.00 0.00
c. GENERAL LEDGER
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE

Sales 410
Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-17 cash/on account GJ2 140,000.00 140,000.00
18 cash GJ2 50,000.00 190,000.00
19 cash GJ2 15,000.00 205,000.00
31 Income and Loss Summary GJ4 205,000.00 0.00

Sales Returns and Allowances 430

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-21 returned defective goods GJ2 5,000.00 5,000.00
31 Income and Loss Summary GJ4 5,000.00 0.00

Cost of Sales 510

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-17 cash/on account GJ2 84,000.00 84,000.00
18 cash GJ2 30,000.00 114,000.00
19 cash GJ2 9,000.00 123,000.00
21 returned merchandise GJ2 3,000.00 120,000.00
31 Income and Loss Summary GJ4 120,000.00 0.00

Repair Service Expense 610

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-22 cash GJ2 4,600.00 4,600.00
31 Income and Loss Summary GJ4 4,600.00 0.00

Salaries Expense 620.00

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-15 cash GJ2 12,000.00 12,000.00
31 Income and Loss Summary GJ4 12,000.00 0.00

Rent Expense 630.00

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-15 cash GJ2 2,500.00 2,500.00
31 Income and Loss Summary GJ4 2,500.00 0.00
c. GENERAL LEDGER
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE

Utilities Expense 640.00

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-15 cash GJ2 3,100.00 3,100.00
31 Income and Loss Summary GJ4 3,100.00 0.00

Communication Expense 650.00

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-15 cash GJ2 1,800.00 1,800.00
31 Income and Loss Summary GJ4 1,800.00 0.00

Income and Loss Summary 710

Date Balance
Item PR Debit Credit
2015 Debit Credit
Dec-31 Net Sales GJ4 200,000.00 200,000.00
31 Cost of Sales GJ4 120,000.00 80,000.00
31 Expenses GJ4 24,000.00 56,000.00
31 Net profit GJ4 56,000.00 0.00
d. Trial Balance
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE
Trial Balance
December 31, 2015

Acct. No. Account Titles Debit Credit

110 Cash P 422,900.00
120 Accounts Receivable 69,000.00
130 Office Supplies 10,000.00
140 Merchandise Inventory 196,000.00
150 Prepaid insurance 20,000.00
`160 Office Equipment 90,000.00
210 Notes Payable P 31,000.00
220 Accounts Payable 127,000.00
310 C. Martin, Capital 600,000.00
320 C. Martin, Drawing 6,100.00
410 Sales 205,000.00
420 Sales Returns and Allowances 5,000.00
510 Cost of Sales 120,000.00
610 Repair Service Expense 4,600.00
620 Salaries Expense 12,000.00
630 Rent Expense 2,500.00
640 Utilities Expense 3,100.00
650 Communication Expense 1,800.00
TOTAL P 963,000.00 P 963,000.00
E. Statement of Comprehensive Income
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE
STATEMENT OF COMPREHENSIVE INCOME
For the month ended December 31, 2018

Sales Revenue P 205,000.00

Less: Sales Discount P 0.00
Sales Returns and Allowances 5,000.00 5,000.00
Net Sales P 200,000.00
Less: Cost of Sales 120,000.00
Gross Profit P 80,000.00
Less: Operating Expenses
Repair Service Expense P 4,600.00
Salaries Expense 12,000.00
Rent Expense 2,500.00
Utilities Expense 3,100.00
Communication Expense 1,800.00 24,000.00
Net Profit P 56,000.00
F. Statement of Owner's Equity
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE
STATEMENT OF OWNER'S EQUITY
For the month ended December 31, 2015

C. Martin, Capital, Beginning P 600,000.00

Add Net Profit 56,000.00
Total P 656,000.00
Less: C. Martin, Drawing 6,100.00
C. Martin, Capital, ending P 649,900.00
G. Statement of Cash Flow
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE
STATEMENT OF CASH FLOW
For the month ended December 31, 2015

Operating Activities
Cash Received from:
Sales P 121,000.00
Collection 10,000.00
Refund from Supplier 0.00 P 131,000.00
Cash Payment for:
Office Supplies 8,000.00
Freight In 0.00
Merchandise Inventory 17,000.00
Payment to Supplier 179,000.00
Prepaid insurance 20,000.00
Repair service expense 4,600.00
Salaries Expense 12,000.00
Rent Expense 2,500.00
Utilities Expense 3,100.00
Communication Expense 1,800.00 248,000.00
Net Cash Flow from Operating Activities P -117,000.00
Investing Activities
Office Equipment 54,000.00
Net Cash Flow from Investing Activities P -54,000.00
Financing Activities
C. Martin, Capital 600,000.00
Less: C. Martin, Drawing 6,100.00
Net Cash Flow from Financing Activities 593,900.00
Cash Balance, Ending P 422,900.00
`
H. Statement of Financial Position
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE
STATEMENT OF FINANCIAL POSITION
As of December 31, 2015

ASSETS

Current Assets
Cash P 422,900.00
Accounts Receivable 69,000.00
Office Supplies 10,000.00
Prepaid Insurance 20,000.00
Merchandise Inventory 196,000.00
Total Current Assets P 717,900.00
Non-Current Assets
Office Equipment 90,000.00
Total Non-Current Assets 90,000.00
Total Assets P 807,900.00

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Notes Payable P 31,000.00
Accounts Payable 127,000.00
Total Current Liabilities P 158,000.00
Owner's Equity
C. Martin, Capital, Ending 649,900.00
Total Liabilities and Owner's Equity P 807,900.00
I. Closing Entries
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE Page GJ3
GENERAL JOURNAL
Date Account Titles and Explanation F Debit Credit
2015
Apr 31 Sales 410 205,000.00
Income and Loss Summary 710 200,000.00
Sales Returns and Allowances 420 5,000.00
To close the credit account.

31 Income and Loss Summary 710 144,000.00

Cost of Sales 510 120,000.00
Repair Service Expense 610 4,600.00
Salaries Expense 620 12,000.00
Rent Expense 630 2,500.00
Utilities Expense 640 3,100.00
Communication Expense 650 1,800.00
To close the expense account

31 Income and Loss Summary 710 56,000.00

C. Martin Capital 310 56,000.00
To record the net profit to capital account

31 C. Martin Capital 310 6,100.00

C. Martin Drawing 320 6,100.00
To close the drawing account
J. Post-Closing Trial Balance
PERPETUAL INVENTORY SYSTEM
COCO COMPUTER STORE
POST-CLOSING TRIAL BALANCE
April 31, 2015

Acct. No. Account Titles Debit Credit

110 Cash P 422,900.00
120 Accounts Receivable 69,000.00
130 Office Supplies 10,000.00
140 Merchandise Inventory 196,000.00
150 Prepaid Insurance 20,000.00
160 Office Equipment 90,000.00
210 Notes Payable P 31,000.00
220 Accounts Payable 127,000.00
310 C. Martin Capital 649,900.00
P 807,900.00 P 807,900.00