Particulars Trial Balance Adjustments Adjusted Trial Balance

Dr Cr Dr Cr Dr Cr
Cash in Bank 487,288 487,288
Cash on Hand 75,200 75,200
Accounts Receivable 112,000 112,000
Allowance for Bad Debts 4,000 1,600 5,600
Notes Receivable 4,800 4,800
Merchandise Inventory 89,500 89,500
Prepaid Store Insurance 6,300 3,150 3,150
Store Furniture and Fixtures 16,000 16,000
Accumulated Dep - Store F&F 500 2,100 2,600
Office Furniture and Fixtures 15,000 15,000
Accumulated Dep - Office F&F 900 3,000 3,900
Accounts Payable 54,000 54,000
Notes Payable 180,000 180,000
Unearned Commission 2,400 800 1,600
Withholding Taxes Payable 490 490
SS & EC Premiums Payable 522 522
Phil Health Premiums Payable 100 100
Pag-Ibig Premiums Payable 200 200
Alfonso, Capital 521,900 521,900
Alfonso, Personal 30,000 30,000
Sales 583,200 583,200
Sales Returns and Allowances 5,020 5,020
Sales Discount 2,880 2,880
Purchases 242,000 242,000
Freight In 6,000 6,000
Purchase Returns and Allowances 3,000 3,000
Purchase Discount 2,000 2,000
Advertising Expense 9,000 300 8,700
Sales Salaries Expense 60,000 550 60,550
Office Salaries Expense 33,400 33,400
Rent Expense 96,800 96,800
Taxes Expense 12,000 5,256 17,256
Utilities Expense 42,400 42,400
Interest Expense 600 1,800 2,400
Interest Income 3,000 20 3,020
SS & EC Premiums Expense 6,424 6,424
Phil Health Premiums Expense 1,200 1,200
Pag-Ibig Premiums Expense 2,400 2,400
Total 1,356,212 1,356,212
Bad Debts Expense 1,600 1,600
Interest Receivable 20 20
Insurance Expense 3,150 3,150
Depreciation Expense - Store F&F 2,100 2,100
Depreciation Expense - Office F&F 3,000 3,000
Accrued Salaries Payable 550 550
Prepaid Advertising 300 300
Interest Payable 1,800 1,800
Commission Income 800 800
Merchandise Inventory 67,125 67,125
Income and Expense Summary 67,125 67,125
Taxes Payable 5,256 5,256
Totals 85701 85701 1,437,663 1,437,663
Net Income
Grand Total
Income Statement Balance Sheet Income Statement
Dr Cr Dr Cr
487,288 Sales
75,200 Sales Returns and Allowances
112,000 Sales Discount
5,600 Net Sales
4,800
89,500 Cost of Sales:
3,150 Merchandise Inv. Beg. 89,500
16,000 Purchases 242,000
2,600 Less: Purchase R&A 3,000
15,000 Purchase Discount 2,000
3,900 Freight In 6,000
54,000 Less: Merchandise Inv. End. 67,125
180,000 Gross Profit
1,600 Operating Expenses:
490 General & Admin. Expenses:
522 Office Salaries Expense 33,400
100 Rent Expense (1/4) 24,200
200 Utilities Expense (1/4) 10,600
521,900 Depreciation Exp. - Office 3,000
30,000 SS & EC Premiums Exp. 6,424
583,200 Phil Health Expense 1,200
5,020 Pag-Ibig Premiums Exp. 2,400
2,880 Insurance Expense 3,150
242,000
6,000 Selling & Distrib. Expenses:
3,000 Advertising Expense 8,700
2,000 Sales Salaries Expense 60,550
8,700 Rent expense (3/4) 72,600
60,550 Utilities Expense (3/4) 31,800
33,400 Depreciation Exp. - Store 2,100
96,800 Bad Debts Expense 1,600
17,256
42,400 Operating Income
2,400 Other Income:
3,020 Interest Income
6,424 Commission Income
1,200 Other Expenses:
2,400 Interest Expense
Net Income before Tax
1,600 Tax Expense
20 Net Income after Tax
3,150
2,100
 3,000
550
300
1,800
800
67,125 67,125

5,256
626,780 659,145 810,883 778,518
32,365 32,365
659,145 659,145 810,883 810,883
 Statement of Financial Position

583,200 ASSETS
5,020 Current Assets
2,880 Cash in Bank 487,288
575,300 Cash on Hand 75,200
Accounts Receivable 112,000
Allowance for Bad Debts 5,600
Interest Receivable 20
Notes Receivable 4,800
Merchandise Inventory 67,125
Prepaid Advertising 300
Prepaid Store Insurance 3,150
265,375 Total Current Assets 744,283
309,925 Non-Current Assets
Store Furniture and Fixtures 16,000
Accumulated Dep - Store F&F 2,600
Office Furniture and Fixtures 15,000
Accumulated Dep - Office F&F 3,900
Total Non Current Assets 24,500
TOTAL ASSETS 768,783
LIABILITIES AND OWNER'S EQUITY
Liabilities:
Accounts Payable 54,000
84,374 Accrued Salaries Payable 550
Interest Payable 1,800
Taxes Payable 5,256
Notes Payable 180,000
Unearned Commission 1,600
Withholding Taxes Payable 490
SS & EC Premiums Payable 522
Phil Health Premiums Payable 100
177,350 Pag-Ibig Premiums Payable 200
Total Liabilities 244,518
48,201
Owner's Equity:
3,020 Alfonso, Capital 554,265
800 Alfonso, Personal 30,000
Total Owner's Equity 524,265
2,400 TOTAL LIABILITIES AND OWNER'S EQUITY 768,783
49,621
17,256
32,365
Closing Entries Reversing Entries
Dr Cr
Income and Expense Summary 626,780 Advertising Expense
Purchases 242,000 Prepaid Advertising
Merchandise Inventory, Beg. 89,500
Office Salaries Expense 33,400 Interest Payable
Rent Expense 96,800 Interest Expense
Utilities Expense 42,400
Depreciation Exp. - Office 3,000 Interest Income
SS & EC Premiums Exp. 6,424 Interest Receivable
Phil Health Expense 1,200
Pag-Ibig Premiums Exp. 2,400 Taxes Payable
Insurance Expense 3,150 Taxes Expense
Advertising Expense 8,700
Sales Salaries Expense 60,550
Depreciation Exp. - Store 2,100
Bad Debts Expense 1,600
Interest Expense 2,400
Tax Expense 17,256
Sales Returns and Allowances 5,020
Sales Discount 2,880
Freight In 6,000

Sales 583,200
Merchandise Inventory, End 67,125
Purchase Returns and Allowances 3,000
Purchase Discount 2,000
Interest Income 3,020
Commission Income 800
Income and Expense Summary 659,145

Income and Expense Summary 32,365

Alfonso, Capital 32,365

Alfonso, Capital 30,000

Alfonso, Personal 30,000
Reversing Entries Post Closing Trial Balance
DR CR
Advertising Expense 300 Cash in Bank
Prepaid Advertising 300 Cash on Hand
Accounts Receivable
Interest Payable 1,800 Allowance for Bad Debts
Interest Expense 1,800 Interest Receivable
Notes Receivable
Interest Income 20 Merchandise Inventory
Interest Receivable 20 Prepaid Advertising
Prepaid Store Insurance
Taxes Payable 1,437 Store Furniture and Fixtures
Taxes Expense 1,437 Accumulated Dep - Store F&F
Office Furniture and Fixtures
Accumulated Dep - Office F&F
Accounts Payable
Accrued Salaries Payable
Interest Payable
Taxes Payable
Notes Payable
Unearned Commission
Withholding Taxes Payable
SS & EC Premiums Payable
Phil Health Premiums Payable
Pag-Ibig Premiums Payable
Alfonso, Capital
Total
 Financial analysis

487,288 Profitability:
75,200 Gross margin Ratio = Gross Profit / Net sales
112,000 309,925/575,300 = 0.5387 or 53.87%
5,600
20 Return on Assets Ratio = Net Income / Total Assets
4,800 32,365 / 768,783 = 0.0421 or 4.21%
67,125
300 Solvency:
3,150 Debt to Asset Ratio = Total Liabilities / Total Assets
16,000 244,518/768,783 = 0.3181 or 31,81%
2,600
15,000 Liquidity:
3,900 Current Ratio = current assets / current liabilities
54,000 744,283/244,518 = 3.04 or 3.04:1
550
1,800 Efficiency:
5,256 Inventory Turn Over ratio = cost of sales / average inventory
180,000 265,375/ ((89,500+67,125)/2)) = 3.39 or 3.39:1
1,600
490
522
100
200
524,265
780,883 780,883

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