Analyze Journalize

Post entries to the

source transactions in the
accounts in the Prepare
documents. general journal.
general ledger. PRELIMINARY TRIAL
Balance.
COMPREHENSIVE
Journalize
EXAMPLE Journalize
ADJUSTING
REVERSING
ENTRIES in the
THE 10 STEPS IN THE ENTRIES in the
general journal. ACCOUNTING CYCLE general journal.

Prepare financial
Journalize
statements.
CLOSING ENTRIES
in the general Prepare worksheet
journal. or FINAL TRIAL
Prepare POST BALANCE
CLOSING TRIAL
Balance.
The transactions of Boy Barios for
the month of December 2020 were
the following
JOURNAL ENTRIES –
Periodic Inventory
Systems
1 Started his business named BARIOS TRADING with investment of cash,
P600,000, furniture and fixture, P50,000 and merchandise inventory,
P40,000.

1 Cash 600,000
Furniture and Fixtures 50,000
Merchandise Inventory 40,000
BB, Capital 690,000

2 Bought merchandise from FAR Company on credit, P60,000. Terms n/30.

2 Purchases 60,000

Accounts Payable 60,000

2 Paid rent for three months, P16,800.
Bought supplies for office use, P11,200 cash

2 Office Supplies 11,200

Rent Expense 16,800
Cash 28,000

3 Purchased merchandise for cash, P200,000, and paid freight, P5,000

3 Purchases 200,000
Freight In 5,000
Cash 205,000
4 Purchased merchandise on account from Ronnie Black, P100,000. Terms,
2/10, n/30

4 Purchases 100,000
Accounts Payable 100,000

6 Sold merchandise, costing P100,000, on account to Juan Carlos, P130,000.

Terms, 1/10, n/30.

6 Accounts Receivable 130,000

Sales 130,000
7 Received cash for returned merchandise purchased on December 3,
P20,000.

7 Cash 20,000
Purchase Returns and 20,000
Allowances

9 Sold to Joy Poe merchandise for cash, P50,000. Gross Profit rate based on
sales is 40%.

9 Cash 50,000
Sales 50,000
11 Sold to Western Trading on account merchandise for P120,000. Freight
paid by B.B., P2,000. Terms: 2/10, 1/20, n/30. Gross profit rate is based on
cost, 20%.

11 Accounts Receivable 120,000

Freight Out 2,000
Sales 120,000
Cash 2,000

12 Returned P10,000 merchandise purchased from Ronnie Black in December

4

12 Accounts Payable 10,000

Purchase Returns and 10,000
Allowances
13 Paid Ronnie Black the total amount due to him

13 Accounts Payable 90,000

Cash 88,200
Purchase Discount 1,800

15 Collected full payment from Juan Carlos on the sale on December 6.

Paid half month salaries of employee, P8,000

15 Cash 128,700
Sales Discount 1,300
Accounts Receivable 130,000

15 Salaries and Wages 8,000

Cash 8,000
17 Purchase merchandise on account from Central Trading, P250,000. Terms:
2/10, n/30

17 Purchases 250,000
Accounts Payable 250,000

19 Sold to Art Cruz merchandise for P180,000 on account. Terms: 2% 5 days

EOM. GPR is 25%

19 Accounts Receivable 180,000

Sales 180,000
22 Paid telephone bill for the month, P770

22 Utilities Expense 770

Cash 770

24 Collected in full the account of Western Trading

24 Cash 118,800
Sales Discount 1,200
Accounts Receivable 120,000

25 Paid half of the account to Central Trading

25 Accounts Payable 125,000

Cash 125,000
28 Purchased merchandise from M. Mfg. Co. and issued promissory note for
P40,000.

28 Purchases 40,000
Notes Payable 40,000

30 Sold to Dagupan Trading merchandise for P300,000, received promissory

note for this amount. Mark-up rate is 25%

30 Notes Receivable 300,000

Sales 300,000
PRELIMINARY TRIAL
BALANCE
 BARIOS TRADING
Preliminary Trial Balance-Periodic
December 31 2020
DEBIT CREDIT
Cash 460,530
Notes Receivable 300,000
Accounts Receivable 180,000
Merchandise inventory 40,000
Office Supplies 11,200
Furniture and Fixtures 50,000
Notes Payable 40,000
Accounts Payable 185,000
B.B., Capital 690,000
Sales 780,000
Sales Discount 2,500
Purchases 650,000
Freight In 5,000
Purchase Discount 1,800
Purchase Returns and Allowances 30,000
Freight Out 2,000
Rent Expense 16,800
Utilities Expense 770
Salaries and Wages Expense 8,000
TOTAL 1,726,800 1,726,800
ADJUSTING ENTRIES
1 The estimated life of the furniture and fixture is four years with scrap
value of P2,000

30 Depreciation Expenses 1,000

Accumulated Depreciation-F&F 1,000

2 Rent expense is for a period of 4 months (December 2020 to March 2021).

30 Prepaid Rent 11,200

Rent Expense 11,200

3 Unused office supplies as of December 31, P2,000.

30 Office Supplies Expense 9,200

Office Supplies 9,200
4 Accrued interest on notes payable as of December 31, P1,000.

30 Interest Expense 1,000

Accrued Interest Payable 1,000

5 Accrued interest on notes receivable as of December 31, P3,000.

30 Accrued Interest Receivable 3,000

Interest Income 3,000

6 Accrued salaries as of December 31, P12,000.

30 Salaries and Wages 12,000

Accrued Salaries and Wages 12,000
8 Unsold merchandise inventory as of December 31, P200,000
FINAL TRIAL
BALANCE
 BARIOS TRADING
Final Trial Balance
December 31 2020

Cash 460,530
Notes Receivable 300,000
Accrued Interest Receivable 3,000
Accounts Receivable 180,000
Merchandise inventory 40,000
Prepaid Rent 11,200
Office Supplies 2,000
Furniture and Fixtures 50,000
Accumulated Depreciation-F &F 1,000
Notes Payable 40,000
Accrued Interest Payable 1,000
Accounts Payable 185,000
Accrued Salaries and Wages 12,000
B.B., Capital 690,000
Sales 780,000
Sales Discount 2,500
Purchases 650,000
Freight In 5,000
Purchase Discount 1,800
Purchase Returns and Allowances 30,000
Freight Out 2,000
Rent Expense 5,600
Utilities Expense 770
Office Supplies Expense 9,200
Depreciation Expenses 1,000
Salaries and Wages Expense 20,000
Interest Income 3,000
Interest Expense 1,000

TOTAL 1,743,800 1,743,800

 FINANCIAL
STATEMENTS
 B.B. TRADING
Statement of Operations
December 2020

Sales 780,000
Less: Sales Discount 2,500
Net Sales 777,500
Less: Cost of Sales (Schedule 1) 463,200
Gross Profit 314,300
Less: Operating Expenses (Schedule 2) 38,570
Operating Income 275,730
Add(Deduct): Net Other items
Interest Income 3,000
Interest Expense 1,000 2,000
Net Income 277,730
 Schedule 1
B.B. TRADING
Schedule of Cost of Sales
December 2020

Merchandise Inventory, beg 40,000

Add: Net Cost of Purchases
Purchases 650,000
Less: Purchase Discount 1,800
Purchase Returns and
Allowances 30,000 31,800
Net Purchases 618,200
Add: Freight In 5,000 623,200
TGAS 663,200
Less: Merchandise Inventory, end 200,000
Cost of Sales 463,200
 Schedule 2
B.B. TRADING
Schedule of Operating Expenses
December 2020

Freight Out 2,000

Rent Expense 5,600
Utilities Expense 770
Office Supplies Expense 9,200
Depreciation Expenses 1,000
Salaries and Wages Expense 20,000
Total 38,570
 B.B. TRADING
Statement of OWNER’S Equity
December 2020

B.B. , Capital, beg 690,000

Add : Net Income 277,730
B.B., Capital, end 967,730
 B.B. TRADING
Statement of Financial Position
December 2020

ASSETS
Current Assets:
Cash 460,530
Notes Receivable 300,000
Accrued Interest Receivable 3,000
Accounts Receivable 180,000
Merchandise inventory 200,000
Prepaid Rent 11,200
Office Supplies 2,000 1,156,730
Non-Current Assets:
Furniture and Fixtures 50,000
Accumulated Depreciation-F &F 1,000 49,000
TOTAL 1,205,730
 LIABILITIES
Current Liabilities:
Notes Payable 40,000
Accrued Interest Payable 1,000
Accounts Payable 185,000
Accrued Salaries and Wages 12,000 238,000

OWNER’S EQUITY
B.B., Capital 967,730
TOTAL 1,205,730
CLOSING ENTRIES
30 Sales 780,000
Purchase Discount 1,800
Purchase Returns and Allowances 30,000
Interest Income 3,000
Income and Expense Summary 814,800

Income and Expense Summary 69,7070

Sales Discount 2,500
Purchases 650,000
Freight In 5,000
Freight Out 2,000
Rent Expense 5,600
Utilities Expense 770
Office Supplies Expense 9,200
Depreciation Expenses 1,000
Salaries and Wages Expense 20,000
Interest Expense 1,000
30 Income and Expense Summary 40,000
Merchandise Inventory 40,000

Merchandise Inventory 200,000

Income and Expense Summary 200,000

Income and Expense Summary 277,730

B.B., Capital 277,730
POST CLOSING
TRIAL BALANCE
 BARIOS TRADING
Post Closing Trial Balance
December 31 2020

DEBIT CREDIT
Cash 460,530
Notes Receivable 300,000
Accrued Interest Receivable 3,000
Accounts Receivable 180,000
Merchandise inventory 200,000
Prepaid Rent 11,200
Office Supplies 2,000
Furniture and Fixtures 50,000
Accumulated Depreciation-F &F 1,000
Notes Payable 40,000
Accrued Interest Payable 1,000
Accounts Payable 185,000
Accrued Salaries and Wages 12,000
B.B., Capital 967,730

TOTAL 1,206,730 1,206,730

REVERSING
ENTRIES
30 Depreciation Expenses 1,000
Accumulated Depreciation-F&F 1,000

NO REVERSING ENTRY
30 Prepaid Rent 11,200
Rent Expense 11,200

1 Rent Expense 11,200

Prepaid Rent 11,200

30 Office Supplies Expense 9,200

Office Supplies 9,200

NO REVERSING ENTRY
30 Interest Expense 1,000
Accrued Interest Payable 1,000

1 Accrued Interest Payable 1,000

Interest Expense 1,000

30 Accrued Interest Receivable 3,000

Interest Income 3,000

1 Interest Income 3,000

Accrued Interest Receivable 3,000

30 Salaries and Wages 12,000

Accrued Salaries and Wages 12,000

30 Accrued Salaries and Wages 12,000

Salaries and Wages 12,000