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Practice Problem (RMC Trading Company)

Practice problem for a merchandising concern covering journal entries, posting to T-accounts, trial balance preparation, adjusting entries, adjusted trial balance, income statement, statement of changes in equity and balance sheet preparation, closing entries, post-closing trial balance preparation, and reversing entries.

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15 views2 pages

Practice Problem (RMC Trading Company)

Practice problem for a merchandising concern covering journal entries, posting to T-accounts, trial balance preparation, adjusting entries, adjusted trial balance, income statement, statement of changes in equity and balance sheet preparation, closing entries, post-closing trial balance preparation, and reversing entries.

Uploaded by

lou-924
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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RMC Trading Company started operations three years ago.

The trial balance of RMC Trading Company as of December


31, 2023 contains the following balances:

Mortgage Payable, due in 5 years 500,000


Notes payable, due in 3 years 500,000
Accounts Payable 500,000
Unearned Rent Income 120,000
Flores, Capital 5,000,000
Flores, Drawing 100,000
Sales 8,243,000
Sales Returns and Allowances 125,000
Sales Discounts 210,000
Purchases 2,625,000
Purchases Returns and Allowances 200,000
Purchases Discounts 250,000
Freight-In 150,000
Freight-Out 175,000
Advertising Expense 72,000
Store Supplies Expense 320,000
Electricity Expenses-Office 125,000
Electricity Expenses-Store 118,000
Office Salaries Expense 495,000
Water Expense - Store 315,000
Fuel and Oil Expense 210,000
Water Expense - Office 325,000
Telephone Expense-Office 45,000
Office Salaries Expense 330,000
Office Supplies Expense 100,000
Repairs and Maintenance-Delivery Vehicle 75,000
Repairs and Maintenance-Office Equipment 50,000
Salesmen's Salaries 547,500
Permits and Licenses Expense 85,000
Telephone Expense-Store 25,500
Interest Expense 35,000
Total ₱ 15,978,000 ₱ 15,978,000
INSTRUCTIONS:

1. Copy the accounts and their respective balances in a 10-column worksheet.


2. Post the adjusting entries for the month based on the following additional information:
a. Merchandise Inventory, Dec. 31, 2023 ---------------------- ₱ 525,000
b. Accrued salaries for the month of December:
1) Office Salaries …………………………………………………..₱ 45,000
2) Salesmen’s Salaries…………………………………………..₱ 45,000
c. Supplies on hand on December 31, 2023:
1) Office supplies ------------------------------------------- ₱ 50,000
2) Store supplies ---------------------------------------------₱ 35,000
d. Electric bill for the month
1) Office ------------------------------------------------------- ₱ 11,000
2) Store ---------------------------------------------------------₱ 10,000
e. Depreciation for the year:
1) Building -----------------------------------------------------₱ 110,000
2) Delivery vehicle -------------------------------------------₱ 80,000
3) Office equipment -----------------------------------------₱ 25,000
4) Machinery --------------------------------------------------₱ 170,000
f. Insurance was paid for one year and took effect August 1, 2023.
g. Of the unearned rent income, 1/2 was already earned.
h. Accrued interest on the notes receivable, ₱ 15,000.
i. Accrued interest on the notes payable, ₱ 12,500.

3. Complete the worksheet.


4. Prepare the Statement of Cost of Goods Manufactured, Income Statement and Statement of Changes in
Owner’s Equity for the year ended December 31, 2023, and the Balance Sheet as of December 31, 2023.

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