Ayala Trading
Statement of Assets and Liabilities
As of Dec.31,2019
ASSETS
Current Assets
Cash 313,300
Accounts receivable 155,000
Allowance for doubtful accounts 2,500 152,500
Merchandise inventory 124,000
Prepaid operating expenses 6,800
Accrued commission income 5,000
Total Current Assets 601,600
Non-Current Assets
Furniture and equipment 246,000
Allowance for depreciation – F/E 65,000 181,000
Total Assets 782,600
LIABILITIES
Current Liabilities
Accounts Payable 86,000
Notes payable 30,000
Accrued interest expense 200
Accrued operating expense 8,500
Total Current Liabilities 124,700
#10 ADJUSTING ENTRIES
Date Particulars Debit Credit
Oct-31 Service Revenue 180,000
Unearned Service Revenue 180,000
To record unearned service revenue
Oct-31 Accounts Receivable 27,000
Service Revenue 27,000
To record revenues on account
Oct-31 Rent Expense 20,000
Accrued Rent Expense 20,000
To record accrued rent
Oct-31 Salaries Expense 12,000
Salaries Payable 12,000
To record accrued salaries
Oct-31 Depreciation Expense 4,000
Accumulated Depreciation 4,000
To record depreciation of non- current assets
Oct-31 Operating Expenses 3,550
Accrued operating expenses 3,550
To record correction of the understated accrued expenses
Little Angels Learning Center
Income Statement
For the month ended October 31,2020
Revenue 594,000
Operating Expenses
Rent Expense 100,000
Utilities Expense 41,400
Salaries Expense 160,000
Depreciation Expense 20,000
Supplies and snacks 43,125
Other operating expenses 22,125 386,650
Operating Income 207,350
Less:Taxes 18,775
Net Income 188,575
#11(a.) SALES (2018-2020)
2018 2019. 2020
Total Sales Reported 74,400 80,900 104,400
Cash Sales for the period 8,500 13,000 15,600
Add: Sales recognized by the next period 7,500 8,400
Add: Sales recognized by the next two periods 1,000
Aging of receivable 400 900 14,100
SALES FOR THE PERIOD 91,800 103,200. 134,100
(b.) COST OF GOODS SOLD (2017-2020)
2018 2019 2020
Beginning Inventory (2017) 5,800
Add: Cash Purchases 62,500. 70,600. 86,900
Credit Purchases 3,000
Total Net Purchases 62,500 70,600 89,900 223,000
Total Goods Available for Sale 228,800
Ending Inventory (2020) (9,400)
COST OF SALES 219,400
(c.) GROSS PROFIT (2018-2020)
2018. 2019 2020
Net Sales 91,800 103,200 134,100
Less: Cost of Goods Sold (61,200). (68,800) (89,400)
Gross Profit for the year 30,600 34,400 44,700
GROSS PROFIT TO NET SALES RATIO (%) 33.33%
GROSS PROFIT TO COST OF SALES RATIO (%) 66.67%
#12 Ward Specialty Foods
Trial Balance
December 31, 2020
ACCOUNT TITLE Dr. Cr.
Cash 18,500
Accounts Receivable 7,900
Less: Allowance for Doubtful Accounts 1,100
Inventory 23,000
Prepaid Rent 6,300
Prepaid Insurance 600
Equipment 35,000
Accumulated depreciation 14,800
Accounts payable 8,800
Accrued Salaries 510
Accrued Payroll Taxes 400
Accrued Utilities 450
Payroll taxes withheld 850
Ward, drawing 24,000
Ward, capital 41,915
Sales 190,400
Purchases 86,700
Salaries 29,635
Payroll taxes 3,050
Rent 7,725
Miscellaneous expenses 3,900
Insurance 2,340
Utilities 3,675
Depreciation Expense 5,800
Doubtful Accounts Expense 1,100
Totals 259,225 259,225
ADJUSTING ENTRIES
Date Particulars Debit Credit
Dec-31 Accounts Receivable 3,400
Sales 3,400
To record additional accrued income
Dec-31 Doubtful Accounts Expense 1,100
Allowance for Doubtful Accounts 1,100
To record allowance for doubtful accounts
Dec-31 Ward, Capital 20,000
Inventory, beginning 20,000
To record removal of beginning inventory
Inventory, ending 23,000
Ward, Capital 23,000
To record reconstruction of ending inventory
Dec-31 Rent Expense 5,625
Ward, Capital 5,625
To record recognition of prepaid rent last period
Dec-31 Prepaid Rent 6,300
Rent Expense 6,300
To record unexpired portion of prepaid rent
Dec-31 Insurance Expense 540
Ward, Capital 540
To record recognition of prepaid insurance last period
Dec-31 Prepaid Insurance 600
Insurance Expense 600
To record unexpired portion of prepaid insurance
Dec-31 Depreciation Expense 5,800
Accumulated Depreciation 5,800
To record depreciation of equipment for the period
Dec-31 Purchases 4,000
Accounts Payable 4,000
To record additional purchases on account made for the period
Dec-31 Ward, Capital 375
Salaries 375
To record correction of the understated accrued salaries
Dec-31 Salaries 510
Accrued Salaries 510
To record accrued salaries for the period
Dec-31 Ward, Capital 250
Payroll Taxes 250
To record correction of the understated accrued payroll taxes
Dec-31 Payroll Taxes 400
Accrued Payroll taxes 400
To record accrued payroll taxes for the period
Dec-31 Ward, Capital 275
Utilities 275
To record correction of the understated accrued utilities
Dec-31 Utilities 450
Accrued Utilities 450
To record accrued utilities for the period
Ward Specialty Foods
Statement of Changes in Equity
As of December 31, 2020
Ward, Capital 12/31/2020 33,650
Add: Adjustments made to Capital 29165
(20,900 8,265
Total 41,915
Less: Drawings (24,000)
Ending Capital Balance 17,915
