Mr.

Juan Lopez established a business and was registered as single proprietorship with the Department of
Trade and Industry. The following are the transaction during the month of April 2021

1 Mr Lopez invested P39,000 to the business

Cash 39,000
Lopez Capital 39,000
To record initial investment

2 Bought computer equipment for ₱10,000 cash.

Equipment 10,000
Cash 10,000
To record purchased of equipment

2 Bought merchandise on account from LOWTOWN Supply Co. ₱15, 900, Term, 2/10, n/30
Merchandise Inventory 15,900
Accounts Payable 15,900
To record purchased of merchandise on account

3 Bought office supplies on cash basis for ₱700

Supplies 700
Cash 700
To record purchase of supplies

Sold merchandise on account ₱15,200 F0B Destination, terms 2/10, n/30. Cost of Merchandise
4 P11,000
Accounts Receivable 15,200
Sales 15,200

COGS 11,000
Merchandise Inventory 11,000
To record sales on account

5 Paid ₱200 freight on April 5 sale

Freight out 200
Cash 200
To record payment of freight on sales

6 Received credit memo LOWTOWN Supply Co. for merchandise return ₱300
Accounts Payable 300
Merchandise Inventory 300
To record credit memo from LOWTOWN

11 Paid LOWTOWN
Accounts Payable 15,600
Merchandise Inventory 312
Cash 15,288
To record accounts payable to LOWTOWN

13 Collected from April 5 customers

Cash 14,896
Sales Discount 304
Accounts Receivable 15,200
To records collection of Accounts Receivable
14 Bought merchandise on cash basis for ₱14,400
Merchandise Inventory 14,400
Cash 14,400
To record purchase of merchandise

15 Salaries paid ₱1,500

Salaries expense 1,500
Cash 1,500
To record payment of salaries

16 Borrowed money from RCBC Bank, signed a promissory note for ₱12,000
Cash 12,000
Notes Payable 12,000
To record borrowed money from bank

17 Received refund from a supplier on cash purchase of April 14, ₱500.

Cash 500
Merchandise Inventory 500
To record refuns from supplier

18 Bought merchandise from MESDA, ₱14,200 FOB Shipping. term, 2/10, n/30 (RR/Sales Invoice)
Merchandise Inventory 14,200
Accounts Payable 14,200
To record purchased of merchandise on account

20 Paid freight on April 18 purchase ₱700

Merchandise Inventory 700
Cash 700
To record freight on purchases

23 Sold merchandise for ₱16, 400, Cost of merchandise P12,000.

Cash 16,400
Sales 16,400

COGS 12,000
Merchandise Inventory 12,000
To record cash sales

26 Bought merchandise tor cash ₱12,300 (RR/Sales Invoice)

Merchandise Inventory 12,300
Cash 12,300
To record purchased of merchandise

27 Paid MESDA on April 18 purchase, ₱9.000. No discount allowed on partial payment

Accounts Payable 9,000
Cash 9,000
To record partial payment to Mesda

28 Lopez get cash from the business, P2,008

Lopez Drawings 2,008
Cash 2,008
To record withdrawals
29 Made refund to cash customer for defective merchandise, ₱900
Sales Returns & Allowances 900
Cash 900
To record refund to customer 900

30 Sold merchandise on account ₱13,700. term 2/10 n/30. Cost of merchandise P9,000.
Accounts Receivable 13,700
Sales 13,700

COGS 9,000
Merchandise Inventory 9,000
To record sales on account

31 Paid the following: Advertising ₱1,000, Rent ₱3,500, Utilities ₱400.

Advertising expense 1,000
Utilities Expense 400
Rent Epense 3,500
Cash 4,900
To record payment to various expense

Salaries incurred 1,500. The following deductions must be applied SSS 300; Pagibig 100; Philhealth
31 100
Salaries Expense 1,500
SSS Payable 300
Pagibig Payable 100
Philhealth 100
Cash 1,000
o record payment of salaries

Additional information for year-end adjustments

The useful life of the equipment is 5 years with a residual value of P1000
Remaining unused supplies worth 300. Use asset method

No. Account Titles

110 Cash
120 Accounts Receivable
130 Supplies
140 Merchandise Inventory
150 Equipment
210 Accounts Payable
220 Notes Payable
310 Lopez Capital
320 Lopez Drawings
410 Sales
420 Sales Returns & Allowances
430 Sales Discounts
510 Purchases
520 Purchase Returns & Allowances
530 Purchase Discount
540 Freight in
610 Freight out
620 Salaries Expense
630 Advertising Expense
640 Rent Expense
650 Utilities Expense
*kapag return inventory credit si COGS
 Account 110 Cash

Date Description Post Debit Credit

1 Initial Investment GJ1 39,000

2 Purchase of equipment GJ1 10,000
3 Purchase of Supplies GJ1 700
5 Payment of freight GJ1 200
11 Payment of Merchandise GJ1 15,288
13 Collection of Accounts Receivable GJ1 14,896
14 Purchase of merchandise GJ1 14,400
15 Payment of salaries GJ1 1,500
16 Borrowed money from bank GJ2 12,000
17 Refund from supplier GJ2 500
20 Payment of freight GJ2 700
23 Cash sales GJ2 16,400
26 Purchase of merchandise GJ2 12,300
27 Payment of Merchandise GJ2 9,000
28 Withdrawals GJ2 2,008
29 Refund to Customer GJ2 900
30 Payment of various expense GJ2 4,900
30 Payment of various expense GJ2 1,000

Account 120 Accounts Receivable

Date Description Post Debit Credit

5 GJ1 15,200
13 GJ1 15,200
30 GJ2 13,700

Account 130 Supplies

Date Description Post Debit Credit

3 GJ1 700
GJ3 400

Account 140 Merchandise Inventory

Date Description Post Debit Credit

2 GJ1 15,900
GJ1 11,000
GJ1 300
GJ1 312
 GJ1 14,400
GJ2 500
GJ2 14,200
GJ2 700
GJ2 12,000
GJ2 12,300
GJ2 9,000

Account 150 Equipment

Date Description Post Debit Credit

2 GJ1 10,000

Account 210 Accounts Payable

Date Description Post Debit Credit

3 GJ1 15,900
7 GJ1 300
11 GJ1 15,600
18 GJ2 14,200
27 GJ2 9,000

Account 220 Notes Payable

Date Description Post Debit Credit

16 GJ1 12,000

Account 230 SSS PAYABLE

Date Description Post Debit Credit

30 GJ1 300

Account 230 PAGIBIG Payable

Date Description Post Debit Credit

30 GJ1 300

Account 250 Philhealth Payable

Date Description Post Debit Credit

30 GJ1 100

Account 240 Philhealth Payable

Date Description Post Debit Credit

30 GJ1 100

Account 310 Lopez, Capital

Date Description Post Debit Credit

1 GJ1 39,000

Account 320 Lopez, Drawings

Date Description Post Debit Credit

28 GJ2 2,008

Account 410 Sales

Date Description Post Debit Credit

5 GJ1 15,200
23 GJ2 16,400
30 GJ2 13,700
30 Closing Entries GJ3 45,300

Account 420 Sales Return & Allowances

Date Description Post Debit Credit

29 GJ2 900
30 Closing Entries GJ3 900

Account 430 Sales Discount

Date Description Post Debit Credit

13 GJ1 304
30 Closing Entries GJ3 304
 Account 510 COGS

Date Description Post Debit Credit

4 GJ1 11,000
23 GJ2 12,000
30 GJ2 9,000
30 GJ2

Account 610 Freight Out

Date Description Post Debit Credit

5 GJ1 200
31 GJ3 200

Account 620 Salaries Expense

Date Description Post Debit Credit

15 GJ1 1,500
30 GJ2 1,500
31 GJ3 3,000

Account 630 Advertising Expense

Date Description Post Debit Credit

30 GJ2 1,000
30 GJ3 1,000

Account 640 Rent Expense

Date Description Post Debit Credit

30 GJ2 3,500
30 GJ3 3,500

Account 650 Utilities Expense

Date Description Post Debit Credit

30 GJ2 400
30 GJ3 400
 Account 650 Supplies Expense

Date Description Post Debit Credit

31 GJ3 400
31 GJ3 400

Account 670 Depreciation Expense

Date Description Post Debit Credit

31 GJ3 150
31 GJ3 150

Account 700 Income Summary

Date Description Post Debit Credit

CE To close income accounts GJ3 44,096

CE To close purchase accounts GJ3 32,000
CE To close expense account GJ3 8,650
CE To Close NI to Capital Accts GJ3 3,446
 Cash Account
Balance
Date
Debit Credit
39,000 1
29,000 2
28,300 4
28,100 5
12,812 11
27,708 13
13,308 14
11,808 15
23,808 16
24,308 17
23,608 20
40,008 23
27,708 26
18,708 27
16,700 28
15,800 29
10,900
9,900 30

Accounts Receivable Account

Balance
Date
Debit Credit
15,200 5
- 13
13,700 30

Supplies Account
Balance
Date
Debit Credit
700 4
300

Merchandise Inventory Account

Balance
Date
Debit Credit
15,900 30
4,900
4,600
4,288
 18,688
18,188
32,388
33,088
21,088
33,388
24,388

Equipment Account
Balance
Date
Debit Credit
10,000 2

Accounts Payable Account

Balance
Date
Debit Credit
15,900 3
15,600 7
- 11
14,200 18
5,200 27

Notes Payable Account

Balance
Date
Debit Credit
12,000 16

SSS PAYABLE
Balance
Debit Credit
300

PAGIBIG Payable
Balance
Debit Credit
300

Philhealth Payable
 Balance
Debit Credit
100

Philhealth Payable
Balance
Debit Credit
100

Lopez, Capital 4608 Gross Profit Account

Balance
Date
Debit Credit Freight Out 200
39,000 Salaries Expense 3,000 1
Supplies Expense
Lopez, Drawings Account
Balance
Date
Debit Credit
2,008 28

Sales Account
Balance
Date
Debit Credit
15,200 5
31,600 23
45,300 30
30

ales Return & Allowances Account

Balance
Date
Debit Credit
900 29
30

Sales Discount Account

Balance
Date
Debit Credit
304 - 13
30
 COGS Account
Balance
Date
Debit Credit
11,000 - 3
23,000 14
32,000 18
32,000 26

Freight Out Account

Balance
Date
Debit Credit
200 11
30

Salaries Expense Account

Balance
Date
Debit Credit
1,500 15
3,000 30
30

Advertising Expense Account

Balance
Date
Debit Credit
1,000 30
30

Rent Expense Account

Balance
Date
Debit Credit
3,500 30
30

Utilities Expense Account

Balance
Date
Debit Credit
400 30
30
 Supplies Expense
Balance
Debit Credit
400

Depreciation Expense
Balance
Debit Credit
150

Income Summary Account

Balance
Date
Debit Credit
44,096 CE
12,096 gross profit CE
3,446 CE
CE
 Account 110 Cash
Balance
Description Post Debit Credit
Debit Credit
Initial Investment GJ1 39,000 39,000
Purchase of equipment GJ1 10,000 29,000
Purchase of Supplies GJ1 700 28,300
Payment of freight on sales GJ1 200 28,100
Payment of Merchandise GJ1 15,288 12,812
Collection of Accounts Receivable GJ1 14,896 27,708
Purchase of merchandise GJ1 14,400 13,308
Payment of salaries GJ1 1,500 11,808
Borrowed money from bank GJ2 12,000 23,808
Refund from supplier GJ2 500 24,308
Payment of freigh in GJ2 700 23,608
Cash sales GJ2 16,400 40,008
Purchase of merchandise GJ2 12,300 27,708
Payment of Merchandise GJ2 9,000 18,708
Withdrawals GJ2 2,008 16,700
Refund to Customer GJ2 900 15,800

Payment of various expense GJ2 6,400 9,400

Account 120 Accounts Receivable

Balance
Description Post Debit Credit
Debit Credit
GJ1 15,200 15,200
GJ1 15,200 -
GJ2 13,700 13,700

Account 130 Supplies

Balance
Description Post Debit Credit
Debit Credit
GJ1 700 700

Account 140 Merchandise Inventory

Balance
Description Post Debit Credit
Debit Credit
Closing Entries GJ3 25,000 25,000
Account 150 Equipment
Balance
Description Post Debit Credit
Debit Credit
GJ1 10,000 10,000

Account 210 Accounts Payable

Balance
Description Post Debit Credit
Debit Credit
GJ1 15,900 15,900
GJ1 300 15,600
GJ1 15,600 -
GJ2 14,200 14,200
GJ2 9,000 5,200

Account 220 Notes Payable

Balance
Description Post Debit Credit
Debit Credit
GJ1 12,000 12,000
 Account 310 Lopez, Capital
Balance
Description Post Debit Credit
Debit Credit
GJ1 39,000 39,000

Account 320 Lopez, Drawings

Balance
Description Post Debit Credit
Debit Credit
GJ2 2,008 2,008

Account 410 Sales

Balance
Description Post Debit Credit
Debit Credit
GJ1 15,200 15,200
GJ2 16,400 31,600
GJ2 13,700 45,300
Closing Entries GJ3 45,300

Account 420 Sales Return & Allowances

Balance
Description Post Debit Credit
Debit Credit
GJ2 900 900
Closing Entries GJ3 900

Account 430 Sales Discount

Balance
Description Post Debit Credit
Debit Credit
GJ1 304 304 -
Closing Entries GJ3 304
 Account 510 Purchases
Balance
Description Post Debit Credit
Debit Credit
GJ1 15,900 15,900 -
GJ1 14,400 30,300
GJ2 14,200 44,500
GJ2 12,300 56,800

Account 540 Freight In

Balance
Description Post Debit Credit
Debit Credit
GJ1 700 700
Closing Entries GJ3 700

Account 620 Salaries Expense

Balance
Description Post Debit Credit
Debit Credit
GJ1 1,500 1,500
GJ2 1,500 3,000
Closing Entries GJ3 3,000

Account 630 Advertising Expense

Balance
Description Post Debit Credit
Debit Credit
GJ2 1,000 1,000
Closing Entries GJ3 1,000

Account 640 Rent Expense

Balance
Description Post Debit Credit
Debit Credit
GJ2 3,500 3,500
Closing Entries GJ3 3,500

Account 650 Utilities Expense

Balance
Description Post Debit Credit
Debit Credit
GJ2 400 400
Closing Entries GJ3 400
 Account 700 Income Summary
Balance
Description Post Debit Credit
Debit Credit
To close income accounts GJ3 44,096 #REF!
To close purchase accounts GJ3 56,388 #REF!
To close expense account GJ3 8,100 #REF!
To Close NI to Capital Accts GJ3 4,608
Acct No. Account Titles Debit Credit Acct No.
110 Cash 9,900 110
120 Accounts Receivable 13,700 120
130 Supplies 700 130
140 Merchandise Inventory 24,388 140
150 Equipment 10,000 150
160 Accumulated Depreciation 160
210 Accounts Payable 5,200 210
220 Notes Payable 12,000 220
230 SSS 300 230
240 Philhealth 100 240
250 Pagibig 100 250
310 Lopez, Capital 39,000 310
320 Lopez, Drawings 2,008 320
410 Sales 45,300 410
420 Sales Return & Allowances 900 420
430 Sales Discounts 304 430
510 COGS 32,000 510
610 Freight Out 200 610
620 Salaries Expense 3,000 620
630 Advertising Expense 1,000 630
640 Rent Expense 3,500 640
650 Utilities Expense 400 650
660 Supplies Expense 660
670 Depreciation Expense 670
601 Income Summary 601
102,000 102,000
based on GL
 Account Titles Debit Credit
Cash
Accounts Receivable
Supplies
Merchandise Inventory
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
SSS
Philhealth
Pagibig
Lopez, Capital
Lopez, Drawings
Sales
Sales Return & Allowances
Sales Discounts
COGS
Freight Out
Salaries Expense
Advertising Expense
Rent Expense
Utilities Expense
Supplies Expense
Depreciation Expense
Income Summary
- -
based on GL
DATE ACCOUNT TITLE EXPLANATION PR
31 Accumulated Depreciation 670
Depreciation Expense 160
To record depreciation of equipment

31 Supplies Expense 660

Supplies 130
DEBIT CREDIT
150
150

400
400
Acct No. Account Titles Debit Credit Acct No.
110 Cash 9,900 110
120 Accounts Receivable 13,700 120
130 Supplies 300 130
140 Merchandise Inventory 24,388 140
150 Equipment 10,000 150
160 Accumulated Depreciation 150 160
210 Accounts Payable 5,200 210
220 Notes Payable 12,000 220
230 SSS 300 230
240 Philhealth 100 240
250 Pagibig 100 250
310 Lopez, Capital 39,000 310
320 Lopez, Drawings 2,008 320
410 Sales 45,300 410
420 Sales Return & Allowances 900 420
430 Sales Discounts 304 430
510 COGS 32,000 510
610 Freight Out 200 610
620 Salaries Expense 3,000 620
630 Advertising Expense 1,000 630
640 Rent Expense 3,500 640
650 Utilities Expense 400 650
660 Supplies Expense 400 660
670 Depreciation Expense 150 670
601
102,150 102,150
based on GL
 Account Titles Debit Credit
Cash
Accounts Receivable
Supplies
Merchandise Inventory
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
SSS
Philhealth
Pagibig
Lopez, Capital
Lopez, Drawings
Sales
Sales Return & Allowances
Sales Discounts
COGS
Freight Out
Salaries Expense
Advertising Expense
Rent Expense
Utilities Expense
Supplies Expense
Depreciation Expense
Income Summary
- -
based on GL
Sales 45,300
Less: Sales Returns & Allowances 900
Sales Discount 304 1,204
Net Sales 44,096
Less: Cost of Goods Sold 32,000
Gross Profit 12,096
Less: Operating Expenses
Freight Out 200
Salaries Expense 3,000
Advertising Expense 1,000
Rent Expense 3,500
Utilities Expense 400
Supplies Expense 400
Depreciation Expense 150 8,650
Net Income /(Loss) 3,446 balance on capital g/l
BASED ON TRIAL BALANCE

Sales
Less: Sales Returns & Allowances
Sales Discount -
Net Sales -
Less: Cost of Goods Sold
Gross Profit -
Less: Operating Expenses
Freight Out
Salaries Expense
Advertising Expense
Rent Expense
Utilities Expense
Supplies Expense
Depreciation Expense -
Net Income /(Loss) -
Lopez, Capital, Beginning
Add: Initial Investment 39,000.00
Net Income 3,446.00 BASED ON IS INCOME/LOSS KAPAG LOSS BAWAS MO
Total 42,446.00
Less: Lopez, Drawings 2,008.00
Lopez, Capital, End 40,438.00 match on g/l

BASED ON TRIAL BALANCE

Lopez, Capital, Beginning

Add: Initial Investment
Net Income
Total -
Less: Lopez, Drawings
Lopez, Capital, End -
KAPAG LOSS BAWAS MO SA INITIAL INVESTMENT
 ASSETS
Current Assets
Cash 9,900
Accounts Receivable 13,700
Supplies 300
Merchandise Inventory 24,388
Non-Current Assets
Equipment 10,000
Accumulated Depreciation (150)
TOTAL ASSETS 58,138

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Accounts Payable 5,200
SSS Payable 300
Pagibig 100
Philhealth 100
Non-current Liabilities
Notes Payable 12,000
TOTAL LIABILITIES 17,700

Owner's Equity
Lopez, Capital 40,438 CAPITAL END
TOTAL LIABILITIES AND OWNER'S EQUITY 58,138 KAPAG NAKA CREDIT SYA SA
BASED ON TRIAL BALANCE

ASSETS
Current Assets
Cash
Accounts Receivable
Supplies
Merchandise Inventory
Non-Current Assets
Equipment
Accumulated Depreciation
TOTAL ASSETS -

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Accounts Payable
Non-current Liabilities
Notes Payable
TOTAL LIABILITIES -

Owner's Equity
Lopez, Capital
TOTAL LIABILITIES AND OWNER'S EQUITY -
CAPITAL END
KAPAG NAKA CREDIT SYA SA TB NEGATIVE SYA
BASED ON TRIAL BALANCE
Cash flow from Operating Activities
Collection from Cash customers 16,400
Collection from credit customers 14,896
Refund from purchases 500
Payment of goods bought (50,988)
Freight on Pruchases (700)
Payment of supplies (700)
Refund to customer (900)
Payment of Operating Expenses (7,600)
Net Cash flow from Operating Activities (29,092)

Cash Flow from Investing Activities

Equipment bought (10,000)
Sale of Equipment
Cash flow from Investing Activities (10,000)

Cash flow from Financing Activities

Investment of Capital 39,000
Withdrawal for personal use (2,008)
Borrowing from Bank 12,000
Net Cash flow from Financing Activities 48,992
INCREASE/(DECREASE) IN CASH 9,900
BASED GL

Cash flow from Operating Activities

Collection from Cash customers
Collection from credit customers
Refund from purchases
Payment of goods bought
Freight on Pruchases
Payment of supplies
Refund to customer
Payment of Operating Expenses
Net Cash flow from Operating Activities -

Cash Flow from Investing Activities

Equipment bought
Sale of Equipment
Cash flow from Investing Activities -
Cash flow from Financing Activities
Investment of Capital
Withdrawal for personal use
Borrowing from Bank
Net Cash flow from Financing Activities -
INCREASE/(DECREASE) IN CASH
DATE ACCOUNT TITLE EXPLANATION PR DEBIT
30 Sales 410 45,300
Sales Return & Allowances 420
Sales Discount 430
Income Summary 700
To close sales accounts

30 Income Summary 700 32,000

COGS 510
To close COGS

30 Income Summary 700 8,650

Freight Out 610
Salaries Expense 620
Advertising Expense 630
Rent Expense 640
Utilities Expense 650
Supplies Expense 660
Depreciation Expense 670
To close expense accounts

30 Income Summary 700 3,446

Lopez, Capital 310
To close income to capital accounts

30 Lopez, Capital 310 2,008

Lopez Drawings 320
To close drawings to capital accounts
CREDIT
BASED ON IS
900
304
44,096

BASED ON COGS
32,000

200 BASED ON IS
3,000
1,000
3,500
400
400
150

3,446 BASED ON IS

2,008 BASED ON SCE

CODE ACCOUNT TITLES DEBIT CREDIT
110 Cash 9,900
120 Accounts Receivable 13,700
130 Supplies 300
140 Merchandise Inventory 24,388
150 Equipment 10,000
160 Accumulated Depreciation 150
210 Accounts Payable 5,200
220 Notes Payable 12,000
230 SSS 300
240 Philhealth 100
250 Pagibig 100
310 Lopez, Capital 40,438
58,288 58,288
BASED ON BS OR GL
SHOULD MATCH ON BS

CODE ACCOUNT TITLES DEBIT CREDIT

110 Cash
120 Accounts Receivable
130 Supplies
140 Merchandise Inventory
150 Equipment
160
210 Accounts Payable
220 Notes Payable
310 Lopez, Capital
- -