acctg101

1. Magaling Merchandising Company
GENERAL JOURNAL
Date Account Title/Explanation Ref No. Debit Credit
Jan 2 Cash 1000 P500,000
Magaling, Capital 3000 P500,000
To record cash initial investment made
3 Taxes and Licenses Expense 6008 P1,500
Cash 1000 P1,500
To record payment for tax and licenses
3 Prepaid Insurance 1004 P3,600
Cash 1000 P3,600
To record payment for insurance
3 Merchandise Inventories 1002 P270,000
Cash 1000 P270,000
To record purchased merchandise
4 Equipment 1010 P120,000
Accounts Payable 2000 P120,000
To record purchased equipment
4 Cash 1000 P180,000
Sales Revenue 4000 P180,000
To record payment for merchandise sold
Cost of Sales 5005 P80,000
Merchandise Inventories 1002 P80,000
To record the amount of items sold
5 Accounts Receivables 1001 P195,000
Sales Revenue 4000 P195,000
To record payment for merchandise sold
Cost of Sales 5005 P82,000
Merchandise Inventories 1002 P82,000
To record the amount of items sold
5 Office Supplies 1003 P3,200
Cash 1000 P3,200

2. To record purchased supplies
6 Cash 1000 P1,200
Merchandise Inventories 1002 P1,200
To record returned faulty merchandise
7 Merchandise Inventories 1002 P53,000
Accounts Payable 2000 P53,000
To record purchased merchandise
8 Sales Returns and Allowances 4001 P300
Accounts Receivables 1001 P300
To record credit memo received
Merchandise Inventories 1002 P150
Cost of Sales 5005 P150
To record returned merchandise
9 Merchandise Inventories 1002 P400
Cash 1000 P400
To record payment for freight charges
12 Cash 1000 P188,859
Sales Discount 4002 5,841
Accounts Receivables 1001 P194,700
To record the payment received
13 Accounts Payable 2000 P600
Merchandise Inventories 1002 P600
To record returned merchandise
15 Cash 1000 P300,000
Loans Payable 2002 P300,000
To record loan received from the bank
15 SalariesExpense 6002 P23,000
Cash 1000 P23,000
To record payment for salaries
15 Machineries 1012 P80,000
Cash 1000 P80,000
To record purchased machineries
16 Accounts Payable 2000 P52,400

3. Cash 1000 P51,352
Merchandise Inventories 1002 1,048
To record payment for merchandise
18 Magaling, Drawing 3001 P6,500
Cash 1000 P6,500
To record cash withdrawal made
20 Office Supplies 1003 P3,100
Accounts Payable 2000 P3,100
To record purchased supplies
20 Accounts Receivables 1001 P40,000
Sales Revenue 4000 P40,000
To record payment for merchandise
Cost of Sales 5005 P21,000
Merchandise Inventories 1002 P21,000
To record amount of items sold
25 Utilities Expense 6003 P2,900
Cash 1000 P2,900
To record payment for electricity
25 Accounts Receivables 1001 P48,000
Freight-out 6001 P500
Sales Revenue 4000 P48,000
Cash 1000 500
To record payment for merchandise
Cost of Sales 5005 P25,000
Merchandise Inventories 1002 P25,000
To record the amount of items sold
29 Cash 1000 P22,800
Sales Discount 4002 1,200
Accounts Receivables 1001 P24,000
To record Partial payment received
30 SalariesExpense 6002 P52,000
Cash 1000 P52,000
To record payment for salaries

4. 30 Rent Expense 6006 P25,000
Cash 1000 P25,000
To record payment for rent
30 Utilities Expense 6003 P1,100
Cash 1000 P1,100
To record payment for water bill
31 Cash 1000 P23,520
Sales Discount 4002 480
Accounts Receivables 1001 P24,000
To record the full payment received
ADJUSTING ENTRIES
Jan 31 Depreciation Expense 6007 P1,000
Accumulated Depreciation - Equipment 1011 P1,000
To record depreciation for equipment
Depreciation Expense 6007 P667
Accumulated Depreciation - Machineries 1013 P667
To record depreciation for machineries
31 Insurance Expense 6005 P300
Prepaid Insurance 1004 P300
To record insurance for 12 months
31 Interest Expense 7000 P1,250
Accrued Interest 2001 P1,250
To record interest loan for the month
31 Office supplies Expense 6004 P4,000
Office supplies 1003 P4,000
To record supplies on hand
CLOSING ENTRIES

5. Jan 31 Sales Revenue 4000 P463,000
SalesReturns and Allowances 4001 P300
SalesDiscounts 4002 7,521
Revenue Account 455,179
To close sales revenue
31 Income and Expense Summary 8000 P207,850
Cost of Sales 5005 P207,850
To close Cost of sales
31 Income and Expense Summary 8000 P111,967
Freight-out 6001 P500
SalariesExpense 6002 75,000
Utilities Expense 6003 4,000
Office Supplies Expense 6004 4,000
Insurance Expense 6005 300
Rent Expense 6006 25,000
Depreciation Expense 6007 1,667
Taxesand Licenses Expense 6008 1,500
To close Operating expenses
31 Income and Expense Summary 8000 P1,250
Interest Expense 7000 P1,250
To close interest expense
31 Income and Expense Summary 8000 P6,500
Magaling, Drawing 3001 P6,500
To close withdrawals
31 Income and Expense Summary 8000 P134,112
Magaling, Capital 3000 P134,112
To close to the capital

6. GENERAL LEDGER
Account Name: CASH Account No.: 1000
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 2 Initial Investment GJ - 1 P500,000 P500,000
3 Taxes and Licenses Payment GJ - 1 P1,500 498,500
3 Insurance Payment GJ - 1 3,600 494,900
3 Purchased Merchandise GJ - 1 270,000 224,900
4 Sold Merchandise GJ - 1 180,000 404,900
5 Purchased Supplies GJ - 1 3,200 401,700
6 Returned Merchandise GJ - 1 1,200 402,900
9 Freight Charges GJ - 1 400 402,500

7. 12 Sold Merchandise GJ - 2 188,859 591,359
15 Loan Received GJ - 2 300,000 891,359
15 SalariesPayment GJ - 2 23,000 868,359
15 Purchased Machineries GJ - 2 80,000 788,359
16 Purchased Merchandise GJ - 2 51,352 737,007
18 Withdrawal Made GJ - 2 6,500 730,507
25 Electricity Payment GJ - 2 2,900 727,607
25 Freight Charges GJ - 2 500 727,107
29 Sold Merchandise GJ - 3 22,800 749,907
30 SalariesPayment GJ - 3 52,000 697,907
30 Rent Payment GJ - 3 25,000 672,907
30 Water Bill Payment GJ - 3 1,100 671,807
31 Sold Merchandise GJ - 3 23,520 P695,327
Account Name: ACCOUNTS RECEIVABLES Account No.: 1001
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 5 Sold Merchandise GJ - 1 P195,000 P195,000
8 Credit Memo received GJ - 1 P300 194,700
12 Sold Merchandise GJ - 2 194,700 0
20 Sold Merchandise GJ - 2 40,000 40,000
25 Sold Merchandise GJ - 2 48,000 88,000
29 Partial Payment received GJ - 2 24,000 64,000
31 Full Payment received GJ - 2 24,000 P40,000
Account Name: MERCHANDISE INVENTORIES Account No.: 1002
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 3 Purchased Merchandise GJ - 1 P270,000 P270,000
4 Sold Merchandise GJ - 1 P80,000 190,000
5 Sold Merchandise GJ - 1 82,000 108,000

8. 6 Returned Faulty Merchandise GJ - 1 1,200 106,800
7 Purchased Merchandise GJ - 1 53,000 159,800
8 Returned Merchandise GJ - 1 150 159,950
9 Payment for Freight charges GJ - 1 400 160,350
13 Returned Merchandise GJ - 2 600 159,750
16 Sold Merchandise GJ - 2 1,048 158,702
20 Sold Merchandise GJ - 2 21,000 137,702
25 Sold Merchandise GJ - 2 25,000 P112,702
Account Name: OFFICE SUPPLIES Account No.: 1003
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 5 Purchased supplies GJ - 1 P3,200 P3,200
20 Purchased supplies GJ - 2 3,100 6,300
31 Supplies on hand GJ - 3 P4000 P2,300
Account Name: PREPAID INSURANCE Account No.: 1004
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 3 Insurance Payment GJ - 1 P3,600 P3,600
31 Insurance Payment GJ - 3 P300 P3,300
Account Name: EQUIPMENT Account No.: 1010
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 4 Purchased Equipment GJ - 1 P120,000 P120,000
Account Name: ACCUMULATED DEPRECIATION - EQUIPMENT Account No.: 1011
BALANCE

9. Date Item REF Debit Credit Debit Credit
Jan 31 Depreciation for equipment GJ - 3 P1000 P1,000
Account Name: MACHINERIES Account No.: 1012
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 15 Purchased machineries GJ - 2 P80,000 P80,000
Account Name: ACCUMULATED DEPRECIATION - MACHINERIES Account No.: 1013
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 31 Depreciation for machineries GJ - 3 P667 P667
Account Name: ACCOUNTS PAYABLE Account No.: 2000
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 4 Purchased equipment GJ - 1 P120,000 P120,000
7 Purchased merchandise GJ - 1 53,000 173,000
13 Returned merchandise GJ - 2 P600 172,400
16 Sold Merchandise GJ - 2 52,400 120,000
20 Purchased supplies GJ - 2 3,100 P123,100
Account Name: ACCRUED INTEREST Account No.: 2001
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 31 Interest loan for the month GJ - 3 P1,250 P1,250
Account Name: LOANS PAYABLE Account No.: 2002

10. BALANCE
Date Item REF Debit Credit Debit Credit
Jan 15 Loan received GJ - 2 P300,000 P300,000
Account Name: MAGALING, CAPITAL Account No.: 3000
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 2 Initial Investment GJ - 1 P500,000 P500,000
31 Withdrawal GJ - 2 P6,500 493,500
31 income and Expense 134,112 P627,612
Account Name: MAGALING, DRAWING Account No.: 3001
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 18 Withdrawal GJ - 2 P6,500 P6,500
31 Close to capital P6,500 P0
Account Name: SALES REVENUE Account No.: 4000
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 4 Sold Merchandise GJ - 1 P180,000 P180,000
5 Sold Merchandise GJ - 1 195,000 375,000
20 Sold Merchandise GJ - 2 40,000 415,000
25 Sold Merchandise GJ - 2 48,000 463,000
31 Closing Entry P463,000 P0
Account Name: SALES RETURNS AND ALLOWANCES Account No.: 4001
BALANCE
Date Item REF Debit Credit Debit Credit

11. Jan 8 Credit memo received GJ - 1 P300 P300
31 Closing Entry P300 P0
Account Name: SALES DISCOUNTS Account No.: 4002
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 12 Sales Discount 3% GJ - 2 P5,841 P5,841
29 Sales Discount 5% GJ - 2 1,200 7,041
31 Sales Discount 2% GJ - 3 480 7,521
31 Closing Entry P7,521 P0
Account Name: COST OF SALES Account No.: 5005
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 4 Sold Merchandise GJ - 1 P80,000 P80,000
5 Sold Merchandise GJ - 1 82,000 162,000
8 Returned Merchandise GJ - 1 P150 161,850
20 Sold Merchandise GJ - 2 21,000 182,850
25 Sold Merchandise GJ - 2 25,000 207,850
31 Closing Entry 207,850 P0
Account Name: FREIGHT - OUT Account No.: 6001
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 25 Freight Charges GJ - 2 P500 P500
31 Closing Entry P500 P0
Account Name: SALARIES EXPENSE Account No.: 6002
BALANCE

12. Date Item REF Debit Credit Debit Credit
Jan 15 Salariespayment GJ - 2 P23,000 P23,000
30 Salariespayment GJ - 3 52,000 75,000
31 Closing Entry P75,000 P0
Account Name: UTILITIES EXPENSE Account No.: 6003
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 25 Payment for Electricity GJ - 2 P2,900 P2,900
30 Payment for Water Bill GJ - 3 1,100 4,000
31 Closing Entry P4,000 P0
Account Name: OFFICE SUPPLIES EXPENSE Account No.: 6004
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 31 Supplies used GJ - 3 P4,000 P4,000
31 Closing Entry P4,000 P0
Account Name: INSURANCE EXPENSE Account No.: 6005
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 31 Insurance payment GJ - 3 P300 P300
31 Closing Entry P300 P0
Account Name: RENT EXPENSE Account No.: 6006
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 30 Payment for rent GJ - 3 P25,000 P25,000
31 Closing Entry P25,000 P0

13. Account Name: DEPRECIATION EXPENSE Account No.: 6007
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 31 Depreciation for equipment GJ - 3 P1,000 P1,000
31 Depreciation for machineries GJ - 3 667 1,667
31 Closing Entry P1,667 P0
Account Name: TAXES AND LICENSES EXPENSE Account No.: 6008
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 4 Payment for Taxesand licenses GJ - 1 P1,500 P1,500
31 Closing Entry P1,500 P0
Account Name: INTEREST EXPENSE Account No.: 7000
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 31 Interest loan for the month GJ - 3 P1,250 P1,250
31 Closing Entry P1,250 P0
Account Name: INCOME AND EXPENSE SUMMARY Account No.: 8000
BALANCE
Date Item REF Debit Credit Debit Credit
Jan 31 Revenue Account P455,179 P455,179
31 Cost of sales Account P207,850 247,329
31 Operating Expense Account 111,967 135,362
31 Other Expense 1,250 134,112
31 Close to capital 134,112 P0

14. MAGALING MERCHANDISING COMPANY
UNADJUSTED TRIAL BALANCE
Account
Code
Account Titles Debit Credit
1000 Cash P695,327
1001 Accounts Receivables 40,000
1002 Merchandise Inventories 112,702
1003 Office Supplies 2,300
1004 Prepaid Insurance 3,300
1010 Equipment 120,000
1011 Accumulated depreciation - equipment
1012 Machineries 80,000
1013 Accumulated depreciation - machineries
2000 Accounts Payable P123,100
2001 Accrued Interest
2002 Loans Payable 300,000
3000 Magaling, Capital 500,000
3001 Magaling, Drawing 6,500
4000 Sales Revenue 463,000
4001 Sales Return and Allowances 300
4002 Sales Discount 7,521
5005 Cost of Sales 207,850
6001 Freight out 500
6002 SalariesExpense 75,000
6003 Utilities Expense 4,000
6004 Office Supplies Expense 4,000
6005 Insurance Expense 300
6006 Rent Expense 25,000
6007 Depreciation Expense
6008 Taxes and Licenses Expense 1,500
7000 Interest Expense
TOTAL P1,386,100 P1,386,100

15. MAGALING MERCHANDISING COMPANY
ADJUSTED TRIAL BALANCE
Account
Code
Account Titles Debit Credit
1000 Cash P695,327
1001 Accounts Receivables 40,000
1002 Merchandise Inventories 112,702
1003 Office Supplies 2,300
1004 Prepaid Insurance 3,300
1010 Equipment 120,000
1011 Accumulated depreciation - equipment P1,000
1012 Machineries 80,000
1013 Accumulated depreciation - machineries 667
2000 Accounts Payable 123,100
2001 Accrued Interest 1,250
2002 Loans Payable 300,000
3000 Magaling, Capital 500,000
3001 Magaling, Drawing 6,500
4000 Sales Revenue 463,000
4001 Sales Return and Allowances 300
4002 Sales Discount 7,521
5005 Cost of Sales 207,850
6001 Freight out 500
6002 SalariesExpense 75,000
6003 Utilities Expense 4,000
6004 Office Supplies Expense 4,000
6005 Insurance Expense 300
6006 Rent Expense 25,000
6007 Depreciation Expense 1,667
6008 Taxes and Licenses Expense 1,500
7000 Interest Expense 1,250
TOTAL P1,389,017 P1,389,017

16. MAGALING MERCHANDISING COMPANY
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE MONTH ENDED JANUARY 31, 2017
Sales Revenues P463,000
Less: SalesReturns and Allowances 300
Sales Discount 7,521
NET SALES 455,179
Less: Cost of Sales 207,850
GROSS PROFIT 247,329
Less: Operating Expenses
Freight out P500
SalariesExpense 75,000
Utilities Expense 4,000
Office Supplies Expense 4,000
Insurance Expense 300
Rent Expense 25,000
Depreciation Expense 1,667
Taxes and Licenses Expense 1,500 111,967
OPERATING INCOME 135,362
Less: Interest Expense 1,250
NET INCOME P134,112

17. MAGALING MERCHANDISING COMPANY
STATEMENT OF CHANGES IN EQUITY
FOR THE MONTH ENDED JANUARY 31, 2017
Capital Beginning P0
Add: Capital Investment 500,000
Less: Magaling, Drawing 6,500
Balance 493,500
Add: Net Income 134,112
CAPITAL ENDING P627,612

18. MAGALING MERCHANDISING COMPANY
STATEMENT OF FINANCIAL POSITION
AS OF JANUARY 31, 2017
ASSETS
CURRENT ASSETS
Cash P695,327
Accounts Receivables 40,000
Merchandise Inventories 112,702
Office Supplies 2,300
Prepaid Insurance 3,300 P853,629
FIXED ASSETS
Equipment P120,000
Less: Accumulated Depreciation 1,000 119,000
Machineries 80,000
Less: Accumulated Depreciation 667 79,333 198,333
TOTAL ASSETS P1,051,962
LIABILITIES AND EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts Payable P123,100
Accrued Interest 1,250
Loans Payable 100,000 P224,350
LONG TERM LIABILITIES
Loans Payable 200,000
TOTAL LIABILITIES P424,350
OWNER'S EQUITY
MAGALING, CAPITAL P627,612
TOTAL LIABILITIES AND EQUITY P1,051,962

19. MAGALING MERCHANDISING COMPANY
CASH FLOW STATEMENT
FOR THE MONTH ENDED JANUARY 31,2017
CASH FLOW FROM OPERATING ACTIVITIES
Received from Customer P415,179
Payment to Suppliers (320,152)
Payment of Operating Expenses (113,200) P(18,173)
CASH FLOW FROM INVESTING ACTIVITIES
Purchased of Machineries (80,000)
CASH FLOW FROM FINANCING ACTIVITIES
Investment from Owner 500,000
Loans from Bank 300,000
Withdrawal for Personal use (6,500) 793,500
NET CASH FLOW FOR THE MONTH P695,327
Add: Cash Beginning 0
CASH ENDING P695,327

20. MAGALING MERCHANDISING COMPANY
POST CLOSING TRIAL BALANCE
Account
Code
Account Titles Debit Credit
1000 Cash P695,327
1001 Accounts Receivables 40,000
1002 Merchandise Inventories 112,702
1003 Office Supplies 2,300
1004 Prepaid Insurance 3,300
1010 Equipment 119,000
1011 Accumulated depreciation - equipment
1012 Machineries 79,333
1013 Accumulated depreciation - machineries
2000 Accounts Payable P123,100
2001 Accrued Interest 1,250
2002 Loans Payable 300,000
3000 Magaling, Capital 627,612
TOTAL P1,051,962 P1,051,962