The periodic system relies upon an occasional physical count of 

the inventory to determine the ending inventorybalance and the 
cost of goods sold, while the perpetual system keeps continual 
track of inventory balances. There are a number of other 
differences between the two systems, which are as follows:

The difference between the periodic and perpetual inventory systems involves the general ledger account Inventory.

In a periodic system the account Inventory will:

have a constant balance (the ending balance from the previous
period)
not include the cost of purchases (they are recorded in a Purchases
account)

be adjusted at the end of the accounting period (so the balance

reports the costs actually in inventory)

require a physical inventory at least once per year (and estimates

within the year)

require a cost flow assumption (FIFO, LIFO, average)

require a calculation of the cost of goods sold (to be used on the

income statement)

In a perpetual system the account Inventory will:

be debited when there is a purchase of goods (there is no
Purchases account)

be credited for the cost of the items sold (and the account Cost of
Goods Sold will be debited)
have its balance continuously or perpetually changing because of
the above entries
require a physical inventory to correct any errors in the Inventory
account
require a cost flow assumption (FIFO, LIFO, average)

It is possible that a company will use the periodic system in its general ledger and
use a different computer system outside of its general ledger to track the flow of
goods in and out of inventory.
 JOURNALIZING AND POSTING TO LEDGER USE FOR FINANCIAL STATEMENTS
ASSET ASSET
101 CASH CASH AND CASH EQUIVALENTS
105 ACCOUNTS RECEIVABLE RECEIVABLES
115 MERCHANDISE INVENTORY INVENTORIES
120 SUPPLIES PREPAID EXPENSES
150 EQUIPMENT PROPERTY PLANT AND EQUIPMENT
LIABILITIES LIABILITIES
201 ACCOUNTS PAYABLE ACCOUNTS PAYABLE
202 NOTES PAYABLE NOTES PAYABLE
EQUITY EQUITY
301 ABC, CAPITAL ABC, CAPITAL
302 ABC, DRAWING ABC, DRAWING
INCOME
401 SALES
405 SALES RETURNS AND ALLOWANCES NET INCOME
410 SALES DISCOUNTS
EXPENSES
501 PURCHASES
502 PURCHASE RETURNS AND ALLOWANCES
COST OF GOODS SOLD
503 PURCHASE DISCOUNTS
504 FREIGHT IN
505 ADVERTISING EXPENSE ADVERTISING EXPENSE
506 FREIGHT OUT FREIGHT OUT
530 SALARIES SALARIES
510 RENT EXPENSE RENT EXPENSE
540 UTILITIES UTILITIES
601 INCOME SUMMARY INCOME SUMMARY
 Case Problem: ABC Company
JOURNAL ENTRIES - PERPETUAL 1 JOURNAL ENTRIES - PERIODIC 2
REF DR CR REF DR CR
April 1
The business was registered as a single
proprietorship with the DTI. Mr. Lopez
invested Php 39,000.00. 101 Cash - 40,000.00 101 Cash - 40,000.00
301 Lopez, Capital-39,000.00 301 Lopez, Capital-39,000.00
Initial Investment Initial Investment
2 Bought aircondition equipment for Php
10,000.00 cash. 150 Equipment-10,000.00 150 Equipment-10,000.00
101 Cash-10,000.00 101 Cash-10,000.00
Brought equipment Brought equipment
2
bought merchandise on account from
LOWTOWN Supply Co., Php 15,900.00,
terms 2/10, n/30. 115 Merchandise Inventory-15,900.00 501 Purchases -15,900.00
201 Accounts Payable-15,900.00 201 Accounts Payable-15,900.00
LOWTOWN Supply Co,2/10, n/30. LOWTOWN Supply Co,2/10, n/30.
3 Bought office supplies on cash basis for
Php 700.00. 120 Supplies - 700.00 120 Supplies - 700.00
101 Cash- 700.00 101 Cash- 700.00
Bought supplies Bought supplies
4
Sold merchandise on account Php
15,200.00, FOB destination, terms 2/10,
n/30. The cost of merchandise sold is
12,200.00. 105 Accounts Receivables-15,200.00 105 Accounts Receivables-15,200.00
401 Sales - 15,200.00 401 Sales - 15,200.00
Sold mdse, FOB destination, terms 2/10, n/30. Sold mdse, FOB destination, terms 2/10, n/30.

501 Cost of Good Sold-12,200.00

115 Merchandise Inventory-12,200.00
Cost of good sold on account.

5 Paid Php 200.00 freight on April 4 sale. 506 Freight Out-200 506 Freight Out-200
101 Cash-200 101 Cash-200
 Freight on April 4 sale. Freight on April 4 sale.

6
Received credit from LOWTOWN Supply
Co. for merchandise returned Php 300.00. 201 Accounts Payable-300 201 Accounts Payable-300
115 Merchandise Inventory-300 502 Purchase Return & Allowances-300
Received credit from LOWTOWN Supply Co. for merchandise returned Received credit from LOWTOWN Supply Co. for merchandise returned
11 Paid LOWTOWN Supply Co. 201 Accounts Payable-15,600 201 Accounts Payable-15,600
115 Merchandise Inventory (2% of 15,600)-312 503 Purchase Discount (2% of 15,600)-312
101 Cash - 15,288 101 Cash - 15,288
Payment of LOWTOWN Supply Co. April 2 transaction Payment of LOWTOWN Supply Co. April 2 transaction
13 Collected from April4 customers. 101 Cash - 14,898 101 Cash - 14,898
401 Sales Discount (2% of 15,200)-304 401 Sales Discount (2% of 15,200)-304
105 Accounts Receivable - 15,200 105 Accounts Receivable - 15,200
Collection in full from customer Collection in full from customer
14 bought merchandise on cash basis Php
14,400.00. 115 Merchandise Inventory -14,400.00 501 Purchases -14,400.00
101 Cash-14,400 101 Cash-14,400
Brought merchandise on cash basis Brought merchandise on cash basis
15 Salaries paid Php 1,500.00. 530 Salaries-1,500 530 Salaries-1,500
110 cash -1,500 110 cash -1,500
Salaries paid Salaries paid
16
Borrowed money from RCBC Bank, signed
a promissory note for P12,000.00. 101 Cash-12,000 101 Cash-12,000
202 Notes Payable-12,000 202 Notes Payable-12,000
Promissory note from RCBC Bank. Promissory note from RCBC Bank.
17 Received refund from a supplier on cash
purchase of April 14 Php 500.00. 101 Cash-500 101 Cash-500
502 Merchandise Inventory -500 502 Purchases Returns & Allowances-500
Refund from Supplier on April 14 Refund from Supplier on April 14
18
Bought merchandise from MESDA, Php
14,200.00, FOB Shipping point, terms,
2/10, n/30. 115 Merchandise Inventory-14,200.00 501 Purchases -14,200.00
101 Accounts Payable-14,200.00 201 Accounts Payable-14,200.00
 MESDA, FOB Shipping point 2/10,n/30. MESDA, FOB Shipping point 2/10,n/30.
20 Paid freight on April 18 purchase, Php 700.00. 115 Merchandise Inventory-700.00 504 Freight In-700
101 Cash-700 101 Cash-700
Freight on April 18 purchase Freight on April 18 purchase
23
Sold merchandise for Php 16,400.00, The
cost of merchandise sold is 10,500.00. 105 Cash-16,400.00 105 Cash-16,400.00
101 Sales - 16,400.00 101 Sales - 16,400.00
Merchandise sold in cash Merchandise sold in cash

501 Cost of Good Sold-10,500.00

115 Merchandise Inventory-10,500.00
Cost of good sold on cash.
26 bought merchandise for cash Php
12,300.00. 115 Merchandise Inventory -12,300.00 501 Purchases -12,300.00
101 Cash-12,300.00 101 Cash-12,300.00
Brought merchandise on cash basis Brought merchandise on cash basis
27 Paid MESDA on April 18 purchase, Php 9,000.00, 201 Accounts Payable-9,000.00 201 Accounts Payable-9,000.00
101 Cash-9,000.00 101 Cash-9,000.00
Paid MESDA. Paid MESDA.
28 J. Lopez got cash from the business, Php
2,008.00. 302 J. Lopez, Drawing-2,008.00 302 J. Lopez, Drawing-2,008.00
101 Cash-2,008.00 101 Cash-2,008.00
Withdraw cash for personal use. Withdraw cash for personal use.
29 Made refund to cash customers for
defective merchandise, Php 900.00. 405 Sales Returns & Allowances-900.00 405 Sales Returns & Allowances-900.00
101 Cash-900.00 101 Cash-900.00
Refund to customer. Refund to customer.
30
Sold merchandise on account Php
13,700.00, n/30. The cost of merchandise
sold is 11,000.00. 105 Accounts Receivables-13,700.00 105 Accounts Receivables-13,700.00
401 Sales - 13,700.00 401 Sales - 13,700.00
Sold mdse on account, n/30. Sold mdse on account, n/30.

501 Cost of Good Sold-11,000.00

115 Merchandise Inventory-11,000.00
 Cost of good sold on account.

30
Paid the following: Salary 1,500.00
Advertising 1,000.00, Rent 3,500.00,
Utilities 400.00 505 Advertising-1,000.00 505 Advertising-1,000.00
510 Rent-3,500.00 510 Rent-3,500.00
530 Salaries - 1,500.00 530 Salaries - 1,500.00
540 Utilities-400.00 540 Utilities-400.00
101 Cash-6,400.00 101 Cash-6,400.00
End of the month payment of expenses. End of the month payment of expenses.
30
NO JOURNAL ENTRY -
NO ENTRY Inventory,End (as of
April 30) Php
Inventory April 30, Php 25,000.00 25,000.00
 ###
GENERAL LEDGER

Account Code  101  CASH

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 1           39,000.00  39,000.00 APRIL
2           10,000.00            29,000.00 
3                 700.00            28,300.00 
5                 200.00            28,100.00 
11           15,288.00            12,812.00 
13           14,896.00            27,708.00 
14           14,400.00            13,308.00 
15             1,500.00             11,808.00 
16           12,000.00            23,808.00 
17                 500.00            24,308.00 
20                 700.00            23,608.00 
23           16,400.00            40,008.00 
26           12,300.00            27,708.00 
27             9,000.00            18,708.00 
28             2,008.00            16,700.00 
29                 900.00            15,800.00 
30             6,400.00              9,400.00 

Account Code  105  ACCOUNTS RECEIVABLE

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 4           15,200.00  15,200.00 APRIL
13           15,200.00                          -   
30           13,700.00            13,700.00 

Account Code  115  MERCHANDISE INVENTORY

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 2           15,900.00  15,900.00 APRIL
4           12,200.00              3,700.00 
6                 300.00              3,400.00 
11                 312.00              3,088.00 
14           14,400.00            17,488.00 
17                 500.00            16,988.00 
18           14,200.00            31,188.00 
20                 700.00            31,888.00 
23           10,500.00            21,388.00 
26           12,300.00            33,688.00 
30            11,000.00            22,688.00 
 ###
GENERAL LEDGER

Account Code  120  SUPPLIES

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 3                 700.00  700.00 APRIL

Account Code  150  EQUIPMENT

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 2           10,000.00  10,000.00 APRIL

Account Code  201  ACCOUNTS PAYABLE

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 2 ###           15,900.00  15,900.00 APRIL
6                 300.00  15,600.00
11           15,600.00  -
18           14,200.00  14,200.00
27             9,000.00  5,200.00

Account Code  202  NOTES PAYABLE

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 16           12,000.00  12,000.00 APRIL

Account Code  302  J. LOPEZ, DRAWING

BALANCE
Date Item Post Debits Credits Debits Credits Date

APRIL 28             2,008.00  2,008.00 APRIL

`             2,008.00  -
Account Code  301  J. LOPEZ, CAPITAL
BALANCE
Date Item Post Debits Credits Debits Credits Date

APRIL 1           39,000.00  39,000.00 APRIL

30             4,608.00  43,608.00
30             2,008.00  41,600.00
 GENERAL LEDGER

Account Code  401  SALES

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 4           15,200.00  15,200.00 APRIL
23           16,400.00  31,600.00
30           13,700.00  45,300.00
30           45,300.00                       -   

Account Code  405  SALES RETURNS AND ALLOWANCES

BALANCE
Date Item Post Debits Credits Debits Credits Date
SEPT. 30                 900.00  900.00 APRIL
30                 900.00  -

Account Code  410  SALES DISCOUNTS

BALANCE
Date Item Post Debits Credits Debits Credits Date
APRIL 13                 304.00  304.00 APRIL
30                 304.00  -

###
 ###
GENERAL LEDGER

Account Code  101  CASH

BALANCE
Item Post Debits Credits Debits Credits
1     39,000.00  39,000.00
2       10,000.00           29,000.00 
3            700.00           28,300.00 
5            200.00           28,100.00 
11       15,288.00           12,812.00 
13     14,896.00           27,708.00 
14       14,400.00           13,308.00 
15         1,500.00           11,808.00 
16     12,000.00           23,808.00 
17          500.00           24,308.00 
20            700.00           23,608.00 
23     16,400.00           40,008.00 
26       12,300.00           27,708.00 
27         9,000.00           18,708.00 
28         2,008.00           16,700.00 
29            900.00           15,800.00 
30         6,400.00             9,400.00 

Account Code  105  ACCOUNTS RECEIVABLE

BALANCE
Item Post Debits Credits Debits Credits
4     15,200.00  15,200.00
13       15,200.00                        -   
30     13,700.00           13,700.00 

Account Code  115  MERCHANDISE INVENTORY

BALANCE
Item Post Debits Credits Debits Credits
30     25,000.00  25,000.00
 ###
GENERAL LEDGER

Account Code  120  SUPPLIES

BALANCE
Item Post Debits Credits Debits Credits
3          700.00  700.00

Account Code  150  EQUIPMENT

BALANCE
Item Post Debits Credits Debits Credits
2     10,000.00  10,000.00

Account Code  201  ACCOUNTS PAYABLE

BALANCE
Item Post Debits Credits Debits Credits
2 ###       15,900.00  15,900.00
6          300.00  15,600.00
11     15,600.00  -
18       14,200.00  14,200.00
27       9,000.00  5,200.00

Account Code  202  NOTES PAYABLE

BALANCE
Item Post Debits Credits Debits Credits
16       12,000.00  12,000.00

Account Code  302  J. LOPEZ, DRAWING

BALANCE
Item Post Debits Credits Debits Credits

28       2,008.00  2,008.00
30         2,008.00  -
Account Code  301  J. LOPEZ, CAPITAL
BALANCE
Item Post Debits Credits Debits Credits

1       39,000.00  39,000.00
30         4,608.00  43,608.00
30       2,008.00  41,600.00
 GENERAL LEDGER

Account Code  401  SALES

BALANCE
Item Post Debits Credits Debits Credits
4       15,200.00  15,200.00
23       16,400.00  31,600.00
30       13,700.00  45,300.00
30     45,300.00                  -   

Account Code  405  SALES RETURNS AND ALLOWANCES

BALANCE
Item Post Debits Credits Debits Credits
30          900.00  900.00
30            900.00  -

Account Code  410  SALES DISCOUNTS

BALANCE
Item Post Debits Credits Debits Credits
13          304.00  304.00
30            304.00  -

###
 PERPETUAL 1 Periodic -2
POST-CLOSING TRIAL BALANCE POST-CLOSING TRIAL BALANCE
ACCOUNT TITLES DR CR DR CR
101 CASH 18,320.00 18,320.00
105 ACCOUNTS RECEIVABLE 17,000.00 17,000.00
115 MERCHANDISE INVENTORY 5,700.00 6,000.00
120 SUPPLIES 1,000.00 1,000.00
150 EQUIPMENT 15,000.00 15,000.00
201 ACCOUNTS PAYABLE 6,500.00 6,500.00
202 NOTES PAYABLE 13,000.00 13,000.00
301 ABC, CAPITAL 37,520.00 37,820.00
57,020.00 57,020.00 57,320.00 57,320.00
PERPETUAL 1 Periodic -2

STATEMENT OF FINANCIAL PERFORMANCE STATEMENT OF FINANCIAL PERFORMANCE

SALES 45,300.00 SALES 45,300.00

Less: SALES RETURNS AND ALLOWANCES 900.00 Less: SALES RETURNS AND ALLOWANCES 900
SALES DISCOUNTS 304.00 1,204.00 SALES DISCOUNTS 304 1,204.00
NET SALES 44,096.00 NET SALES 44,096.00
Less: COST OF GOOD SOLD 33,700.00 Less: COST OF GOOD SOLD 31,388.00
GROSS PROFIT 10,396.00 GROSS PROFIT 12,708.00
Less: OPERATING EXPENSES Less: OPERATING EXPENSES
ADVERTISING EXPENSE 1,000.00 ADVERTISING EXPENSE 1,000.00
FREIGHT OUT 200.00 FREIGHT OUT 200.00
SALARIES 3,000.00 SALARIES 3,000.00
RENT EXPENSE 3,500.00 RENT EXPENSE 3,500.00
UTILITIES 400.00 UTILITIES 400.00 8,100.00
TOTAL EXPENSES 8,100.00 NET PROFIT 4,608.00
NET PROFIT 2,296.00

COST OF GOODS SOLD

MERCHANDISE INVENTORY, Beg. -

PURCHASES 56,800.00
PURCHASE RETURNS AND ALLOWANCES (800.00)
PURCHASE DISCOUNTS (312.00)
FREIGHT IN 700.00
MERCHANDISE INVENTORY, End (25,000.00)
COST OF GOODS SOLD 31,388.00
PERPETUAL 1 Periodic -2
STATEMENT OF EQUITY STATEMENT OF EQUITY

LOPEZ, CAPITAL, Beginning 0 LOPEZ, CAPITAL, Beginning 0

ADD: INVESTMENT 39,000.00 ADD: INVESTMENT 39,000.00
LESS: DRAWINGS 2,008.00 LESS: DRAWINGS 2,008.00
TOTAL 37,500.00 TOTAL 37,500.00
ADD: NET PROFIT 2,296.00 ADD: NET PROFIT 4,608.00
LOPEZ, CAPITAL APRIL 30 37,520.00 LOPEZ, CAPITAL APRIL 30 37,820.00
PERPETUAL 1 Periodic -2
STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION

ASSETS ASSETS
CURRENT ASSETS CURRENT ASSETS
CASH AND CASH EQUIVALENTS 9,400.00 CASH AND CASH EQUIVALENTS 9,400.00
RECEIVABLES 13,700.00 RECEIVABLES 13,700.00
INVENTORIES 25,000.00 DIFF INVENTORIES 25,000.00 DIFF
SUPPLIES 700.00 PREPAID EXPENSES 700.00
TOTAL CURRENT ASSETS 48,800.00 TOTAL CURRENT ASSETS 48,800.00

NONCURRENT ASSETS NONCURRENT ASSETS

PROPERTY PLANT AND EQUIPMENT 10,000.00 PROPERTY PLANT AND EQUIPMENT 10,000.00
TOTAL ASSETS 58,800.00 TOTAL ASSETS 58,800.00

LIABILITIES AND EQUITY LIABILITIES AND EQUITY

CURRENT LIABILITIES CURRENT LIABILITIES
ACCOUNTS PAYABLE 5,200.00 ACCOUNTS PAYABLE 5,200.00
NONCURRENT LIABILITIES NONCURRENT LIABILITIES
NOTES PAYABLE 12,000.00 NOTES PAYABLE 12,000.00
TOTAL LIABILITIES 17,200.00 TOTAL LIABILITIES 17,200.00

OWNER'S EQUITY OWNER'S EQUITY

J. LOPEZ, CAPITAL 41,600.00 DIFF J. LOPEZ, CAPITAL 41,600.00 DIFF
TOTAL LIABILITIES AND EQUITY 58,800.00 TOTAL LIABILITIES AND EQUITY 58,800.00
 STATEMENT OF CASH FLOWS

CASH FLOW FROM OPERATING ACTIVITIES

CASH RECEIVED FROM:
SALES 16,400.00 cash sales
RECEIVABLES COLLECTION 14,896.00 accounts receivable collected
REFUND FROM PURCHASES 500.00 purchase return
PAYMENT FOR:
OFFICE SUPPLIES (700.00)
FREIGHT ON SOLD GOODS (200.00) FREIGHT OUT
GOODS BOUGHT (50,988.00) cash purchases
OPERATING EXPENSES- (7,900.00) OPERATING EXPENSES-
REFUNDS TO CUSTOMERS (900.00) sales return ADVERTISING EXPE 1,500.00
FREIGHT ON PURCHASE GOODS (700.00) FREIGHT In SALARIES 4,000.00
NET CASH FLOW FROM OPERATING ACTIVITIES (29,592.00) RENT EXPENSE 5,000.00
UTILITIES 600.00
CASH FLOW FROM INVESTING ACTIVITIES 11,100.00
AIRCON EQUIPMENT PURCHASE (10,000.00)

CASH FLOW FROM FINANCING ACTIVITIES 6,400.00

INITIAL INVESMENT 39,000.00 1500
BORROWINGS 12,000.00 Notes payables 7900
DRAWING (2,008.00)
NET CASH FLOW FROM FINANCING ACTIVITIES 48,992.00
INCREASE IN CASH AND CASH EQUIVALENTS 9,400.00
ADD: CASH AND CASH EQUIVALENTS, BEG. -
CASH AND CASH EQUIVALENTS, END. 9,400.00 0
 JOURNAL ENTRIES - PERPETUAL 1 JOURNAL ENTRIES - PERIODIC 2

REF DR CR REF DR CR
SEPT. 30 SALES 401 45,300.00 SALES 401 45,300.00
INCOME SUMMARY 601 44,096.00 INCOME SUMMARY 601 44,096.00
SALES RETURNS AND ALLOWANCES 401 900.00 SALES RETURNS AND ALLOWANCES 401 900.00
SALES DISCOUNTS 410 304.00 SALES DISCOUNTS 410 304.00

MERCHANDISE INVENTORY, END 115 25,000.00

PURCHASE RETURNS AND ALLOWANCES 502 800.00
PURCHASE DISCOUNTS 503 312.00
INCOME SUMMARY 601 31,388.00
PURCHASES 501 56,800.00
FREIGHT IN 504 700.00

INCOME SUMMARY 601 41,800.00 INCOME SUMMARY 601 8,100.00

COST OF GOOD SOLD 501 33,700.00 COST OF GOOD SOLD 501
ADVERTISING EXPENSE 505 1,000.00 ADVERTISING EXPENSE 505 1,000.00
FREIGHT OUT 506 200.00 FREIGHT OUT 506 200.00
SALARIES 530 3,000.00 SALARIES 530 3,000.00
RENT EXPENSE 510 3,500.00 RENT EXPENSE 510 3,500.00
UTILITIES 540 400.00 UTILITIES 540 400.00

INCOME SUMMARY 601 2,296.00 INCOME SUMMARY 601 4,608.00

LOPEZ, CAPITAL 301 2,296.00 LOPEZ, CAPITAL 301 320.00

LOPEZ, CAPITAL 301 2,008.00 LOPEZ, CAPITAL 301 2,008.00

LOPEZ, DRAWING 302 2,008.00 LOPEZ, DRAWING 302 2,008.00
Problem 2
ANSWER
AMOUNT DATE DR CR
1 ABC Company borrowed Php 50,000.00 on Sept. 1 by signing a six month note that specific interest at an annual
percentage rate (APR) of 12%. No interest or principal payment is due until the note matures on Feb. 28. The
company prepares financial statements at the end of each month. Provide an answer for the month end of October Interest Interest
only. 500 31-Oct Expense Payable

DEF Bank Company lent to a customer Php 50,000.00 on Sept. 1 that required the customer to pay at an annual
percentage rate (APR) of 12% on the amount of the loan. The loan is due in 6 months and no payment of interest or
principal is to be made until the note matures on Feb. 28. The bank prepares financial statements at the end of each Interest Interest
500 31-Oct
month. Provide an answer for the month end of October only. Receivable Income

2 ABC Company on September 1 paid its insurance agent Php 1,200.00 for the annual insurance premium covering the
twelve-month period beginning on Sept. 1. The Php 1,200.00 payment was recorded on Sept. 1 with a debit to the
current asset Prepaid Insurance and a credit to the Current Asset Cash. ABC Company prepares monthly financial Insurance Prepaid
statements at the end of each calendar month. Provide an answer for the Dec. 31 only 100 Dec. 31 Expense Insurance

GHI Insurance Company on September 1 received from ABC Co. Php 1,200.00 for the annual insurance premium
covering the twelve-month period beginning on Sept. 1. The Php 1,200.00 receipts was recorded on Sept. 1 with a
debit to the current asset Cash and a credit to the Current Liability Unearned Revenues. GHI Insurance Company Unearned
prepares monthly financial statements at the end of each calendar month. Provide an answer for the Dec. 31 only 100 Dec. 31 Revenue
Revenue

3 ABC Company on Sept. 1 began operations. Purchased of supplies for Php 750.00 and recorded the transaction with
a debit to the income statement account Supplies Expense and a credit to current liability Accounts Payable. ABC
Company prepares monthly financial statements at the end of each calendar month. ABC Company at the end of Supplies
Sept. 30 estimated that Php 300.00 of the supplies were still on hand in the stock room. 300 Sept. 30 Supplies Expense

ABC Company on Sept. 1 began operations. Purchased of supplies for Php 750.00 and recorded the transaction with
a debit to the balance sheet account Supplies and a credit to current liability Accounts Payable. ABC Company
prepares monthly financial statements at the end of each calendar month. ABC Company at the end of Sept. 30 Supplies
estimated that Php 300.00 of the supplies were still on hand in the stock room. The following questions pertain to 450 Sept. 30 Supplies
Expense
the adjusting entry that shoulld be made by ABC company.
Quiz 2: Case Problem: ABC Company is owned by Mr. Cruz. The following transactions were recorded during the month
2018:
April 1 The business was registered as a single proprietorship with the DTI. Mr. Cruz invested Php 39,000.00.
2 Bought aircondition equipment for Php 10,000.00 cash.
2 bought merchandise on account from LYN Supply Co., Php 15,900.00, terms 2/10, n/30.
3 Bought office supplies
Sold merchandise on cashPhp
on account basis for Php 700.00.
15,200.00, FOB destination, terms 2/10, n/30. The cost of merchandise so
4 12,200.00.
5 Paid Php 200.00 freight on April 4 sale.
6 Received credit from LYN Supply Co. for merchandise returned Php 300.00.
11 Paid LYN Supply Co.
13 Collected from April 4 customers.
14 bought merchandise on cash basis Php 14,400.00.
15 Salaries paid Php 1,500.00.
16 Borrowed money from SECURITY Bank, signed a promissory note for P12,000.00.
17 Received refund from a supplier on cash purchase of April 14 Php 500.00.
18 Bought merchandise from PESTO Co, Php 14,200.00, FOB Shipping point, terms, 2/10, n/30.
20 Paid freight on April 18 purchase, Php 700.00.
23 Sold merchandise for Php 16,400.00, The cost of merchandise sold is Php 10,500.00.
26 bought merchandise for cash Php 12,300.00.
27 Paid PESTO Co. on April 18 purchase, Php 9,000.00, no discount allowed on partial payment.
28 Mr. Cruz got cash from the business, Php 2,008.00.
29 Made refund to cash customers for defective merchandise, Php 900.00.
30 Sold merchandise on account Php 13,700.00, n/30. The cost of merchandise sold is 11,000.00.
30 Paid the following: Salary Php 1,500.00; Advertising Php 1,000.00; Rent Php 3,500.00; and Utilities Php 400
REQUIRED:30 Journal
Inventory Aprilto30,
entries Php 25,000.00
record business transactions of Mr. Lopez for April 2018 using both periodic and perpetual i
systems. Use the chart of accounts below:

CHART OF ACCOUNTS

101 CASH 501

105 ACCOUNTS RECEIVABLE 502
115 MERCHANDISE INVENTORY 503
120 SUPPLIES 504
150 EQUIPMENT 505
201 ACCOUNTS PAYABLE 506
202 NOTES PAYABLE 530
301 CRUZ, CAPITAL 510
302 CRUZ, DRAWING 540
401 SALES 601
405 SALES RETURNS AND ALLOWANCES
410 SALES DISCOUNTS
 transactions were recorded during the month of April

e DTI. Mr. Cruz invested Php 39,000.00.

900.00, terms 2/10, n/30.

terms 2/10, n/30. The cost of merchandise sold is

d Php 300.00.

ote for P12,000.00.

Php 500.00.
ping point, terms, 2/10, n/30.

sold is Php 10,500.00.

nt allowed on partial payment.

p 900.00.
f merchandise sold is 11,000.00.
0.00; Rent Php 3,500.00; and Utilities Php 400.00
April 2018 using both periodic and perpetual inventory

PURCHASES
PURCHASE RETURNS AND ALLOWANCES
PURCHASE DISCOUNTS
FREIGHT IN
ADVERTISING EXPENSE
FREIGHT OUT
SALARIES
RENT EXPENSE
UTILITIES
INCOME SUMMARY