ULTRA TRADING is a retail store owned and managed by Emilio Lim

.These are the selected transactions happened on May 2020

May 1- Emilio Lim the owner invested P200,000 cash
- Purchased merchandise from Rizal Trading Co.
P15,500 terms 10-5 trade discount ,3/5,2/10,n/30
2- Purchased a computer set and POS from Automatic
Computer Center for cash P45,000,trade discount 3-5
3-Complained to Automatic Computer Center due to some
minor defects on the computer. A refund of P1,000 was
received
- Sold merchandise to Edz Dizon for cash P 3,350 costing
P2,780
6- Purchased merchandise from Rose Merchandising P22,000
Terms 2/10,n/30
7-Paid the rent for the month to LLB Realty P4,500
-Emilio Lim withdrew from the business merchandise costing
P800 for his personal use.
8- Purchased merchandise from Cuenca and Sons and gave a
60-day 6% note P5,500
10-Paid the account with Rizal Trading Co. in full
-Refunded Edz Dizon P 100 for merchandise he returned
11 -Corona Supply Co. sent a bill for P1,450 for the supplies
purchased on credit
13-Sold merchandise to D. Tiglao on account P3,500 . The cost
of merchandise was P2,800 terms 2/10,n/30
14-Paid Rose Merchandising in full
- Purchased merchandise from Mabuhay Co. worth P25,000
paying P5,000 cash and for the balance 2/10,n/30.FOB
SHIPPING point
15-Paid the freight on the above purchases P1,250.
- Paid salaries for the first half of the month P6,000.
16-Sold merchandise to Rina Ramos P4,800 costing P3,700
terms 2/10,n/30
17-Cash sales to various cash customers P97,900 The cost of
merchandise was 85,000.
18- Paid the freight on shipment of the above sales P3,450.
- Received a 60-day 6% note from Rina Ramos in settlement
of her account in full.
21- Purchased merchandise on account from Rizal Trading Co.
P26,110 terms 2/10,n/30.
22-Collected the account of D. Tiglao in full.
 -Returned damaged merchandise to Rizal Trading Co worth
P580.A credit memo was received
23- Paid P1,000 to Rizal Trading Co to apply on account
24-Paid the bill of Corona Supply Co. dated May 11.
25-Bought a delivery panel from Universal Motors ,P200,000 t
terms 50%down balance 2/5,n/15.
28-Paid the account with Rizal Trading Co in full.
29-Emilio Lim made an additional investment of P150,000
Cash
30- Paid the account with Universal Motors in full
-Gave a 30-day 6% note to Mabuhay Co in settlement of the
amount due to them.
31- - Paid salaries for the second half of the month P6,000.
Requirements:
1. Prepare Journal entries for the December 2020
transactions
2. Post the transactions in the ledger (Observe running
balance
3. Prepare Trial balance
4. Prepare Financial Statements
5. Prepare closing Entries
6. Prepare Post Closing Trial Balance
7. Make an adjusting Entries
8. Use Perpetual Method
Mtlagrosas 2020
CHART OF ACCOUNTS
ASSETS INCOME
101 CASH ` 401 SALES
102 ACCOUNTS RECEIVABLE 402 SALES RETURN AND ALLOWANCES
103 NOTES RECEIVABLE 403 SALES DISCOUNT
104 MERCHANDISE INVENTORY
105 OFFICE SUPPLIES
106 OFFICE EQUIPMENT EXPENSES
107 DELIVERY EQUIPMENT 501 COST OF GOODS SOLD
LIABILITIES 502 RENT EXPENSES
201 ACCOUNTS PAYABLE 503 FREIGHT OUT
202 NOTES PAYABLE 504 SALARIES EXPENSES

OWNER’S EQUITY
301 EMILIO LIM CAPITAL
302 EMILIO LIM DRAWING 600 INOME SUMMARY
DATE ACCOUNT TITLES AND EXPLANATIONS F Dr. Cr.
May 1 Cash 101 200,000
Emilio Lim Capital 301 200,000
Initial Investment

1 Merchandise inventory 104 13,252.50

Accounts payable 201 13,252.50
Purchased on acct. to Rizal Trading Co10-
5tradediscount ,3/5,2/10,n/30
2 Office equipment 106 41,467.50
Cash 101 41,467.50
Purchased computer &POS on cash td 3-5

3 Cash 101 1,000

Office equipment 106 1,000
Cash refund on minor defects of computer

3 Cash 101 3,350

Sales 401 3,350
Cash sales to Edz Dizon

Cost of goods sold 501 2,780

Merchandise Inventory 104 2,780
Cost of sales

6 Merchandise Inventory 104 22,000

Accounts payable 201 22,000
Purchased merchandise from Rose
Merchandising Terms 2/10,n/30
7 Rent expense 502 4,500
Cash 101 4,500
Paid the rent for the month to LLB Realty

7 Emilio Lim Drawing 302 800

Merchandise Inventory 104 800
Emilio Lim withdrew from the business
merchandise
8 Merchandise Inventory 104 5,500
Notes payable 202 5,500
Purchased merchandise from Cuenca and Sons
and gave a 60-day 6% note P5,500
10 Accounts payable 201 13,252.50
Merchandise Inventory 104 265.05
Cash 101 12,987.45
Paid the account with Rizal Trading Co. in full

10 Sales return and allowances 402 100

Cash 101 100
Cash refund to Edz Dizon

11 Office supplies 105 1,450

Accounts payable 201 1,450
DATE ACCOUNT TITLES AND EXPLANATIONS F Dr. Cr.
MAY 13 Accounts receivable 102 3,500
Sales 401 3,500
Sold merchandise to D. Tiglao on account terms
2/10,n/30
Cost of goods sold 501 2,800
Merchandise Inventory 104 2,800
Cost of sales
14 Accounts payable 201 22,000
Merchandise inventory 104 440
Cash 101 21,560
Paid Rose Merchandising in full

14 Merchandise inventory 104 25,000

Cash 101 5,000
Accounts payable 201 20,000
Purchased merchandise from Mabuhay Co.
worth P25,000 paying P5,000 cash and for the
balance 2/10,n/30.FOB SHIPPING point
15 Merchandise inventory 104 1,250
Cash 101 1,250
Paid the freight on the above purchases

Salaries expense 6,000

Cash 101 6,000
Paid salaries for the first half of the month

16 Accounts receivable 102 4,800

Sales 401 4,800
Sold merchandise to Rina Ramos P4,800
costing P3,700 terms 2/10,n/30
Cost of goods sold 501 3,700
Merchandise inventory 104 3,700
Cost of sales
17 Cash 101 97,900
Sales 401 97,900
Cash sales to various cash customers
Cost of goods sold 501 85,000
Merchandise inventory 104 85,000
Cost of sales
18 Freight out 503 3,450
Cash 101 3,450
Paid the freight on above sales

18 Notes receivable 103 4,800

Accounts receivable 102 4,800
- Received a 60-day 6% note from Rina Ramos
in settlement of her account in full.
DATE ACCOUNT TITLES AND EXPLANATIONS F Dr. Cr.
May 21 Merchandise inventory 104 26,110
Accounts payable 201 26,110
Purchased merchandise on account from Rizal
Trading Co.P26,110 terms 2/10,n/30.
22 Sales discount 403 70
Cash 101 3,430
Accounts receivable 102 3,500
Collected the account of D. Tiglao in full.

Accounts payable 201 580

Merchandise inventory 104 580
-Returned damaged merchandise to Rizal Trading Co
worth P580.A credit memo was received
23 Accounts payable 201 1,000
Cash 101 1,000
Paid to Rizal Trading Co to apply on account

24 Accounts payable 201 1,450

Cash 101 1,450
Paid the bill of Corona Supply Co.

25 Delivery equipment 107 200,000

Cash 101 100,000
Accounts payable 201 100,000
-Bought a delivery panel from UniversalMotors
terms 50%down balance 2/5,n/15.
28 Accounts payable 201 24,530
Cash 101 24,019.40
Merchandise inventory 104 510.60
Paid the account with Rizal Trading Co in full.

29 Cash 101 150,000

Emilio Lim Capital 301 150,000
Additional investment
30 Accounts payable 201 100,000
Delivery equipment 107 2,000
Cash 101 98,000
Paid the account with Universal Motors in full

30 Accounts payable 201 20,000

Notes payable 202 20,000
Gave a 30-day 6% note to Mabuhay Co in settlement
of the amount due to them
31 Salaries expense 6,000
Cash 101 6,000
Paid salaries for the first half of the month

TOTAL 1,102,822.50 1,102,822.50

GENERAL LEDGER :Account Number101 Account title :Cash
DATE F Dr. Cr. Balance Balance
EXPLANATION Dr. Cr.
May 1 Initial Investment GJ1 200,000 200,000
2 Purchased computer &POS GJ1 41,467.50 158,532.50
on cash td 3-5
3 Cash refund on minor GJ1 1,000 159,532.50
defects of computer
3 Cash sales to Edz Dizon GJ1 3,350 162,882.50
7 Paid the rent for the month GJ1 4,500 158,382.50
to LLB Realty
10 Paid the account with Rizal GJ1 12,987.45 145.395.05
Trading Co. in full
10 Cash refund to Edz Dizon GJ1 100 145,295.05
14 Paid Rose Merchandising in GJ2 21,560 123,735.05
full
14 Purchasedmerchandise from GJ2 5,000 118,735.05
Mabuhay w/down payment
bal.on account
15 Paid the freight on the GJ2 1,250 117,485.05
above purchases
15 Paid salaries for the first half GJ2 6,000 111,485.05
of the month
17 Cash sales to various cash GJ2 97,900 209,385.05
customers
18 Paid the freight on above GJ2 3,450 205,935.05
sales
22 Collected the account of D. GJ3 3,430 209,365.05
Tiglao in full.
23 Paid to Rizal Trading Co to GJ3 1,000 208,365.05
apply on account
24 Paid the bill of Corona GJ3 1,450 206,915.05
Supply Co.
25 -Bought a delivery panel GJ3 100,000 106,915.05
from UniversalMotors terms
50%down balance 2/5,n/15.
28 Paid the account with Rizal GJ3 24,019.40 82,895.65
Trading Co in full.
29 Additional investment GJ3 150,000 232895.65
30 Paid the account with GJ3 98,000 134,895.65
Universal Motors in full
31 Paid salaries for the first half GJ3 6,000 128,895.65
of the month

Account Number:102 Account title :Accounts receivable

DATE EXPLANATION F DR. Cr. Balance Balance
MA 13 Sold merchandise to D. Dr. Cr.
Y Tiglao on account terms
2/10,n/30 GJ2 3,500 3,500
16 Sold merchandise to Rina
Ramos P4,800 costing
P3,700 terms 2/10,n/30 GJ2 4,800 8,300
18 Received a 60-day 6% note
from Rina Ramos in
 settlement of her account in
full. GJ2 4,800 3,500
22 Collected the account of D.
Tiglao in full. GJ3 3,500 0

Account Number:103 Account title :Notes receivable

DATE EXPLANATION F Dr. Cr. Balance Balance
MAY 1 - Received a 60-day 6% GJ2 Dr. Cr.
8 note from Rina Ramos in
settlement of her account
in full. 4,800
4,800

Account Number:104 Account title :MERCHANDISE INVENTORY

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
MAY 1 Purchased on acct. to Rizal GJ1 13,252.50 13,252.50
TradingCo.td10-5 ,
3/5,2/10,n/30
3 Cost of sales GJ1 2,780 10,472.50
6 Purchased merchandise from GJ1 22,000 32,472.50
Rose Merchandising Terms
2/10,n/30
7 Emilio Lim withdrew GJ1 800 31,672.50
merchandise from the
business
8 Purchased merchandise from GJ1 5,500 37,172.50
Cuenca and Sons and gave a
60-day 6% note P5,500
10 Paid the account with Rizal GJ1 265.05 36,907.45
Trading Co. in full
13 Cost of sales GJ2 2,800 34,107.45
14 Paid Rose Merchandising in GJ2 440 33,667.45
full
14 Purchased merchandise from GJ2 25,000 58,667.45
Mabuhay Co
15 Paid the freight on the above GJ2 1,250 59,917.45
purchases
16 Cost of sales GJ2 3,700 56,217.45
17 Cost of sales GJ2 85,000 (28,782.55
)
21 Purchased merchandise on GJ3 26,110 (2,672.55)
account from Rizal Trading
22 Returned damaged GJ3 580 (3,252.55)
merchandise to Rizal Trading
Co worth
28 Paid the account with Rizal GJ3 510.60 (3,763.15)
Trading Co in full.
Account Number:105 Account title :OFFICE SUPPLIES
DATE EXPLANATION F Dr. Dr. Balance Balance
Dr. Cr.
May 11 Corona Supply Co. sent a bill for GJ1 1,450 1,450
the supplies purchased on
credit

Account Number:106 Account title :Office EQUIPMENT

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
May 2 Purchased computer &POS on GJ1 41.467.50 41,467.50
cash td 3-5
3 Cash refund on minor defects of GJ1 1,000 40,467.50
computer

Account Number:107 Account title :Delivery EQUIPMENT

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr
May 25 -Bought a delivery panel from GJ3 200,000 200,000
UniversalMotors terms
50%down balance 2/5,n/15.
30 Paid the account with GJ3 2,000 198,000
Universal Motors in full

Account Number:201 Account title :ACCOUNTS PAYABLE

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr
May 1 Purchased on acct. to Rizal GJ1 13,252.50 13,252.50
Trading Co10-5tradediscount ,
3/5,2/10,n/30
6 Purchased merchandise from GJ1 22,000 35,252.50
Rose Merchandising Terms
2/10,n/30
1 Paid the account with Rizal GJ1 13,252.50 22,000
0 Trading Co. in full
1 Corona Supply Co. sent a bill GJ1 1,450 23,450
1 for the supplies purchased on
credit
1 Paid Rose Merchandising in GJ2 22,000 1,450
4 full
1 Purchased merchandise from GJ2 20,000 21,450
4 Mabuhay Co
2 Purchased merchandise on GJ3 26,110 47,560
1 account from Rizal Trading
Co.P26,110 terms 2/10,n/30.
2 -Returned damaged GJ3 580 46,980
2 merchandise to Rizal Trading
Co worth P580.A credit memo
was received
2 Paid to Rizal Trading Co to GJ3 1,000 45,980
 3 apply on account
2 Paid the bill of Corona Supply GJ3 1,450 44,530
4
2 -Bought a delivery panel from GJ3 100,000 144,530
5 UniversalMotors terms
50%down balance 2/5,n/15.
2 Paid the account with Rizal GJ3 24,530 120,000
8 Trading Co in full.
3 Paid the account with GJ3 100,000 20,000
0 Universal Motors in full
3 Gave a 30-day 6% note to GJ3 20,000 0
0 Mabuhay Co in settlement of
the amount due to them

Account Number:202 Account title :NOTES PAYABLE

DATE EXPLANATION F Dr Cr. Balance Balance
Dr. Cr.
May 8 Purchased merchandise from GJ1 5,500 5,500
Cuenca and Sons and gave a 60-
day 6% note P5,500
3 Gave a 30-day 6% note to GJ3 20,000 25,500
0 Mabuhay Co in settlement of
the amount due to them

Account Number:301 Account title :EMILIO LIM CAPITAL

DATE EXPLANATION F Dr Cr. Balance Balance
Dr. Cr.
May 1 Initial Investment GJ1 200,000 200,000
29 Additional investment GJ3 150,000 350,000
31 Closing GJ4 4,850 345,150
31 Closing GJ4 800 344,350

Account Number:302 Account title :EMILIO LIM DRAWING

DATE EXPLANATION F Dr Cr. Balance Balance
Dr. Cr.
May 7 Emilio Lim withdrew GJ1 800 800
merchandise from the business
31 Closing 800 0

Account Number:401 Account title :SALES

DATE EXPLANATION F Dr Cr Balance Balance
Dr. Cr.
May 3 Cash sales to Edz Dizon GJ1 3,350 3,350
13 Sold merchandise to D. Tiglao GJ2 3,500 6,850
on account terms 2/10,n/30
16 Sold merchandise to Rina GJ2 4,800 11,650
Ramos P4,800 costing P3,700
terms 2/10,n/30
17 Cash sales to various cash GJ2 97,900 109,550
customers
31 Closing entry GJ4 109,550 0
Account Number:402 Account title :SALES RETURNS AND
ALLOWANCES
DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
MAY 10 Cash refund to Edz Dizon GJ1 100 100
31 Closing GJ4 100 0

Account Number:403 Account title :SALES DISCOUNT

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
May 2 Collected the account of D. GJ3 70 70
2 Tiglao in full.
3 Closing GJ4 70 0
1

Account Number:501 Account title :COST OF GOODS SOLD

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
May 3 Cost of sales GJ1 2,780 2,780
13 Cost of sales GJ2 2,800 5,580
16 Cost of sales GJ2 3,700 9,280
17 Cost of sales GJ2 85,000 94,280
31 Closing GJ4 94,280 0

Account Number:502 Account title :RENT EXPENSES

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
May 7 Paid the rent for the month to Gj1 4,500 4,500
LLB Realty
31 Closing 4,500 0

Account Number:503 Account title :FREIGHT OUT

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
May 18 Paid the freight on above sales GJ2 3,450 3,450
31 Closing GJ4 3,450 0

Account Number:504 Account title :SALARIES EXPENSES

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
May 15 Paid salaries for the first half of GJ1 6,000 6,000
the month
 31 Paid salaries for the second GJ3 6,000 12,000
half of the month
31 Closing GJ4 12,000 0

Account Number:504 Account title :income summary

DATE EXPLANATION F Dr. Cr. Balance Balance
Dr. Cr.
May 31 Closing GJ 109,380 109,380
4
31 Closing GJ 114,23 4,850
4 0
31 Closing GJ 4,850 0
4

ULTRA TRADING
TRIAL BALANCE
MAY 31,2020
Dr. Cr.
101 CASH 128,895.65
103 NOTES RECEIVABLE 4,800
104 MERCHANDISE INVENTORY (3,763.15)
105 OFFICE SUPPLIES 1,450
106 OFFICE EQUIPMENT 40,467.50
107 DELIVERY EQUIPMENT 198,000
202 NOTES PAYABLE 25,500
301 EMILIO LIM CAPITAL 350,000
302 EMILIO LIM DRAWING 800
401 SALES 109,550
402 SALES RETURNS AND ALLOWANCES 100
403 SALES DISCOUNTS 70
501 COST OF GOODS SOLD 94,280
502 RENT EXPENSES 4,500
503 FREIGHT OUT 3,450
505 SALARIES EXPENSES 12,000
TOTAL 485,050 485,050

ULTRA TRADING
STATEMENT OF PERFORMANCE
FOR THE MONTH ENDED MAY 31,2020
SALES 109,550
Less: SALES RETURNS AND ALLOWANCES 100
SALES DISCOUNTS 70 170
NET SALES 109,380
Less: COST OF GOODS SOLD 94,280
GROSS PROFIT 15,100
Less Operating expenses
RENT EXPENSES 4,500
FREIGHT OUT 3,450
SALARIES EXPENSES 12,000
 Total OPEX 19,950
Net( loss) (4,850)

ULTRA TRADING
STATEMENT OF OWNER’S EQUITY
FOR THE MONTH ENDED MAY 31,2020
EMILIO LIM Initial investment 200,000
Add: Additional Capital 150,000
Net income (loss) (4,850) 145,150
Total 345,150
Less: Emilio Lim Drawing 800
EMILIO LIM ,ENDING CAPITAL 344,350

ULTRA TRADING
STATEMENT OF FINANCIAL POSITION
AS OF MAY 31,2020
ASSETS
CURRENT ASSETS
CASH ANS CASH EQUIVALENTS 128,895.65
RECEIVABLES 4,800
INVENTORIES (3,763.15)
PREPAID EXPENSES 1,450
Total Current Assets 131,382.50

Non Current Assets

Property , Plant and Equipment 238,467.50
TOTAL ASSETS 369,850

LIABILITIES AND OWNER’S EQUITY

CURRENT LIABILITIES
ACCOUNTS PAYABLE 0
NON CURRENT LIABILITIES
NOTES Payable 25,500
TOTAL LIABILITIES 25,500
OWNER’S EQUITY
EMILIO LIM CAPITAL 344,350
TOTAL LIABILITIES AND OWNER’S EQUITY 369,850
 ULTRA TRADING
STATEMENT OF CASH FLOW
AS OF MAY 31,2020
CASH FLOW FROM OPERATING ACTIVITIES
Cash Received from:
Sales 101,250
Receivable Collection 3,430
Refund from Purchases 0
Payment for:
Office supplies (1,450)
Freight on goods sold (3,450)
Goods bought (64,566.85)
Operating expenses (16,500)
Refund to customers (100)
Freight on purchases (1,250)
Net Cash flow from operating activities (17,363.15)
CASH FLOW FRON INVESTING ACTIVITIES
Computer Equipment Bought (40,467.50)

CASH FLOW FROM FINANCINGACTIVITIES

INITIAL INVESTMENT 200,000
BORROWINGS 0
DRAWING 800
Net Cash flow from financing activities 199,200

INCREASE IN CASH AND CASH EQUIVALENT 128,895.65

Add:Cash and cash equivalent beginning
CASH AND CASH EQUIVALENT,May 31 ,2020 128,895.65

ULTRA TRADING
POST CLOSING TRIAL BALANCE
AS OF MAY 31,2020
ACCT NO.
101 CASH AND CASH EQUIVALENTS 128,895.65
103 RECEIVABLES 4,800
104 INVENTORIES (3,763.15)
105 PREPAID EXPENSES 1,450
106 Property , Plant and Equipment 238,467.50
202 NOTES Payable 25.500
301 EMILIO LIM CAPITAL 344,350
369,850 369,850

ULTRA TRADING
CLOSING ENTRIES
AS OF MAY 31,2020
MAY 31 SALES 109,550
INCOME SUMMARY 109,380
SALES RETURNS AND ALLOWANCES 100
SALES DISCOUNT 70
To close sales
31 INCOME SUMMARY 114,230
COST OF GOODS SOLD 94,280
RENT EXPENSES 4,500
FREIGHT OUT 3,450
SALARIES EXPENSE 12,000
To close expenses
31 EMILIO LIM CAPITAL 4,850
INCOME SUMMARY 4,850
To close income
31 EMILIO LIM CAPITAL 800
EMILIO LIM DRAWING 800
To close withdrawals
1. Assume that on January 1,2020 insurance premium paid for three (3) years was
P21,600.Payment was debited to an asset account Prepaid insurance and Cash
credited . Give the adjusting entries for March only.

2. On May 11,2020 Ultra Trading purchased office supplies on credit P1,450 . It was
recorded with a debit account of Office Supplies and credited to the liability account
of Account Payable. At the end of May there was an estimated supplies on hand of
P 500. Provide the adjusting entry at the end of the month

3. Assume that the business owns a building for rent . It was rented on November
1,2019 to a tenant who immediately paid P30,000 corresponding to six months rent
up to May 2020 . It was recorded to an asset account of Cash and a liability account
of Unearned Rent Give the adjusting entries for December 2019

1 2 3
Date of the March 31 May 31 December31
adjusting entry
Debit Account title Insurance expense Office supplies used Unearned rent
Credit Account title Prepaid insurance Office supplies Rent income
Dr. and Cr. amount 600 950 10,000