Harold King Trading

Unadjusted Trial Balance

December 31, 2020

Account Titles Debit

Cash in Bank 980,000
Cash on Hand 20,500
Accounts Receivable 120,000
Allowance for Bad Debts
Notes Receivable 100,000
Merchandise Inventory, Jan 1, 2020 500,000
Prepaid Interest 7,500
Land 1,000,000
Building 2,000,000
Store Equipment 140,000
Accumulated Depreciation, Store Equipment
Office Furniture & Fixtures 200,000
Accumulated Depreciation, Office Furniture & Fix.
Accounts Payable
VAT Payable
Unearned Rent Revenue
Notes Payable
Loans Payable (2 year-loan dated December 1, 2020)
King, Capital
King, Personal 120,000
Sales
Sales Discount 49,800
Sales Returns and Allowances 6,000
Purchases 3,180,000
Purchase Discounts
Purchase Returns & Allowances
Freight In 70,000
Freight Out 40,000
Sales Salaries Expense 585,000
Office Salaries Expense 624,000
Store Supplies Expense 20,000
Office Supplies Expense 15,000
Store Utilities Expense 84,000
Office Utilities Expense 60,000
Total 9,921,800
Additional information on 31 December 2020
a) Merchandise on hand on December 31, 2020 amounts to P855,000.
b) Store Supplies and Office Supplies used during 2020 amounts to P18,000 and P12,000, respectively.
 c) Store Equipment were all acquired last yeat and is estimated to be usefull for 7 years with estimated
salvage value of 20% of the cost.
d) Office Furniture has an estimated useful life of 10 years with salvage value of 25% of cost.
The building was constructed last year and the business started occupying it on January 1 this year. The
e) store occupies 60% of the space, the rest are offices. It will be used for 25 years with estimated salvage
value of P50,000.

The business lease out a small portion of the land for P20,000 per month, paid in advance for 12
f) months, starting March 1, 2020.

g) Acrrued salaries on December 31, 2020: Sales Slaries, P3,750 and Office Salaries, P4,000.
h) The Loan Payable is a 2-year promissory note dated 01 December 2020 with 6% interest payble when
the principal is due.
i) The Notes Paybale is a 90-day note discounted on 16 November 2020 at Union Bank at 6%.
j) A customer's note for P100,000 was received in settlement of an account on 16 December 2020. This
note is a 60-day, 6% note
Allowance for Bad Debts should 10% of Accounts Receivable. Bad Debts is treated as administrative
k) expense.

Required:
1) Ten-Column Worksheet
2) Financial Statements:
a) Muliti-step Income Statement
b) Statement of Owners' Equity
c) Classified Statement of Financial Position, Report Form
3) Adjusting and Closing Entries
4) Post-closing Tial Balance
5) Reversing Entries
 Credit

8,000

32,000.00

30,000
620,400
140,000
240,000
500,000
2,500,000
777,000

4,980,800

63,600
30,000

9,921,800 -

d P12,000, respectively.
or 7 years with estimated

f 25% of cost.
on January 1 this year. The
ears with estimated salvage

aid in advance for 12

ries, P4,000.
h 6% interest payble when

on Bank at 6%.
n 16 December 2020. This

eated as administrative
 Ha
10-
For the y
Unadjusted Trial Balance
Account Titles Debit
Cash in Bank 980,000
Cash on Hand 20,500
Accounts Receivable 120,000
Allowance for Bad Debts
Notes Receivable 100,000
Merchandise Inventory, Jan 1, 2020 500,000
Prepaid Interest 7,500
Land 1,000,000
Building 2,000,000
Store Equipment 140,000
Accumulated Depreciation, Store Equipment
Office Furniture & Fixtures 200,000
Accumulated Depreciation, Office Furniture & Fix.
Accounts Payable
VAT Payable
Unearned Rent Revenue
Notes Payable
Loans Payable (2 year-loan dated December 1, 2020)
King, Capital
King, Personal 120,000
Sales
Sales Discount 49,800
Sales Returns and Allowances 6,000
Purchases 3,180,000
Purchase Discounts
Purchase Returns & Allowances
Freight In 70,000
Freight Out 40,000
Sales Salaries Expense 585,000
Office Salaries Expense 624,000
Store Supplies Expense 20,000
Office Supplies Expense 15,000
Store Utilities Expense 84,000
Office Utilities Expense 60,000
9,921,800
Store Supplies
Office Supplies
Depreciation Expense-SE
Depreciation Expense-OFF
Depreciation Expense-Building
Accumulated Depreciation-Building
Rent Revenue
Salaries Payable
Interest Expense
Interest Payable
Interest Receivable
Interest Income
Bad Debt Expense
Income Summary
 Harold King Trading
10-Column Worksheet
For the year ended, Dec 31, 2020
adjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement
Credit Debit Credit Debit Credit Debit
980,000
20,500
120,000
8,000 4,000 12,000
100,000
855,000 500,000 855,000
3,750 3,750
1,000,000
2,000,000
140,000
32,000.00 16,000 48,000
200,000
30,000 15,000 45,000
620,400 620,400
140,000 140,000
240,000 200,000 40,000
500,000 500,000
2,500,000 2,500,000
777,000 777,000
120,000
4,980,800 4,980,800
49,800 49,800
6,000 6,000
3,180,000 3,180,000
63,600 63,600
30,000 30,000
70,000 70,000
40,000 40,000
3,750 588,750 588,750
4,000 628,000 628,000
2,000 18,000 18,000
3,000 12,000 12,000
84,000 84,000
60,000 60,000
9,921,800
2,000 2,000
3,000 3,000
16,000 16,000 16,000
 15,000 15,000 15,000
156,000 156,000 156,000
156,000 156,000
200,000 200,000
7,750 7,750
16,250 16,250 16,250
12,500 12,500
250 250
250 250
4,000 4,000 4,000
500,000 855,000 (355,000) (355,000)
1,775,250 1,775,250 10,133,300 10,133,300 4,588,800
685,850
5,274,650
Income Statement Statement of Financial Position
Credit Debit Credit
980,000
20,500
120,000
12,000
100,000
855,000
3,750
1,000,000
2,000,000
140,000
48,000
200,000
45,000
620,400
140,000
40,000
500,000
2,500,000
777,000
120,000
4,980,800

63,600
30,000

2,000
3,000
 156,000
200,000
7,750

12,500
250
250

5,274,650 5,544,500 4,858,650

685,850
5,274,650 5,544,500 5,544,500
 HAROLD KING TRADING
INCOME STATEMENT
For the year ended, December 31, 2020
In Philippine Peso
Notes
Net Sales 1 4,925,000.00
Less: Cost of Sales 2 (2,801,400.00)
Gross Income/ Profit 2,123,600.00
Operating Expenses:
Selling and Distribution Expense 3 (840,350.00)
Administrative Expense 4 (781,400.00)
Operating Income/ Profit 501,850.00
Other Income 5 200,250.00
Interest Expense (16,250.00)
Net income/ Profit 685,850.00

Note 1:
Gross Sales
Less: Sales Returns and Allowances 6,000
Sales Discount 49,800
Net Sales

Note 2:
Merchandise Inventory, Beginning
Add: Net Purchases:
Gross Purchases 3,180,000.00
Add: Freight-In 70,000.00
Cost of Goods Delivered 3,250,000.00
Less: Purchase Returns and Allowances 63,600.00
Purchase Discount 30,000.00 93,600.00
Cost of Goods Available for Sale
Less: Merchandise Inventory, End
Cost of Sales/ Cost of Goods Sold

Note 3: Selling and Distribution Expense

Freight-Out 40,000.00
Sales Salaries Expense 588,750.00
Store Utilities Expense 84,000.00
Depreciation Expense-SE 16,000.00
Store Supplies Expense 18,000.00
Depreciation Expense-Building (60%) 93,600.00
Total Selling and Distribution Expense 840,350.00

Note 4: Administrative Expense

Office Salaries Expense 628,000.00
Office Supplies Expense 12,000.00
Office Utilities Expense 60,000.00
Depreciation Expense-OFF 15,000.00
Depreciation Expense-Building (40%) 62,400.00
Bad Debts Expense 4,000.00
Total Administrative Expense 781,400.00

Note 5: Other Income

Rent Revenue 200,000.00
Interest Income 250.00
Other Income 200,250.00

Harold King Trading

Statement of Changes in Owner's Equity
For the year ended, December 31, 2017
In Philippine Peso

King, Capital Beginning 777,000.00

Add: Investments -
Net income 685,850.00 685,850.00
Total 1,462,850.00
Less: Drawings (120,000.00)
King, Capital End 1,342,850.00

Villar Trading
Statement of Financial Position
As of December 31, 2017

ASSETS
Current Assets:
Cash Note 6 1,000,500.00
Trade and Other Receivables Note 7 208,250.00
Merchandise Inventory 855,000.00
Prepayments Note 8 8,750.00
Total Current Assets 2,072,500.00

Non-Current Assets:
Property, Plant and Equipment Note 9 3,091,000.00
TOTAL ASSETS 5,163,500.00

LIABILITIES AND OWNER'S EQUITY

LIABILITIES
Current Liabilities:
Trade and Other Payables Note 10 1,320,650.00
Non-Current Liabilities:
Loans Payable 2,500,000.00
TOTAL LIABILITIES 3,820,650.00
OWNER'S EQUITY
King, Capital 1,342,850.00
TOTAL LIABILITIES AND OWNER'S EQUITY 5,163,500.00

Note 6
Cash on Hand 20,500.00
Cash in Bank 980,000.00
Cash 1,000,500.00

Note 7
Trade Receivables:
Accounts Receivable 120,000.00
Allowance for Bad Debts (12,000.00)
Net Realizable Value 108,000.00
Other receivables:
Notes Receivable 100,000.00
Interest Receivable 250.00
Trade and other receivables 208,250.00

Note: 8 Prepayments
Prepaid Interest 3,750.00
Office Supplies 3,000.00
Store Supplies 2,000.00
Total Prepayments 8,750.00

Note 9: Property, Plant and Equipment

Land 1,000,000
Store Equipment 140,000
Accumulated Depreciation-SE -48,000
Office Furniture & Fixtures 200,000
Accumulated Depreciation- F&F -45,000
Building 2,000,000
Accumulated Depreciation- Land -156,000
Net Book Value 3,091,000.00

Note 10: Trade and Other Payables

Trade:
Accounts Payable 620,400.00
Others:
Interest Payable 12,500.00
Salaries Payable 7,750.00
Unearned Rent Revenue 40,000.00
Notes Payable 500,000.00
VAT Payable 140,000.00 700,250.00
Trade and Other Payables 1,320,650.00
 4,980,800

55,800.00
4,925,000.00

500,000.00

3,156,400.00
3,656,400.00
(855,000.00)
2,801,400.00
 General Journal
Date Particulars F Debit
Dec 31, 2020 Income Summary 500,000.00
Merchandise Inventory

Merchandise Inventory 855,000.00

Income Summary

Store Supplies 2,000.00

Store Supplies Expense

Office Supplies 3,000.00

Office Supplies Expense

Depreciation Expense 16,000.00

Accumulated Depreciation- Store Equipment

Depreciation Expense 15,000.00

Accumulated Depreciation- Office Furnitures & Fixtures

Depreciation Expense 156,000.00

Accumulated Depreciation- Building

Unearned Rent Revenue 200,000.00

Rent Revenue

Sales Salaries Expense 3,750.00

Office Salaries Expense 4,000.00
Salaries Payable

Interest Expense 12,500.00

Interest Payable-Loans

Interest Expense 3,750.00

Prepaid Interest

Interest Receivable 250.00

Interest Income

Bad Debt Expense 4,000.00

Allowance for Bad Debts

CLOSING JOURNAL ENTRIES

December 31, 2020 Sales 4,980,800.00

Purchase Return & Allowances 63,600.00
Purchase Discounts 30,000.00
Rent Revenue 200,000.00
Interest Income 250.00
Income Summary

Income Summary 4,943,800.00

Sales Discount
Sales Returns and Allowances
Purchases
Freight In
Freight Out
Sales Salaries Expense
Office Salaries Expense
Store Supplies Expense
Office Supplies Expense
Store Utilities Expense
Office Utilities Expense
Depreciation Expense-SE
Depreciation Expense-OFF
Depreciation Expense-Building
Interest Expense
Bad Debt Expense

Income Summary 763,850

King, Capital

King, Capital 120,000

King, Personal
Credit

500,000.00

855,000.00

2,000.00

3,000.00

16,000.00

15,000.00

156,000.00

200,000.00

7,750.00

12,500.00

3,750.00

250.00

4,000.00

Income Summary
500,000.00 855,000.00
 4,943,800.00 5,274,650.00
5,443,800.00 6,129,650.00
685,850.00
5,274,650.00

49,800.00
6,000.00
3,180,000.00
70,000.00
40,000.00
588,750.00
628,000.00
18,000.00
12,000.00
84,000.00
60,000.00
16,000.00
15,000.00
156,000.00
16,250.00
4,000.00

VILLAR CAPITAL
763,850 120,000.00 777,000.00
685,850.00
120,000.00 1,462,850.00
120,000 1,342,850.00
 Harold King Trading
Post-Closing Trial Balance
December 31, 2020
Debit Credit
Cash on Hand 20,500.00
Cash in Bank 980,000.00
Accounts Receivable 120,000.00
Allowance for Bad Debts 12,000.00
Notes Receivables 100,000.00
Interest Receivable 250.00
Merchandise Inventory 855,000.00
Prepaid Interest 3,750.00
Office Supplies 3,000.00
Store Supplies 2,000.00
Building 2,000,000.00
Accumulated Depreciation-Building 156,000.00
Land 1,000,000.00
Store Equipment 140,000.00
Accumulated Depreciation-SE 48,000.00
Office Furniture & Fixtures 200,000.00
Accumulated Depreciation-OFF 45,000.00
Accounts Payable 620,400.00
Interest Payable 12,500.00
Salaries Payable 7,750.00
Unearned Rent Revenue 40,000.00
VAT Payable 140,000.00
Notes Payable 500,000.00
Loan Payable 2,500,000.00
King, Capital 1,342,850.00
5,424,500.00 5,424,500.00
 General Journal
Date Particulars F Debit Credit
January 1, 2020 Store Supplies Expense 2,000.00
Store Supplies 2,000.00

Office Supplies Expense 3,000.00

Office Supplies 3,000.00

Rent Revenue 200,000.00

Unearned Rent Revenue 200,000.00

Salaries Payable 7,750.00

Sales Salaries Expense 3,750.00
Office Salaries Expense 4,000.00

Interest Payable 12,500.00

Interest Expense 12,500.00

Prepaid Interest
Interest Expense 3,750.00
3,750.00
Interest Income 250.00
Interest Receivable 250.00