NAME: SCORE:

il
.SECTION: PROFESSOR: il
.l

Problem #27
Comprehensive Problem

The account balances of the C. Castro Company as at Dec. 1,2006 are listed below:

110 Cash P 214,000 i

120 AccountsReceivable 33 8,000 ;,

130 Merchandiselnventory 426,000

140 Office Supplies 31,000
150 Prepaid Insurance 48,000
160 Land 370;0c0
170 Building 900,000
175 Accumulated Depreciation-Building P 2s0,000
180 Equiprnent 800,000
185 r\ccumulated Depreciation-Equipment 200,000
210 Accounts Payable 172.0t)0
230 Mortgage Payable 1,200,000
310 Castro, Capital I

P3,127,000 P3,127,000

The fbllowing transactions occurred during the month of'December 2006,

Dec 1
I Settled accounts payable of F115,000 lessZYc discount.
3 Collected acgounts receivable of P I 80,000 less 3% discount.
4 Sold merchandise on account to A. Pural Supplies, P210,000. Tertns
FOB destination; 3/i0, ni30.
p les,
7 Purchased merchandise from Naga l)roducts,P232,000. Terms: ]rOB
. shipping point; 2110,n130.
9 Returned goods to Naga Products, P12,000 acquired last Dec. 7.
t0 Paid monthly interest on mortgage payable, P8,000.
ll Received payment from A. Pural Supplies for the amount due.
fr Paid freight charges on the Dec. 4 shipment, P13,000.
l3 Paid Naga Products for the merchandise purchased on Dec. 7 less
returns and discounts.
l4 Sold merchandise to Ruiz Shoppers, P330,000. Terms: F'OB shipping
point; 3110, n130.
l4 Paid freight charges of P6,000 for the merchandise acquired from Naga
Products last Dec. 7.
l5 Paid salaries, P74,000.
l8 Purchased merchandise on account from Oquendo Trading, P113,000.
Terms: FOB shipping poing 2110.n130.
l8 Acquired office supplies for cash, P9,000.
l9 Received payment from Rrriz Shoppers for the Dec. 14 transaction less
discounts. ' I

40s
 2A Returned P8,000 of the merchandise purchased on Dec. l8 from
Oquendo Trading. I hrAruil
Paid representation expense, P3,000.
I sEcl
21
23 Sold merchandise to Pimentsl Shop, P242,000. TErms; FOB shipping
point; 3/10, n130. Proble
24 Paid Oquendo Trading for merchandise purchased on Dec. I8 less
Compr
returns and discounts.
26 Paid P9,000 for representation e;Kpense. Listed I
28 Paid freight charges on the merchandise purchased from Oquendo
'frading on Dec. 18, P4,000.
lt0
29 Purchased merchandise on account from Nueva Wholesale Company, t20
P540,000. Terms: 30Yotradediscount; FOB Destination; 3110, n/30 r30
29 Received from Pimentel returned merchandise in the amount of 140
P18,000 fi'om the sale of Dec. 23. 150
30 Paid P19,000 for repairs on the equipmerrt. l6c
31 Mr. Castro withdrerv P170,000 from the business. t70
175
180
Required:
185
1 . Posl the Dec. I ,2A06 account batances to the ledger accounts. Refer to the following 210
list of accounts in addition to the accounts in the trial baiance: Salaries Payable (220): 220
2_a0
Castro, Withdrarvals (320); Incorne Summary (330); Sales (410); Sales Returns and
310
Allowances (a2$; Sales Discounts (430); Purchases (510); Purchases Returns and
320
Allowances (520); Purchases Discounts (530); Transportation In (5a0); Salaries 330
Expense (610); Office Supplies Expense (620); Insurance Expense (630); 4t0
Depreciation Expense-Building (6a0); Depreciation Expense-Equipment (650)l 420
Transportation Out (650): Representation Expense (670); Repairs Expense (680); and +3V
Interest Expense (690). 5r0
520
2. Itecord the transactions for the month of December in a journal and post the 530
transactions to the ledger. ' 540
3. Prepare the ngr
620
a. Salaries in the amount of P73,000 have accrued on Dec. 3l . 630
b. lnsurance coverage with prerniums of P2,000 has expired at month-end. 640
c. Depreciation on the building and on.the equipment for the month amounted 650
to P3,000 and P4,500, respectively. 660

d. Office sr.rpplies on hand at month-end amounted to P7,000. 670

680
e. A count of the inventory amounted to P653,000 on Dec. 31, 2006.
690

4. Prepare an income statement and a statement of changes in equity for the month
ended Dec. 3 l, 2006 and a balance sheet as at Dec. 3 1, 2006.
Duripg
5. Prepare the adjusiing and closing entries for the mottth.
Feb. I
6. Post the adjusting and closing entries to the ledger accounts.
2
4

406