I. a.

) Adjusting Journal Entries

1. Merchandise Inventory – end 1,650,620

Income & Expense Summary 1,650,620

2. Interest Receivable 1,800

Interest Income (12% x 60,000 x 3/12) 1,800

3. Prepaid Insurance 12,000

Insurance Expense 12,000

4. Unused Supplies 4,850

Office Supplies Expense 4,850

5. Dep’n. – Delivery Equipment 50,000

Accum. Dep’n. – Delivery Equipment 50,000

6. Dep’n. – Store Equipment 15,000

Accum. Dep’n. – Store Equipment 15,000

7. Dep’n. – Office Equipment 10,000

Accum. Dep’n. – Office Equipment 10,000

8. Sales Salaries 10,000

Office Salaries 5,000
Rent Expense 10,000
Advertising Expense 3,000
Accrued Expense Payable 28,000

9. Impairment Loss (1% x 3,760,600) 37,606

Allowance for Impairment Loss 37,606
b. 10 – Column Worksheet

Superb Appliances Store

Worksheet
For the Year Ended December _________
                     
  Trial Balance Adjustments Adjusted T/B Income Statement Balance Sheet
Accounts Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash P 277,830 P P P P277,830 P P P P277,830 P
Notes Receivable 60,000 60,000 60,000
Accounts Receivable 275,000 275,000 275,000
Allowance for Impairment Loss 2,000 9) 37,606 39,606 39,606
Merchandise Inventory – Beg. 1,578,650 1,578,650 1,578,650
Delivery Equipment 500,000 500,000 500,000
Accum. Dep’n.–Del. Equipment 50,000 5) 50,000 100,000 100,000
Store Equipment 150,000 150,000 150,000
Accum. Dep’n. – Store Equipment 15,000 6) 15,000 30,000 30,000
Office Equipment 50,000 50,000 50,000
Accum. Dep’n.–Office Equipment `10,000 7) 10,000 20,000 20,000
Accounts Payable 976,450 976,450 976,450
Notes Payable 100,000 100,000 100,000
C. Kat Capital 1,503,945 1,503,945 1,503,945
C. Kat Drawing 60,000 60,000 60,000
Sales 3,760,600 3,760,600 3,760,600
Sales Returns & Allowances 37,500 37,500 37,500
Sales Discount 50,650 50,650 50,650
Purchases 2,625,250 2,625,250 2,625,250
Purchase Returns & Allowances 26,250 26,250 26,250
Purchase Discount 39,160 39,160 39,160
Transportation – in 60,250 60,250 60,250
                     
Sales Salaries 215,675 8) 10,000 225,675 225,675
Advertising Expense 33,000 8) 3,000 36,000 36,000
Commission Expense 75,250 75,250 75,250
Delivery Expense 112,500 112,500 112,500
Miscellaneous Expense 12,450 12,450 12,450
Office Salaries Expense 125,900 8) 5,000 130,900 130,900
Rent Expense 110,000 8) 10,000 120,000 120,000
Insurance Expense 24,000 3) 12,000 12,000 12,000
Office Supplies Expense 22,250 4) 4,850 17,400 17,400
Taxes & Licenses 10,250 10,250 10,250
Misc. General Expense 6,200 6,200 6,200
Interest Income 1,200 2) 1,800 3,000 3,000
Interest Expense 12,000 12,000 12,000
TOTALS P 6,484,605 P 6,484,605

Merchandise Inventory – End 1) 1,650,620 1,650,620 1,650,620

Income & Expense Summary 1) 1,650,620 1,650,620 1,650,620
Interest Receivable 2) 1,800 1,800 1,800
Prepaid Insurance 3) 12,000 12,000 12,000
Unused Supplies 4) 4,850 4,850 4,850
Dep’n. – Delivery Equipment 5) 50,000 50,000 50,000
Dep’n. – Store Equipment 6) 15,000 15,000 15,000
Dep’n. – Office Equipment 7) 10,000 10,000 10,000
Accrued Expense Payable 8) 28,000 28,000 28,000
Impairment Loss 9) 37,606 37,606 37,606
TOTALS P 1,809,876 P 1,809,876 P 8,277,631 P 8,277,631 P 5,235,531 P5,479,630 P 3,042100 P 2,798,001
Net Profit 244,099 244,099
TOTALS P5,479,630 P5,479,630 P 3,042,100 P 3,042,100
C. Income Statement - Traditional Format

Superb Appliances Store

Income Statement
Period Ended December ______

Sales P 3,760,600
Sales Returns & Allowances 37,500
Sales Discount 50,650 88,150
Net Sales 3,672,450

Cost of Sales:
Beginning Inventory 1,578,650
Purchases 2,625,250
Transportation-in 60,250
Gross 2,685,500
Purchase Returns 26,250
Purchase Discount 39,160 65,410 2,620,090
Cost of Goods Available for Sale 4,198,740
Less: Ending Inventory 1,650,620 2,548,120
Gross Profit 1,124,330
Selling Expenses:
Sales Salaries 225,675
Advertising Expense 36,000
Commission Expense 75,250
Delivery Expenses 112,500
Impairment Loss 37,606
Miscellaneous Selling Expense 12,450
Dep’n. Expense – Delivery Equipment 50,000
Dep’n. Expense – Store Equipment 15,000 564,481
Net Profit from Sales 559,849
Administrative Expenses:
Office Salaries Expense 130,900
 Rent Expense 120,000
Insurance Expense 12,000
Office Supplies Expense 17,400
Taxes & Licenses Expense 10,250
Miscellaneous General Expense 6,200
Dep’n. Expense – Office Equipment 10,000 306,750
Net Operating Profit 253,099
Interest Income 3,000
Total 256,099 Interest Expense
12,000
Net Profit P 244,099

Natural Format

Superb Appliances Store

Income Statement
Period Ended December ______

Net Sales P 3,672,450

Net Purchases (2,620,090)
Increase in Inventory 71,970
Depreciation Expense (75,000)
Impairment Loss (37,606)
Salaries Expense (356,575)
Advertising Expense (36,000)
Commission Expense (75,250)
Delivery Expense (112,500)
Miscellaneous Expenses (12,450 + 6,200) (18,650)
Rent Expense (120,000)
Insurance Expense (12,000)
Office Supplies Expense (17,400)
Taxes & Licenses Expense (10,250)
 Interest Expense (9,000)
Net Profit P 244,099

D.
Superb Appliances Store
Changes in Owner’s Equity
Period Ended December ______

Beginning Capital P 1,405,945

Add: Additional Investment 98,000
Net Profit 244,099 342,099
Total P 1,748,044
Less: C. Kat Drawing 60,000
Ending Capital P 1,688,044

E.
Superb Appliances Store
Balance Sheet
________________

ASSETS
Current Assets
Cash P 277,830
Notes Receivable 60,000
Accounts Receivable 275,000
Allow. for Impairment Loss 39,606 235,394
Merchandise Inventory – Ending 1,650,620
Interest Receivable 1,800
Prepaid Insurance 12,000
Unused Supplies 4,850
Total Current Asset P 2,242,494
Non-Current Assets
Delivery equipment 500,000
Accum. Dep’n.-Del. Equip. 100,000 400,000
Store Equipment 150,000
Accum. Dep’n.-Store Equip. 30,000 120,000
Office Equipment 50,000
Accum. Dep’n.-Office Equip. 20,000 30,000
Total Non-Current Asset 550,000
TOTAL ASSETS P 2,792,494

LIABILITIES
Current Liabilities
Accounts Payable P 976,450
Notes Payable 100,000
Accrued Expense Payable 28,000
Total Liabilities P 1,104,450

OWNER’S EQUITY
C. Kat Capital P 1,688,044
TOTAL LIABILITIES & CAPITAL P 2,792,494
F. Closing Entries

1. Sales 3,760,600
Purchase Returns & Allowances 26,250
Purchase Discount 39,160
Interest Income 3,000
Income & Expense Summary 3,829,010

2. Income & Expense Summary 5,235,531

Beginning Inventory 1,578,650
Sales Returns & allowances 37,500
Sales Discount 50,650
Purchases 2,625,250
Transportation-in 60,250
Sales Salaries Expense 225,675
Advertising Expense 36,000
Commission Expense 75,250
Delivery Expense 112,500
Impairment Loss 37,606
Miscellaneous Selling Expenses 12,450
Dep’n. Expense – Delivery Equipment 50,000
Dep’n. Expense – Store Equipment 15,000
Office Salaries Expense 130,900
 Rent Expense 120,000
Insurance Expense 12,000
Office Supplies Expense 17,400
Taxes & Licenses Expense 10,250
Miscellaneous General Expense 6,200
Dep’n. Expense – Office Equipment 10,000
Interest Expense 12,000

3. Income & Expense Summary 244,099

C. Kat Drawing 244,099

4. C. Kat Drawing 184,099

C. Kat Capital 184,099

Bulaklak Trading
Worksheet
For the Month Ended December 31, 200G
                 
Preliminary Trial
  Balance Adjusting Entries Income Statement Balance Sheet
Accounts Debit Credit Debit Credit Debit Credit Debit Credit
Cash P 67,075 P P P P P P 67,075 P
Note Receivable 70,000 70,000
Accounts Receivable 171,100 171,100
Merchandise Inventory-Beg. 60,900 60,900
Furniture & Fixtures 31,000 31,000
Office Equipment 14,000 14,000
Note Payable 20,000 20,000
Accounts Payable 94,750 94,750
Luningning Capital 265,000 265,000
Luningning Drawing 9,500 9,500
Sales 572,875 572,875
Sales Returns & Allowances 11,000 11,000
Sales Discount 6,400 6,400
Purchases 390,750 390,750
Freight-in 5,415 5,415
Purchase Returns & Allowances 3,630 3,630
Purchase Discount 6,885 6,885
Salaries Expense 99,550 99,550
Rent Expense 24,000 24,000
Insurance Expense 5,250 8) 4,000 9,250
Office Supplies Expense 2,200 7) 890 1,310
Rental Income 5,000 9) 4,000 1,000
                 

Totals P 968,140 P 968,140

Merchandise Inventory-End 1) 76,000 76,000
Income & Expense Summary 1) 76,000 76,000
Interest Receivable 2) 350 350
Interest Income 2) 350 350
Impairment Loss 3) 1,711 1,711
Allow. for Impairment Loss 3) 1,711 1,711
Dep’n. Expense-Furniture &
Fixtures 4) 1,860 1,860
Accum. Dep’n. – Furniture &
Fixtures 4) 1,860 1,860
Dep’n. Expense – Office
Equipment 5) 1,100 1,100
Accum. Dep’n. – Office
Equipment 5) 1,100 1,100
Interest Expense 6) 200 200
Interest Payable 6) 200 200
Unused Supplies 7) 890 890
Insurance Payable 8) 4,000 4,000
Unearned Rental 9) 4,000 4,000
TOTALS P 90,111 P90,111 P 613446 P 660,740 P 439,915 P 392,621
Net Profit 47,294 47,294
TOTALS      P 660,740  P 660,740  P 439,915  P 439,915