CreamyDreams

Impartial fulfilment of the courses in FABM#2

Members
1. Wu, Lester Xavier
2. Bambilla, Isaiah
3. Chua, Angelo
4. Jao, Julia Catherine
5. Lee, Catrina
6. Tan Emile
7. Weng Lyrshe
Business Overview
Creamy Dreams Is a VAT-registered Merchandising Business. It buys & sells Ice creams from
manufacturers and to retailers respectively . This business operates domestically in the
Philippines, and it was first started and founded by Jeff, a graduate with an amazing credit
history. He loves Ice cream ! He even dreamed about it, hence the name Creamy Dreams. On
January, 1, 2021. Jeff initially Invested 100k taken from his Savings. He decides to use a periodic
inventory system in recording his transactions. He registered for VAT last year due to a presumed
lower tax liability.

In January, 9, 2021 He employed 10 employees and 1 manager.

Charts of Accounts

Assets Equity
Capital (301)
Current Drawings (302)
Cash (101)
Accounts Receivable (102)
Input Tax (103)
Revenue
Creditable input VAT (104) Sales revenue (401)
Prepaid expense (105) Sales Returns & Allowances (402)
Accumulated Depreciation (106) Sales Discount (403)
Allowance for Doubtful Accounts (107)
Expense
Non-Current Purchases (501)
PP&E (110) Purchase Returns & Allowances (502)
Purchase Discounts (503)
Freight-in (504)
Liabilities
Freight-out (505)
Current Utilities expense (506)
Accounts Payable (201) Salaries expense (507)
Loans Payable (202) Interest expense (508)
Output tax (203) Rent expense (509)
VAT payable (204) Depreciation expense (510)
Interest payable (205) Bad debts expense (511)
Transactions
Date Transactions Journal used

Jan, 1, 2021 Investment of P100,000 from the Owner in cash. CRJ

Jan, 2 Purchase a Refrigerator 30k VAT exclusive. In cash. CPJ
Jan, 4 Purchase 200 cones of Vanilla Ice cream from Milky delight, P15 each , VAT CPJ
inclusive, free from delivery charges, paid in cash.
Jan, 5 Sells 100 cones of Vanilla ice creams to Galactic Ice, P2000 VAT exclusive, SJ
terms 3/5,2/10,n/30.
Jan, 5 Paid Freight P200 for a third-party to deliver to Galactic Ice. CPJ
Jan, 7 Secured a 2 year loan from Alpha Bank, P2,000,000. 5% Simple Interest CRJ
annually.
Jan, 8 Acquisition of 2 trucks, amounting to P800,000 on cash. CPJ
Jan, 9 Purchase 20 Box of Strawberry Ice creams from Berrylicious, P5000 VAT PJ
exclusive. Terms 2/10, n/30.
Jan, 9 Rents a building that is paid in advance, P20,000 per month. CPJ
Jan,10 Purchase 100 cones of Chocolate Ice creams from Choco Freeze, P2000. VAT CPJ
inclusive .
Jan,11 Sell 10 boxes of Strawberry ice creams to ILoveIceCreams, P2500 VAT SJ
exclusive. Terms : 5/10, n/15.
Jan,12 Payment of gas for 2 trucks, P1000. CPJ
Jan,13 Sell 60 cones of vanilla ice cream to Vanilla burst , P1200 VAT exclusive. CRJ
Jan, 14 Purchase 20 boxes of mint chocolate chip ice cream from Minty Cocoa, P5,400 PJ
 VAT inclusive. Terms: 2/10, n/30.
Jan, 14 Sold 15 cones of chocolate ice cream to Golden Grocery, P375 VAT exclusive. SJ
Terms: 1/10, n/30.
Jan, 15 Paid P500 freight on merchandise purchased from Minty Cocoa. CPJ
Jan, 16 Owner withdrawal, P7,000. CPJ
Jan, 17 Collected the account of ILoveIceCreams in full. CRJ
Jan, 18 Sell 40 cones of Vanilla Ice cream to Sweet Tooth , P800 VAT exclusive. CRJ
Discount of 5%.
Jan, 19 Sweet Tooth returned 10 cones of damaged ice creams. Paid P200. CPJ
Jan, 20 Collected the account of Golden Grocery in full. CRJ
Jan, 21 Settled in full account with Minty Cocoa. CPJ
Jan, 22 Purchase 15 boxes of cookies and cream ice cream from Berry & Mary Ice PJ
creams, P3,750 VAT inclusive. Terms: 2/10, n/30.
Jan, 23 Repairs for 2 trucks , P5,000. Terms : 1/10, n/30. GJ
Jan, 24 Buys new furniture P200,000. Paid in cash. CPJ
Jan, 25 Returned 4 boxes bought from Berry & Mary Ice creams, P1,000. GJ
Jan, 27 Settle in full account with Berry & Mary Ice creams. CPJ
Jan, 28 Acquired a small building P200,000. Paid in cash CPJ
Jan, 30 Paid salaries P130,000 CPJ
Jan, 31 Electricity P50,000, Rent P20,000 and Interest P8333.33. CPJ
 Jan,31 Creditable Input Vat P4987.08 GJ

Special Journals

Sales Journal
Date Customer F Terms A/R (Dr) Sales (Cr) Output tax (Cr)

Jan 5 Galactic Ice 🗸 3/5 , 2/10, n/30 2240 2000 240

Jan 11 ILoveIceCreams 🗸 5/10, n/15 2800 2500 300

Jan 14 Golden Grocery 🗸 1/10, n/30 420 375 45

4660 4875 585
(102) (401) (203)

Cash Receipts Journal

Date Received from Cash (Dr) Sales Discounts (Dr) Output Tax Accounts Credited Balance of Cr F
Jan 1 Owner 100,000 Capital 100,000 🗸
Jan 7 Alpha Bank 2,000,000 Loans Payable 2,000,000 🗸
Jan 13 Vanilla Burst 1344 144 Purchases 1200 🗸
Jan 17 ILoveIceCreams 2660 140 Accounts Receivable 2800 🗸
Jan 18 Sweet tooth 851.2 44.8 Purchases 896 🗸
Jan 20 Golden Grocery 415.8 4.2 Accounts Receivable 420 🗸
2,105,271 189 144 2,105,316
(101) (403) (203)

Purchase Journal
Date Sellers Terms A/P (Cr) Input Tax (Dr) Purchases (Dr) PR

Jan 9 Berrylicious 2/10, n/30 5600 600 5000 🗸

Jan 14 Minty Cocoa 2/10, n/30 5400 578.57 4821.43 🗸
Jan 22 Berry & Mary Ice creams 2/10, n/30 3750 401.79 3348.21 🗸
14,750 1580.36 13,169.64
(201) (103) (501)

Cash Payments Journal

Date Paid to Cash (Cr) Input VAT (Dr) Purchase Discount (Cr) Sundry Accounts Debit
Jan 2 Refrigerator seller 33,600 3,600 PP&E 30,000
Jan 4 Milky delight 3,000 321.43 Purchases 2678.57
Jan 5 Third-party delivery serv. 200 Freight-out 200
Jan 8 Truck Dealer 800,000 PP&E 800,000
Jan 9 Renter 20,000 Prepaid expense 20,000
Jan 10 Choco Freeze 2,000 214.29 Purchases 1785.71
Jan 12 Gas Station 1,000 Utilities expense 1,000
Jan 15 Minty Cocoa 500 Freight-in 500
Jan 16 Owner 7,000 Drawings 7,000
Jan 19 Sweet Tooth 200 Sales Returns & Allowances 200
Jan 21 Minty Cocoa 5292 108 Accounts Payable 5400
Jan 24 Furniture retailer 200,000 PP&E 200,000
Jan 27 Berry & Mary Ice creams 3675 75 Accounts Payable 3750
Jan 28 Real estate Company 200,000 PP&E 200,000
Jan 30 Employees 130,000 Salaries expense 130,000
Jan 31 Electricity provider 50,000 Utilities expense 50,000
Jan 31 Renter 20,000 Rent Expense 20,000
Jan 31 Alpha bank 8333.3 Interest expense 8333.33
1,484,800.3 4135.72 183 1,480,847.58
(101) (103) (503)

General Journal
Date Account titles PR Debit Credit
Jan 23 Utilities expense 5000
Accounts payable 5000
To record the charges for repairs. Terms : 1/10 , n/30

25 Accounts Payable 1000

Purchase Returns & Allowances 1000
To recognize the returns of merchandise.

31 Output Vat 5,716.08

VAT payable 4987.08
Input Vat 729
To offset VAT and record an current liability.

General ledger
 Cash (101)
Jan 31 CRJ#1 2,105,271 Jan 31 CPJ#1 1,484,800.3

Bal : 620,470.7

Accounts Receivable (102)

Jan 31 SJ#1 4660 Jan 17 CRJ#1 2800
Jan 20 CRJ#1 420

Bal : 1440
 Creditable input VAT (104)
Jan 31 GJ#1 4987.08

Bal : 4987.08

Prepaid Expense (105)

Jan 9 CPJ#1 20,000

Bal : 20,000

PP&E (110)
Jan 2 CPJ#1 30,000
Jan 8 CPJ#1 800,000
Jan 24 CPJ#1 200,000
Jan 28 CPJ#1 200,000
Bal : 1,230,000
 Accounts Payable (201)
Jan 21 CPJ#1 5400 Jan 31 PJ#1 14,750
Jan 27 CPJ#1 3750

Bal : 5600

Loans Payable (202)

Jan 7 CRJ#1 2,000,000

Bal : 2,000,000
 Capital (301)
Jan 1 CRJ#1 100,000
Bal : 100,000

Drawings (302)
Jan 16 CPJ#1 7,000

Bal : 7,000

Sales revenue (401)

Jan 31 SJ#1 4875

Bal : 4875
 Sales returns & allowance (402)
Jan 19 CPJ#1 200

Bal : 200

Sales Discount (403)

Jan 31 CRJ#1 189
Bal : 189

Purchase (501)
Jan 31 PJ#1 13,169.64 Jan 13 CRJ#1 1200
Jan 4 CPJ#1 2678.57 Jan 18 CRJ#1 800
Jan 10 CPJ#1 1785.71

Bal : 15,633.92

Purchase Discounts (503)

Jan 31 CPJ#1 183
 Bal : 183

Freight-in (504)
Jan 15 CPJ#1 500
Bal : 500

Freight-out (505)
Jan 5 CPJ#1 200

Bal : 200

Utilities expense (506)

Jan 12 CPJ#1 1,000
Jan 31 CPJ#1 50,000
Bal : 51,000
 Salaries expense (507)
Jan 30 CPJ#1 130,000
Bal : 130,000

Interest expense (508)

Jan 31 CPJ#1 8333.33
Bal : 8333.33

Rent expense (509)

Jan 31 CPJ#1 20,000

Bal : 20,000
Subsidiary ledgers
Accounts Receivable Subsidiary Ledger

Galactic Ice
Accounts Payable Subsidiary Ledger

Berrylicious

*settled accounts are omitted.

Unadjusted Trial Balance

Account title Debit Credit
Cash 620,470.7
Accounts Receivable 1440
Creditable Input VAT 4987.08
Prepaid expense 20,000
PP&E 1,230,000
Accounts payable 5600
Loans payable 2,000,000
Capital 100,000
Drawings 7000
Markup 731
Sales revenue 4875
Sales returns & allowances 200
Sales Discount 189
Purchase 15,633.92
Purchase Discount 183
Freight-in 500
Freight-out 200
Utilities expense 51,000
Salaries expense 130,000
Interest expense 8333.3
Rent expense 20,000
Total : 2,110,685 2,110,658

The Owner of this business was sent to jail and punished because of not following the
Accounting standards. *
Adjusting entries

1. Depreciation of 2 Trucks, each has an Savage value of P100,000 with a useful life of 5
years.

5k per month
Adjusted Trial balance
Inventory at the end of January. (for next time recording.)

Produc Unit Price per Selling

t Name 1 cone 15 Unit 20 Price
Vanilla
230 250

1 cone 20 25
Chocolate 1 box 250 270

1 cone 20 25
Strawberry 1 box 250 270
1 cone 20 25
Cookies and 1 box 250 270
Cream
1 cone 25 30
Mint 1 box 270 290
Chocolate
Chip
Financial Statements

Closing Entries

Post-Closing Trial balance