January Date Accounts Titles and Explanation Debit Credit

1 Merchandise Inventory 200,000

Cash in Bank 400,000
Cash on Hand 100,000
Lopez Capital 700,000
to record initial investment of inventory, and cash

2 Prepaid Rent 25,000

Cash in Bank 25,000
issued a check for rent deposit

3 Merchandise Inventory ($44,800+280) x 5.50 247,940

Input VAT (247,940x 12% 29,753
Accounts Payable 277,693
to record the purchase of inventory in HK distributor

4 Merchandise Inventory (39,200 x98%x99%) 38,032

Input VAT (38,032x 12%) 4,564
Accounts Payable 42,596
to record the purchase of inventory from Folks

5 Mechandise Inventory (1,440x100/112) 1,286

Input VAT (1,440812/112) 154
Cash on Hand 1,440
to record the freight payment for Folks Wear

6 Accounts Receivable 8,960

Sales (8,960 x 100/112) 8,000
Output VAT (8,960x12/112) 960
to record the sale to Sari store

Cost of Sales
Merchandise Inventory

Freight Out 504

Cash on Hand 504
to recor freight charges - freight collect

7 Accounts Payable (1,800 x1.12) 2,016

Input VAT (1,800 x 12%) 216
Merchandise Inventory 1,800
to record the merchandise return to Folks Wear

11 Accounts Payable 277,693

Cash in Bank (277,693x98%) 272,139
Merchandise Inventory (277,693x2%) 5,554
to record payment to HK distributor with discount

14 Cash in Bank 15,680

Sales (15,680x100/112) 14,000
Output VAT (15,680x12/112) 1,680
to records cash sales
15 Salaries Expense 14,000
Cash on Hand (14,000 x 95%) 13,300
Taxes Payable (14,000x5%) 700
to record salaries with tax withheld

16 Accounts Payable (42,596-2,016) 40,580

Cash (40,580 x 99%) 40,174
Merchandise Inventory (40,580x1%) 406
to record the payment to Folks Wear with 1% discount

17 Cash on Hand 8,960

Accounts Receivable 8,960
to record the collection of Sari Account

Cash in Bank 8,960

Cash on Hand 8,960
to record the deposit to Citibank

18 Cash on Hand 16,800

Sales (16,800 x 100/112) 15,000
Output VAT 1,800
to record the cash sales

Cost of Sales
Merchandise Inventory

Cash in Bank 16,800

Cash on Hand 16,800
to record the deposit to Citibank

19 Sales Return (12,320 x 100/112) 11,000

Output VAT (12,320 x 12/112) 1,320
Cash on hand 12,320
to record the cash refund

Merchandise Inventory
Cost of Sale

20 Accounts Receivable (33,600+1,456) 35,056

Sales (33,600 x 100/112) 30,000
Output Tax (35,056 x 12/112) 3,756
Cash (1,456x100/112) 1,300
to record cash sales and prepaid freight
Accounts Receivable 33,600
Sales (33,600 x 100/112) 30,000
Output Tax (33,600 x 12/112) 3,600

Accounts Recievable 1,456

Cash (1,456 x100/112) 1,300
Output Tax (1,456x12/112) 156
 Cost of sales
Merchandise Inventory

21 Cash in Bank 9,520

Sales (9,520x100/112) 8,500
Output VAT (9,520x12/112) 1,020
to records cash sales

Cost of Sales
Merchandise Inventory

22 Sales Returns (4,704 x 100/112) 4,200

Output VAT (4,704 x12/112) 504
Accounts Receivable 4,704
To record the return from Robinsons

Merchandise Inventory
Cost of sAles

22 Bank Service Charge 1,125

Cash in Bank 1,125
to record the bank service charge

24 Utilities Expense 5,650

Cash on Hand 5,650
to record payment for utilities

25 Salaries Expense 14,000

SSS Payable 420
Taxes Payable 700
PHIC Payable 210
HDMF payable 280
Cash on Hand 12,390
to record payment for salaries and contributions

28 Rent Expense 12,500

Cash in Bank 12,500
to record the payment for rent

30 ENDING inventory per physical count

Freight In 1300
Input VAT 156
Accounts Payable 1456