National Certification III: Bookkeeping

Mock Exam
Merchandising Business with Perpetual Inventory System

R. Pangan Company
Chart of Accounts
December 31, 2018

Account No. Account Title Account No. Account Title

110 Cash 410 Sales
120 Accounts Receivable 420 Sales Returns and Allowances
130 Merchandise Inventory 430 Sales Discounts
140 Prepaid Rent 510 Cost of Goods Sold
150 Office Supplies 520 Salaries Expense
160 Office Equipment 530 Rent Expense
210 Accounts Payable 540 Office Supplies Expense
220 Notes Payable 550 Depreciation Expense
230 Salaries Payable 550 Interest Expense
310 Pangan, Capital
320 Pangan, Withdrawals
330 Income Summary

Pangan uses perpetual inventory system as its inventory system. All credit sales are 2/10, n/30. All credit purchases are
3/10, n/30. During the month of December 2018, the following transactions incurred:

Dec. 1 R. Pangan withdrew from his personal savings account at Banco de Pilipinas and deposit it under the name
of its business, R. Pangan Company, amounting to P1,650,000.
2 Purchased merchandise on account from T. Arenas Company, P500,000.
3 Sold merchandise on credit to B. Bandonell, P240,000. Invoice no. 316. Cost of inventory is P120,000.
5 Sold merchandise for cash, P430,000. Cost of merchandise is P215,000.
8 Sold merchandise on account to G. Sevidal, P310,000. Invoice No. 317. Cost of merchandise is P155,000.
9 Returned merchandise purchased from T. Arenas Company, P10,000.
10 Collected amount due from B. Bandonell less discounts.
11 Purchased merchandise on account from L. Viray Company, P120,000.
11 Paid T. Arenas Company amount due less returns and discounts. Issued check no. 84.
12 Purchased merchandise for cash, P70,000. Issued check no. 85.
13 Sold merchandise on account to M. Cerda, P130,000. Invoice No. 318. Cost of merchandise is P65,000.
14 Acquired P100,000 from Philippine International Bank secured by a note.
15 Paid salaries, P80,000. Issued check no. 87.
17 Purchased merchandise on account from E. Samonte Company, P190,000.
18 Sold merchandise on account to R. Loyola, P460,000. Invoice no. 319. Cost of merchandise is P230,000.
19 Pangan withdrew P100,000 from the business. Issued check no. 88.
21 Acquired office supplies for cash, P40,000. Issued check no. 89.
22 Paid freight charges on the merchandise purchased from E. Samonte Company on Dec. 17, P20,000. Issued
check no. 90
22 Collected amount due from M. Cerda less discounts.
23 Sold merchandise on credit to B. Bandonell, P110,000. Invoice no. 320. Cost of merchandise is P55,000.
24 Received returned merchandise from G. Sevidal, P30,000. Cost of merchandise P15,000.
25 Received amount due from G. Sevidal on the sale of Dec. 8 less returns.
25 Purchased merchandise on account from A. Braganza Company, P340,000.
26 Paid P90,000 to E. Samonte Company in partial payment of account. Issued check on. 91.
27 Received P170,000 loan from the First Morayta Bank and issued a note payable.
28 Purchased merchandise on account from L. Viray Company, P270,000.
29 Sold merchandise on account to M. Cerda, P170,000. Invoice no. 321. Cost of merchandise is P85,000.
30 Purchased merchandise on account from T. Arenas Company, P360,000.
30 Sold merchandise for cash, P1,310,000. Cost of merchandise is P655,000.

Required:
1. Record the transactions for the month of February in a journal and post the transactions to the ledger.
2. Prepare a Statement of Performance, Statement of Changes in Equity, Statement of Financial Position and a
Cash Flow statement as at December 31, 2018.
3. Prepare the closing entries for the month.
4. Prepare the post-closing trial balance.
Journal Entries
 GJ-1

DATE PARTICULARS P.R. DEBIT CREDIT

Dec. 1 Cash 110 1,650,000
Pangan, Capital 310 1,650,000
To record initial investment
#
Dec. 2 Merchandise Inventory 130 500,000
Accounts payable 210 500,000
To record merchandise bought on account.
#

Dec. 3 Accounts Receivable 120 240,000

Sales 410 240,000
To record merchandise sold on account
#
Cost of goods sold 510 120,000
Merchandise Inventory 130 120,000
To record merchandise cost.
#
Dec. 5 Cash 110 430,000
Sales 410 430,000
To record merchandise sold on cash
#
Cost of Goods sold 510 215,000
Merchandise Inventory 130 215,000
To record merchandise cost
Dec. 8 Accounts Receivable 120 310,000
Sales 410 310,000
To record merchandise sold on account
#
Cost of goods sold 510 155,000
Merchandise Inventory 130 155,000
To record merchandise cost.
#
Dec. 9 Accounts payable 210 10,000
Merchandise Inventory 130 10,000
To record purchase returns
#
Dec. 10 Cash 110 235,200
Sales Discount 430 4,800
Accounts Receivable 120 240,000
To record payment on merchandise
#
Dec. 11 Merchandise Inventory 130 120,000
Accounts Payable 210 120,000
To record merchandise bought on account
#
Dec. 11 Accounts Payable 210 490,000
Merchandise inventory 130 14,700
Cash 110 475,300
To record payment
#
Dec. 12 Merchandise Inventory 130 70,000
Cash 110 70,000
To record merchandise bought.
#
Journal Entries
 GJ-2

DATE PARTICULARS P.R. DEBIT CREDIT

Dec. 13 Accounts Receivable 120 130,000
Sales 410 130,000
To record merchandise bought on account
#
Cost of goods sold 510 65,000
Merchandise Inventory 130 65,000
To record cost of merchandise
#
Dec. 14 Cash 110 100,000
Notes Payable 220 100,000
To record acquisition of note.
#
Dec. 15 Salaries expense 520 80,000
Cash 110 80,000
To record payment of salaries
#
Dec. 17 Merchandise Inventory 130 190,000
Accounts Payable 210 190,000
To record merchandise bought on account
#

Dec. 18 Accounts Receivable 120 460,000

Sales 410 460,000
To record sales on account
#
Cost of goods sold 510 230,000
Merchandise Inventory 130 230,000
To record cost of merchandise
#
Dec. 19 Pangan, Withdrawals 320 100,000
Cash 110 100,000
To record drawings
#
Dec. 21 Office Supplies 150 40,000
Cash 110 40,000
To record bought supplies
#
Dec. 22 Merchandise Inventory 130 20,000
Cash 110 20,000
To record freight charges
#
Dec. 22 Cash 110 127,400
Sales Discount 430 2,600
Accounts Receivable 120 130,000
To record payment on merchandise sold.
#
Dec. 23 Accounts Receivable 120 110,000
Sales 410 110,000
To record sales on account
#
Cost of goods sold 510 55,000
Merchandise inventory 55,000
To record cost of merchandise
#
Journal Entries
 GJ-3

DATE PARTICULARS P.R. DEBIT CREDIT

Dec. 24 Sales returns and allowances 420 30,000
Accounts Receivable 120 30,000
To record merchandise returned
#
Merchandise Inventory 130 15,000
Cost of goods sold 510 15,000
#
Dec. 25 Cash 110 280,000
Accounts Receivable 120 280,000
To record mount receive due on Dec 8
#
Dec. 25 Merchandise Inventory 130 340,000
Accounts Payable 210 340,000
To record purchased on account
#

Dec. 26 Accounts Payable 210 90,000

Cash 110 90,000
To record partial payment
#
Dec. 27 Cash 110 170,000
Notes Payable 220 170,000
To record loan
#
Dec. 28 Merchandise Inventory 130 270,000
Accounts Payable 210 270,000
To record merchandise bought.
#

Dec. 29 Accounts Receivable 120 170,000

Sales 410 170,000
To record sales on account
#
Cost of goods sold 510 85,000
Merchandise Inventory 130 85,000
To record cost of merchandise cost.
#
Dec. 30 Merchandise Inventory 130 360,000
Accounts payable 210 360,000
To record merchandise bought on account.
#

Dec. 30 Cash 120 1,310,000

Sales 410 1,310,000
To record sales on cash
#
Cost of goods sold 510 655,000
Merchandise inventory 130 655,000
To record cost of merchandise
#
 CASH - 110
BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 1 To record initial investment 1,650,0000 1,650,000
Dec 5 To record merchandise bought 430,000 2,080,000
on account
Dec 10 To record payment on 235,200 2,315,200
merchandise
Dec 11 To record payment 475,300 1,839,900
Dec 12 To record merchandise bought. 70,000 1,769,900
Dec 14 To record acquisition of note 100,000 1,869,900
Dec 15 To record payment of salaries 80,000 1,789,900
Dec 19 To record drawings 100,000 1,689,900
Dec 21 To record bought supplies 40,000 1,649,900
Dec 22 To record freight charges 20,000 1,629,900
Dec 22 To record payment on 127,400 1,757,300
merchandise sold.
Dec 25 To record mount receive due on 280,000 2,037,300
Dec 8
Dec 26 To record partial payment 90,000 1,947,300
Dec 27 To record loan 170,000 2,117,300
Dec 30 To record sales on cash 1,310,00 3,427,300

ACCOUNTS RECEIVABLE – 120

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 3 To record merchandise sold on 240,000
account
Dec 8 To record merchandise sold on 310,000
account
Dec 9 To record purchase returns 10,000
Dec 10 To record payment on merchandise 240,000
Dec 13 To record merchandise bought on 130,000
account
Dec 18 To record sales on account 460,000
Dec 22 To record payment on merchandise 130,000
sold.
Dec 23 To record sales on account 110,000
Dec 24 To record merchandise returned 30,000
Dec 25 To record mount receive due on 280,000
Dec 8
Dec 29 To record sales on account 170,000

OFFICE SUPPLIES – 150

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 21 To record bought supplies 40,000
 ACCOUNTS PAYABLE – 210
BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 2 To record merchandise bought on 500,000
account
Dec 9 To record purchase returns 10,000
Dec 11 To record merchandise bought on 120,000
account
Dec 11 To record payment 490,000
Dec 17 o record merchandise bought on account 190,000
Dec 25 To record purchased on account 340,000
Dec 26 To record partial payment 90,000
Dec 28 To record merchandise bought. 270,000
Dec 30 To record merchandise bought on 360,000
account.

MERCHANDISE INVENTORY – 130

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 2 To record merchandise bought on account 500,000
DEc 3 To record merchandise cost. 120,000
Dec 5 To record merchandise cost 215,000
Dec 8 To record merchandise cost. 155,00
Dec 9 To record purchase returns 10,000
Dec 11 To record merchandise bought on account 120,000
Dec 11 To record payment 14,700
Dec 12 To record merchandise bought. 70,000
Dec 13 To record cost of merchandise 65,000
Dec 17 o record merchandise bought on account 190,000
Dec 18 To record cost of merchandise 230,000
Dec 22 To record freight charges 20,000
Dec 23 To record cost of merchandise 55,000
Dec 24 To record merchandise returned 15,000
Dec 25 To record purchased on account 340,000
Dec 28 To record merchandise bought. 270,000
Dec 29 To record cost of merchandise cost. 85,000
Dec 30 To record merchandise bought on account. 360,000
Dec 30 To record cost of merchandise 655,000

NOTES PAYABLE – 220

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 14 To record acquisition of note. 100,000
Dec 27 To record loan 170,000

PANGA, CAPITAL – 310

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 1 To record initial investment 1,650,000
 PANGAN, WITHDRAWALS – 320
BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 19 To record drawings 100,000

INCOME SUMMARY – 330

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT

SALES – 410
BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 3 To record merchandise sold on account 240,000
Dec 5 To record merchandise sold on cash 430,000
Dec 8 To record merchandise sold on account 310,000
Dec 13 To record merchandise bought on account 130,000
Dec 18 To record sales on account 460,000
Dec 23 To record sales on account 110,000
Dec 29 To record sales on account 170,000
Dec 30 To record sales on cash 1,310,000

SALES RETURNS AND ALLOWANCES – 420

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 24 To record merchandise returned 30,000

SALES DISCOUNTS – 430

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 10 To record payment on merchandise 4,800
Dec 22 To record payment on merchandise sold. 2,600
 COST OF GOODS SOLD – 510
BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 3 To record merchandise cost. 120,000
Dec 5 To record merchandise cost 215,000
Dec 8 To record merchandise cost. 155,000
Dec 13 To record cost of merchandise 65,000
Dec 18 To record cost of merchandise 230,000
Dec 23 To record cost of merchandise 55,000
Dec 24 To record merchandise returned 15,000
Dec 29 To record cost of merchandise cost. 85,000
Dec 30 To record cost of merchandise 655,000

SALARIES EXPENSE - 520

BALANCE
DATE EXPLANATION DEBIT CREDIT
DEBIT CREDIT
Dec 15 To record payment of salaries 80,000
 R. PANGAN COMPANY
TRIAL BALANCE
AS OF DECEMBER 31, 2018

Cash 110 3,427,300

Accounts Receivable 120 740,000
Merchandise Inventory 130 280,300
Office Supplies 150 40,000
Accounts Payable 210 1,190,000
Notes payable 220 270,000
Pangan, Capital 310 1,650,000
Pangan, Withdrawals 320 100,000
Sales 410 3,160,000
Sales Returns and Allowances 420 30,000
Sales Discount 430 7,400
Cost of Goods Sold 510 1,565,000
Salaries Expense 520 80,000

TOTAL 6,270,000 6,270,000

R. PANGAN COMPANY
STATEMENT OF PERFORMANCE
FOR THE MONTH OF DECEMBER 2018

Net Sales 3,122,600

Cost of Goods sold (1,565,000)
Gross Profit 1,557,600
Operating Expenses (80,000)
Profit 1,477,600

R. PANGAN COMPANY
STATEMENT OF CHANGES IN EQUITY
AS OF DECEMBER 31, 2018

Pangan, Capital Beg. 1,650,000

Profit 1,477,000
Total 3,127,600
Pangan, Withdrawals (100,000)
Pangan, Owner’s Equity End 3,027,600
 R. PANGAN COMPANY
STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2018

Assets
Current Assets
Cash 3,427,300
Accounts Receivable 740,000
Merchandise Inventory 280,300
Office Supplies 40,000
Total Assets 4,487,600
Liabilities
Current Liabilities
Accounts Payable 1,190,000
Notes Payable 270,000
Total Liabilities 1,460,000
Owner’s Equity
Pangan, Capital 3,027,600
Total Liabilities and Owner’s Equity, Ending 4,487,600

R. PANGAN COMPANY
STATEMENT OF CASH FLOWS
AS OF DECEMBER 31, 2018

CASH FLOW FROM OPERATING ACTIVITIES

SALES
RECEIVABLES
PAYMENT FOR
OFFICE SUPPLIES
GOODS BOUGHT
OPERATING EXPENSES
REFUND TO CUSTOMER
NET CASH FLOW FROM OPERATING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES

CASH FLOW FROM FINANCING ACTIVITES

INITIAL INVESTMENT
BORROWINGS
DRAWINGS

INCREASE IN CASH
BEGINNING CASH BALANCE
ENDING CASH BALANCE
 Closing Entries
GJ-4

DATE PARTICULARS P.R. DEBIT CREDIT

Dec. 31 Sales 410 3,160,000
Income Summary 330 3,160,000
To close temporary accounts with credit balances
#
Dec. 31 Income Summary 330 397,700
Merchandise Inventory 130 280,300
Sales Returns and Allowances 420 30,000
Sales Discount 430 7,400
Salaries Expense 520 80,000
To close temporary accounts with debit balances
#
Dec. 31 Income Summary 330 1,477,600
Pangan, Capital 310 1,466,600
To close income summary account.
#
Dec.31 Pangan, Capital 310 100,000
Pangan, Withdrawals 320 100,000
To close the withdrawal account.

. PANGAN COMPANY
POST CLOSING TRIAL BALANCE
AS OF DECEMBER 31, 2018

Cash 110 3,427,300

Accounts Receivable 120 740,000
Merchandise Inventory 130 280,300
Office Supplies 150 40,000
Accounts Payable 210 1,190,000
Notes Payable 220 270,000
Pangan, Capital 310 3,027,600

TOTAL 4,487,600 4,487,600

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