Worksheet Preparation & Financial Statements Preparation for Merchandising Business

Chapter 10_Exercise 7, p. 241-242

Villar Bookstore
10-Column Worksheet
as of December 31, 2018
in thousands Philippine Peso
Trial Balance (Unadjusted) Adjustments
Account Title
Debit Credit Debit Credit
Cash on Hand and In Bank 200,000
Accounts Receivable
Notes Receivable (1-year 20% 100,000
due July 1, 2019) 90,000
Merchandise Inventory, Jan. 1 220,000
Supplies Inventory 4,000
Furniture & Fixtures 50,000
Accounts Payable
Loans Payable (2-year 8% note 16,000
issued Jan. 1 , 2018) 80,000
Villar, Capital 100,000
Villar, Drawings 20,000
Sales 1,697,000
Sales Discount 41,000
Purchases 950,000
Freight In 15,000
Purchase Returns & Alowances 27,000
Freight Out 19,000
Salaries and Wages 72,000 e.) 12,000
Taxes Expense 75,000
Utilities Expense 64,000
Sub-Total 1,920,000 1,920,000
Bad Debts Expense a.) 2,000
Allowance for Bad Debts a.) 2,000
Depreciation Expense b.) 8,000
Accum. Depreciation - F & F b.) 8,000
Interest Receivable c.) 9,000
Interest Income c.) 9,000
Interest Expense d.) 6,400
Interest Payable d.) 6,400
SSS Prem Payable e.) 480
Philhealth Prem Payable e.) 165
Pag-ibig Prem Payable e.) 100
Salaries Payable e.) 11,255
Merchandise Inventory, Dec. 31 f.) 80,000
Income & Expense Summary f.) 80,000
Totals 117,400 117,400
NET "___________"
Totals
r Bookstore
mn Worksheet
cember 31, 2018
ds Philippine Peso
Adjusted Trial Balance Income Statement Statement of Financial Position
Debit Credit Debit Credit Debit Credit
Adjusting Entries as of Dec. 31, 2018

a.) Type of Adjustments - Bad Debts under Balance Sheet approach

Should be Allow. for Bad Deb 2,000

vs Allow for bad debts bef. ad 0
Allow. for Bad Debts, end (as 2,000

Bad Debts Expense 2,000

Allowance for Bad Debts 2,000

b.) Type of Adjustments - Depreciation

Annual SL
Depreciation 8,000 or SL Rate
x Depreciable 0.2
costs
Annual SL 40,000
Depreciation 8,000

Depreciation Expense 8,000

Accum. Depreciation - F & F 8,000

c.) Type of Adjustments - Accrued Income

Interest Receivable 9,000
Interest Income 9,000
To accrue for interest from July 1, 2018 to Dec. 31, 2019

d.) Type of Adjustments - Accrued Expense

Interest Expense 6,400
Interest Payable 6,400

e.) Type of Adjustments - Accrued Expense

Salaries Expense 12,000
SSS Prem Payable 480
Philhealth Prem Payable 165
Pag-ibig Prem Payable 100
Salaries Payable 11,255

f.) Type of Adjustment - Merchandise Inventory, end (applicable for Merchandising Business only)
Merchandise Inventory, Dec. 31 80,000
Income & Expense Summary 80,000
Business only)