Name:____________________________________________ Grade & Section:___________ Score: ______

School:____________ Teacher:________ Subject: Fundamentals of Accountancy, Business & Management

LAS Writer: MARY FAITH A. SIM Content Editor: WILFREDO BARLUADO Language Editor: MAYLENE S. ORENCIO
Lesson Topic: Completion of the Accounting Cycle of a Merchandising Business-Worksheet Q4 Week 6 LAS3
Learning Target: Complete the Accounting Cycle of a Merchandising Business-Worksheet ABM_FABM11- IVe-j -40
Reference: Lopez,R. Jr. 2016. Fundamentals of Accountancy, Business & Management 1 (For Senior High
School Students). Davao City, Philippines. pp 298-300

Content:

COMPLETION OF THE ACCOUNTING CYCLE OF A MERCHANDISING BUSINESS-WORKSHEET

Worksheet is a columnar sheet or paper used to show the preliminary trial balance as well as the
adjustments to the ledger balances. After determining the adjusted balances of the different accounts, the
nominal accounts will be segregated from the real accounts to facilitate the preparation of the formal financial
statements. The worksheet may also discover potential errors.

Below are the steps in preparing an 8-column worksheet.

Step 1: Indicate the heading and copy the amount of the Trial Balance in the first two column of the
worksheet. Change the name Trial Balance to “Unadjusted Trial Balance” to remind you that there is a need
to prepare the adjustments first.

Step 2: Write the adjusting journal entries to the adjusted column, located in the 3rd and 4th column of the
worksheet. It is labeled as “Adjustments”. All accounts that are not found in the “Unadjusted Trial Balance”
but are affected in adjustments are listed in in the adjustments column.

Step 3:In the 5th and 6th column of the worksheet, write the header ”Statement of Comprehensive
Income”. The Merchandise Inventory, Beginning is written on the debit side while Merchandise Inventory, End
is written to both credit side column of ”Statement of Comprehensive Income” and “Statement of Financial
Position”(which is located at the 7th and 8th column of the worksheet).

Step 4: Write the amount of Real Accounts to the “Statement of Financial Position” and all Nominal
accounts to the ”Statement of Comprehensive Income” and all accounts listed below the total of the
“Unadjusted Trial Balance”. Remember that Real Accounts include Asset, Liabilities and Owner’s Equity and
Nominal accounts are Income, Costs and Expenses.

Step 5: Total the columns of “Statement of Comprehensive Income” and “Statement of Financial
Position”. As you can see, it will not give you a balanced amount and the difference between these columns is
either profit or loss. It is a profit if the total credit of Statements of Comprehensive Income is bigger than the
debit side. It is a loss if the credit side of Statements of Comprehensive Income is smaller than the debit side.
The profit is extended to the Statement of Financial Position credit which will increase the Owner’s Equity while
loss is extended to the debit side of Statement of Financial Position which will decrease the Owner’s Equity.

In the next page is the 8-column worksheet of Maginhawa Commercial. It shows how Merchandise
Inventory, Beginning amounting to Php250,000.00 was extended to the debit side of Statements of
Comprehensive Income as “cost”, and how Merchandise Inventory, End in the amount of Php 190,000.00 was
extended to the debit side of Statement of Financial Position as an Asset account and credit side of the
Statements of Comprehensive Income.
 Maginhawa Commercial
Worksheet
For the year ended December 31, 2020
Statement of Comprehensive
Unadjusted Trial Balance Adjustment Income Statement of Financial Position
Debit Credit Debit Credit Debit Credit Debit Credit
Cash In Bank 534,673.00 534,673.00
Accounts Receivable 155,000.00 155,000.00
Merchandise Inventory,Beg 250,000.00 250,000.00
Prepaid Insurance 15,000.00 5,000.00 10,000.00
Prepaid Rent 12,000.00 2,000.00 10,000.00
Accounts Payable 267,953.00 267,953.00
ABZ, Capital 300,000.00 300,000.00
ABZ, Withdrawal 10,000.00 10,000.00
Sales 971,940.00 971,940.00
Sales Discount 5,220.00 5,220.00
Sales Returns & Allowances 4,500.00 4,500.00
Purchases 500,000.00 500,000.00
Purchase Discount 1,500.00 1,500.00
Purchase Returns & Allowances 4,500.00 4,500.00
Freight In 2,500.00 2,500.00
Freight Out 4,700.00 4,700.00
Salaries Expense 25,000.00 25,000.00
Utilities Expense 5,800.00 5,800.00
Taxes & Licenses 6,500.00 6,500.00
Rent Expense 10,000.00 2,000.00 12,000.00
Insurance Expense 5,000.00 5,000.00 10,000.00
Total 1,545,893.00 1,545,893.00 7,000.00 7,000.00
Merchandise Inventory, End 190,000.00 190,000.00
Total 826,220.00 1,167,940.00 909,673.00 567,953.00
Profit for the Month 341,720.00 - - 341,720.00
1,167,940.00 1,167,940.00 909,673.00 909,673.00
Activity
Instructions: Below is the Trial Balance of Maliwanag Enterprises. Supply the 8-column
worksheet provided on the next page. Follow the procedure in preparing an 8-column worksheet.
Supply the lacking entries in the 8-column worksheet. Each correct entry is given one point. This
activity is good for 40 points.

Maliwanag Enterprises
Trial Balance
For the Month ended March 31, 2021

Cash In Bank 135,679.00

Accounts Receivable 255,000.00
Merchandise Inventory,Beg 340,000.00
Prepaid Rent 18,000.00
Unused Supplies 14,000.00
Accounts Payable 111,837.00
ABZ, Capital 450,000.00
ABZ, Withdrawal 20,000.00
Sales 564,897.00
Sales Discount 3,655.00
Sales Returns & Allowances 3,200.00
Purchases 300,000.00
Purchase Discount 1,200.00
Purchase Returns & Allowances 3,500.00
Freight In 1,500.00
Freight Out 3,400.00
Salaries Expense 15,000.00
Utilities Expense 13,000.00
Taxes & Licenses 2,000.00
Rent Expense 5,000.00
Supplies Expense 2,000.00
Total 1,131,434.00 1,131,434.00

Additional information:
a. Merchandise Inventory at the end of the month is Php 54,000.00
b. Physical inventory at the end of the month is Php 10,000.00
c. Rent expense for the month is Php 8,000.00
 Maliwanag Enterprises
Worksheet
For the year ended December 31, 2020
Statement of Comprehensive
Unadjusted Trial Balance Adjustment Income Statement of Financial Position
Debit Credit Debit Credit Debit Credit Debit Credit
Cash In Bank 135,679.00
Accounts Receivable 255,000.00
Merchandise Inventory,Beg 340,000.00
Prepaid Rent 18,000.00
Unused Supplies 14,000.00
Accounts Payable 111,837.00
ABZ, Capital 450,000.00
ABZ, Withdrawal 20,000.00
Sales 564,897.00
Sales Discount 3,655.00
Sales Returns & Allowances 3,200.00
Purchases 300,000.00
Purchase Discount 1,200.00
Purchase Returns & Allowances 3,500.00
Freight In 1,500.00
Freight Out 3,400.00
Salaries Expense 15,000.00
Utilities Expense 13,000.00
Taxes & Licenses 2,000.00
Rent Expense 5,000.00
Supplies Expense 2,000.00
Total
Merchandise Inventory, End
Total
Profit for the Month