Financial Accounting and Reporting

Illustration : Periodic Inventory System

The accounts of Jim Boy Trading Co. have the following balances on January 01, 20x1:

Jim Boy Trading Co.

Trial Balance
January 1, 20x1

Accounts Debit Credit

110 Cash P 50,000 P
120 Accounts Receivable 120,000
130 Inventory 30,000
140 Equipment 200,000
145 Accumulated Depreciation 80,000
210 Accounts Payable 20,000
310 Jim Boy, Capital 300,000
Totals P 400,000 P 400,000

The following were the transactions during the year:

1. Sales on cash basis amounted to P 80,000.

2. Sales on account amounted to P 130,000.
3. Purchases on account amounted to P 70,000.
4. Freight paid on purchases amounted to P 5,000.
5. Purchases returns amounted to P 10,000.
6. Salaries paid amounted to P 60,000.
7. Utility bills paid amounted to P 20,000.
8. Collections of accounts receivable amounted to P 200,000.
9. Payments of accounts payable amounted to P 60,000.
10. Owner drawings during the year totaled P 80,000.

Additional information:
a. The annual depreciation on the equipment is P 20,000.
b. The physical count of inventory on December 31, 20x1 revealed a P 60,000 balance of goods on hand.

Requirement: Complete the accounting cycle.