Required:

Prepare the adjusting entries to update the merchandise inventory account as at Dec. 31, 2021

December 31 Income Summary ₱ 300,000.00

Merchandise Inventory ₱ 300,000.00

Merchandise Inventory 230,000.00

Income Summary 230,000.00
c. 31, 2021
Required:
1. Prepare the adjusting entry needed for merchandise inventory.

Income Summary 80,000.00

Merchandise Inventory 80,000.00

Merchandise Inventory 74,000.00

Income Summary 74,000.00

2. Prepare the partial income statement.

CHARITO GUILLERMO RETAILERS

Income Statement
For the year ended December 31, 2021

Sales ₱ 190,000.00
Less: Sales Returns & Allowances 20,000.00
Net Sales ₱ 170,000.00
Less: Cost of Goods Sold
Beginning Inventory ₱ 80,000.00
Add: Net Purchases
Purchases 60,000.00
Transportation-In 1,000.00
Less: Purchase Discounts 3,000.00 58,000.00
Less Ending Inventory 74,000.00 64,000.00
NET INCOME ₱ 106,000.00
Required:
Insert the missing figured in the following income statement.

Net Sales ₱ 1,610,000.00

Gross Sales
Less: Sales Returns & Allowances 45,000.00
Sales Discounts 15,000.00 60,000.00
Net Sales
Cost of Goods Sold
Inventory, Jan. 1, 2021 ₱ 220,000.00
Purchases ₱ 985,000.00
Less: Purchases Returns & Allowance ₱ 31,000.00
Purchases Discounts 20,000.00 51,000.00
Net Purchases ₱ 934,000.00
Transportation-In 36,000.00
Net Cost of Purchases 970,000.00
Cost of Goods Available for Sale ₱ 1,190,000.00
Less: Inventory, Dec. 31, 2021 260,000.00
Cost of Goods Sold
Gross Margin from Sales
Operating Expenses
Profit
₱ 1,550,000.00

930,000.00
₱ 620,000.00
465,000.00
₱ 155,000.00
Required:
A portion of a worksheet for a merchandising entity is presented. Put a check mark (/) in the
columns where balance of the listed accounts should be extended.

Income Statement Balance Sheet

Account Titles
Debit Credit Debit Credit
Merchandise Inventory, Beginning ✓
Sales ✓
Sales Returns & Allowances ✓
Purchases ✓
Purchases Returns & Allowances ✓
Purchases Discounts ✓
Transportation-In ✓
Salaries Payable ✓
Merchandise Inventory, Ending ✓ ✓
Required:
Prepare the worksheet.

Dores Marie Pateno Hobby Shop Dores Marie Paten

Unadjusted Trial Balance Adjusting Tran
Dec. 31, 2021 Dec. 31, 2

Debit Credit
Cash ₱ 100,000.00
Accounts Receivable 500,000.00
Merchandise Inventory 700,000.00 d.
Prepaid Rent 300,000.00
Shop Equipment 1,600,000.00
Accumulated Depreciation ₱ 200,000.00
Accounts Payable 400,000.00
Pateno, Capital 1,300,000.00
Pateno, Withdrawals 100,000.00
Sales 2,900,000.00
Sales Discounts 100,000.00
Purchases 800,000.00
Purchases Returns & Allowances 200,000.00
Transportation-In 100,000.00
Salaries Expense 400,000.00 a.
Advertising Expense 150,000.00
Utilities Expense 100,000.00
Supplies Expense 50,000.00
Totals ₱ 5,000,000.00 ₱ 5,000,000.00

Salaries Payable
Rent Expense b.
Depreciation Expense - Shop Equipment c.
Income Summary d.
TOTAL
Dores Marie Pateno Hobby Shop Dores Marie Pateno Hobby Shop
Adjusting Transactions Adjusted Trial Balance
Dec. 31, 2021 Dec. 31, 2021
Debit
Debit Credit Cash ₱ 100,000.00
Accounts Receivable 500,000.00
Merchandise Inventory 500,000.00
₱ 500,000.00 d. ₱ 700,000.00 Prepaid Rent 200,000.00
b. 100,000.00 Shop Equipment 1,600,000.00
Accumulated Depreciation
c. 200,000.00 Accounts Payable
Salaries Payable
Pateno, Capital
Pateno, Withdrawals 100,000.00
Income Summary 200,000.00
Sales
Sales Discounts 100,000.00
Purchases 800,000.00
Purchases Returns & Allowances
30,000.00 Transportation-In 100,000.00
Salaries Expense 430,000.00
Rent Expense 100,000.00
Depreciation Expense - Shop Equipment 200,000.00
Advertising Expense 150,000.00
Utilities Expense 100,000.00
a. 30,000.00 Supplies Expense 50,000.00
100,000.00 Totals ₱ 5,230,000.00
200,000.00
700,000.00 d. 500,000.00
₱ 1,530,000.00 ₱ 1,530,000.00
by Shop
ce

Credit

₱ 400,000.00
400,000.00
30,000.00
1,300,000.00

2,900,000.00

200,000.00

₱ 5,230,000.00
Required:
Prepare the worksheet.

John Bala Maps John Bala

Unadjusted Trial Balance Adjusting Tra
Dec. 31, 2021 Dec. 31,

Debit Credit
Cash ₱ 31,000.00
Accounts Receivable 83,000.00
Merchandise Inventory 627,000.00 a.
Prepaid Insurance 54,000.00
Office Supplies 68,000.00
Office Equipment 370,000.00
Accumulated Depreciation ₱ 50,000.00
Accounts Payable 58,000.00
Bala, Capital 517,000.00
Bala, Withdrawals 87,000.00
Sales 2,675,000.00
Sales Returns & Allowances 26,000.00
Sales Discounts 23,000.00
Purchases 1,512,000.00
Purchases Returns & Allowances 14,000.00
Purchases Discounts 19,000.00
Transportation-In 38,000.00
Salaries Expense 327,000.00 e.
Advertising Expense 61,000.00
Rent Expense 26,000.00
Totals 3,333,000.00 3,333,000.00

Income Summary a.
Insurance Expense b.
Depreciation Expense - Office Equipment c.
Office Supplies Expense d.
Salaries Payable
TOTAL
 John Bala Maps John Bala Maps
Adjusting Transactions Adjusted Trial Balance
Dec. 31, 2021 Dec. 31, 2021

Debit Credit Debit

Cash ₱ 31,000.00
Accounts Receivable 83,000.00
₱ 532,000.00 a. ₱ 627,000.00 Merchandise Inventory 532,000.00
b. 18,000.00 Prepaid Insurance 36,000.00
d. 53,000.00 Office Supplies 15,000.00
Office Equipment 370,000.00
c. 25,000.00 Accumulated Depreciation
Accounts Payable
Salaries Payable
Bala, Capital
Bala, Withdrawals 87,000.00
Income Summary 95,000.00
Sales
Sales Returns & Allowances 26,000.00
Sales Discounts 23,000.00
Purchases 1,512,000.00
Purchases Returns & Allowances
9,000.00 Purchases Discounts
Transportation-In 38,000.00
Salaries Expense 336,000.00
Depreciation Expense - Shop Equipment 25,000.00
Insurance Expense 18,000.00
627,000.00 a. 532,000.00 Advertising Expense 61,000.00
18,000.00 Rent Expense 26,000.00
25,000.00 Office Supplies Expense 53,000.00
53,000.00 Totals ₱ 3,367,000.00
e. 9,000.00
₱ 1,264,000.00 ₱ 1,264,000.00
ce

Credit

₱ 75,000.00
58,000.00
9,000.00
517,000.00

2,675,000.00

14,000.00
19,000.00

₱ 3,367,000.00
Required:
1. Prepare the worksheet.
2. Prepare the financial statements.
3. Prepare the adjusting and closing entries.

Adjusting Entries:
a. Office Supplies Expense
Office Supplies

b. Advertising Expense
Prepaid Advertising

c. Salaries Expense
Salaries Payable

d. Depreciation Expense - Bldg.

Depreciation Expense - Equip.
Accumulated Depreciation - Bldg.
Accumulated Depreciation - Equip.

e. Income Summary
Merchandise Inventory

Merchandise Inventory
Income Summary

Closing Entries:
December 31 Sales
Purchases Returns & Allowances
Purchases Discounts
Income Summary

31 Income Summary
Sales Returns and Allowances
Sales Discounts
Purchases
Transportation In
Salaries Expense
Insurance Expense
Interest Expense
Advertising Expense
Office Supplies Expense
Travel Expense
Depreciation Expense - Bldg.
Depreciation Expense - Equip.
31 Income Summary
Sousa, Capital

31 Sousa, Capital
Sousa, Withdrawals
 Christine Sousa Bags
Unadjusted Trial Balance
Dec. 31, 2021
₱ 17,000.00
₱ 17,000.00 Debit
Cash ₱ 72,000.00
25,000.00 Accounts Receivable 136,000.00
25,000.00 Merchandise Inventory 598,000.00
Prepaid Advertising 75,000.00
21,000.00 Office Supplies 42,000.00
21,000.00 Land 400,000.00
Office Building 1,600,000.00
15,000.00 Accumulated Depreciation - Bldg.
20,000.00 Office Equipment 570,000.00
15,000.00 Accumulated Depreciation - Equip.
20,000.00 Accounts Payable
Salaries Payable
598,000.00 Notes Payable due in 2 yrs.
598,000.00 Mortgage Payable
Sousa, Capital
723,000.00 Sousa, Withdrawals 200,000.00
723,000.00 Income Summary
Sales
Sales Returns & Allowances 187,000.00
Sales Discounts 161,000.00
₱ 4,600,000.00 Purchases 2,643,000.00
133,000.00 Purchases Returns & Allowances
172,000.00 Purchases Discounts
₱ 4,905,000.00 Transportation In 72,000.00
Salaries Expense 862,000.00
₱ 4,444,000.00 Insurance Expense 25,000.00
₱ 187,000.00 Interest Expense 208,000.00
161,000.00 Advertising Expense -
2,643,000.00 Office Supplies Expense -
72,000.00 Travel Expense 188,000.00
883,000.00 Depreciation Expense - Bldg. -
25,000.00 Depreciation Expense - Equip. -
208,000.00 Total ₱ 8,039,000.00
25,000.00
17,000.00
188,000.00
15,000.00
20,000.00
586,000.00
586,000.00

200,000.00
200,000.00
ags Christine Sousa Bags
lance Adjusting Transactions
Dec. 31, 2021

Credit Debit Credit

e. 723,000.00 e. 598,000.00
b. 25,000.00
a. 17,000.00

₱ 100,000.00 d. 15,000.00

150,000.00 d. 20,000.00
74,000.00
- c. 21,000.00
200,000.00
1,100,000.00
1,510,000.00

- e. 598,000.00 e. 723,000.00
4,600,000.00

133,000.00
172,000.00

c. 21,000.00

b. 25,000.00
a. 17,000.00

d. 15,000.00
d. 20,000.00
₱ 8,039,000.00 ₱ 1,419,000.00 ₱ 1,419,000.00
 Christine Sousa Bags
Adjusted Trial Balance
Dec. 31, 2021

Debit Credit
Cash ₱ 72,000.00
Accounts Receivable 136,000.00
Merchandise Inventory 723,000.00
Prepaid Advertising 50,000.00
Office Supplies 25,000.00
Land 400,000.00
Office Building 1,600,000.00
Accumulated Depreciation - Bldg. ₱ 115,000.00
Office Equipment 570,000.00
Accumulated Depreciation - Equip. 170,000.00
Accounts Payable 74,000.00
Salaries Payable 21,000.00
Notes Payable due in 2 yrs. 200,000.00
Mortgage Payable 1,100,000.00
Sousa, Capital 1,510,000.00
Sousa, Withdrawals 200,000.00
Income Summary 125,000.00
Sales 4,600,000.00
Sales Returns & Allowances 187,000.00
Sales Discounts 161,000.00
Purchases 2,643,000.00
Purchases Returns & Allowances 133,000.00
Purchases Discounts 172,000.00
Transportation In 72,000.00
Salaries Expense 883,000.00
Insurance Expense 25,000.00
Interest Expense 208,000.00
Advertising Expense 25,000.00
Office Supplies Expense 17,000.00
Travel Expense 188,000.00
Depreciation Expense - Bldg. 15,000.00
Depreciation Expense - Equip. 20,000.00
Total ₱ 8,220,000.00 ₱ 8,220,000.00
 Christine Sousa Bags
Income Statement
For the year ended Dec. 31, 2021

Sales ₱ 4,600,000.00
Less: Sales Discounts 161,000.00
Sales Returns & Allowances 187,000.00 348,000.00
Net Sales ₱ 4,252,000.00
Less: Cost of Goods Sold
Beginning Inventory ₱ 598,000.00
Add: Net Purchases
Purchases ₱ 2,643,000.00
Transportation In 72,000.00
Less: Purchases Discounts ₱ 172,000.00
Purchases Returns & Allowances 133,000.00 305,000.00 2,410,000.00
Less: Ending Inventory 723,000.00 2,285,000.00
Gross Profit ₱ 1,967,000.00
Less: Expenses
Salaries Expense ₱ 883,000.00
Insurance Expense 25,000.00
Interest Expense 208,000.00
Advertising Expense 25,000.00
Office Supplies Expense 17,000.00
Travel Expense 188,000.00
Depreciation Expense - Bldg. 15,000.00
Depreciation Expense - Equip. 20,000.00 1,381,000.00
NET INCOME ₱ 586,000.00
 Christine Sousa Bags
Statement of Changes in Equity
For the year ended Dec. 31, 2021

Sousa, Capital, February 1 ₱ 1,510,000.00

Add: Net Income 586,000.00
Less: Withdrawals 200,000.00
Buenaflor, Capital, February 28 ₱ 1,896,000.00
 Christine Sousa Bags
Balance Sheet
Dec. 31, 2021

ASSETS

Current:
Cash ₱ 72,000.00
Accounts Receivable 136,000.00
Merchandise Inventory 723,000.00
Office Supplies 25,000.00
Prepaid Advertising 50,000.00 ₱ 1,006,000.00

Non-Current:
Land ₱ 400,000.00
Building ₱ 1,600,000.00
Less: Depreciation 115,000.00 1,485,000.00
Equipment ₱ 570,000.00
Less: Depreciation 170,000.00 400,000.00 2,285,000.00
TOTAL ASSETS ₱ 3,291,000.00

LIABILITIES

Current Liabilities:
Accounts Payable ₱ 74,000.00
Salaries Payable 21,000.00 ₱ 95,000.00

Non-Current Liabilities:
Notes Payable due in 2yrs. 200,000.00
Mortgage Payable 1,100,000.00 1,300,000.00
TOTAL LIABILITIES ₱ 1,395,000.00

EQUITY
Sousa, Capital, Dec. 31 1,896,000.00
TOTAL LIABILITIES & EQUITY ₱ 3,291,000.00
Required:
Prepare the income statement using the function of expense method.

Victoriano Navarette Traders

Income Statement
For the month ended Dec. 31, 2021

Sales
Less: Sales Discounts 210,000.00
Sales Returns & Allowances 280,000.00
Net Sales
Less: Cost of Goods Sold
Beginning Inventory ₱ 2,170,000.00
Add: Net Purchases
Purchases ₱ 4,720,000.00
Transportation In 50,000.00
Less: Purchases Discounts ₱ 70,000.00
Purchases Returns & Allowances 110,000.00 180,000.00 4,590,000.00
Less: Ending Inventory 1,430,000.00
Gross Profit
Less: Operating Expenses
Selling Expenses:
Salaries Expense - Selling ₱ 1,140,000.00
Transportation Out 170,000.00
Depreciation Expense - Store Equipment 160,000.00
Selling Supplies Expense 80,000.00 ₱ 1,550,000.00
General & Administrative Expenses:
Salaries Expense - General ₱ 920,000.00
Office Supplies Expense 460,000.00
Depreciation Expense - Office Equipment 320,000.00
Insurance Expense 55,000.00
Miscellaneous Expenses 30,000.00 1,785,000.00
NET INCOME
₱ 9,630,000.00

490,000.00
₱ 9,140,000.00

5,330,000.00
₱ 3,810,000.00

3,335,000.00
₱ 475,000.00
Required:
Prepare the income statement using the function of expense method.

Marissa Babilonia Health Store

Income Statement
For the month ended Dec. 31, 2021

Sales
Less: Sales Discounts ₱ 140,000.00
Sales Returns & Allowances 260,000.00
Net Sales
Less: Cost of Goods Sold
Beginning Inventory ₱ 1,160,000.00
Add: Net Purchases
Purchases ₱ 6,710,000.00
Transportation In 100,000.00
Less: Purchases Discounts ₱ 180,000.00
Purchases Returns & Allowances 250,000.00 430,000.00 6,380,000.00
Less: Ending Inventory 1,040,000.00
Gross Profit
Less: Operating Expenses
Selling Expenses:
Salaries Expense - Selling ₱ 960,000.00
Transportation Out 260,000.00
Advertising Expense 150,000.00
Depreciation Expense - Store Equipment 140,000.00
Selling Supplies Expense 70,000.00 ₱ 1,580,000.00
General & Administrative Expenses:
Salaries Expense - General ₱ 1,130,000.00
Office Supplies Expense 430,000.00
Depreciation Expense - Office Equipment 110,000.00
Miscellaneous Expenses 90,000.00 1,760,000.00
NET LOSS
₱ 9,810,000.00

400,000.00
₱ 9,410,000.00

6,500,000.00
₱ 2,910,000.00

3,340,000.00
-₱ 430,000.00
Required:

Prepare the income statement using the function of expense method. In a separate schedule, show the computati

Ramon Woo Milk Products

Statement of Cost Goods Sold
For the month ended June 30, 2021

Merchandise Inventory, 1/1/2021 ₱69,350.00

Add:
Purchases ₱364,000.00
Less:
Purchases Returns and Allowances ₱3,400.00
Purchases Discounts 1,990.00 358,610.00
Merchandise Inventory, 6/30/2021 65,520.00
Cost of Goods Sold ₱362,440.00
. In a separate schedule, show the computation of cost of goods sold.

Ramon Woo Milk Products

Income Statement
For the month ended June 30, 2021

Sales ₱ 731,000.00
Less: Sales Discounts ₱ 10,400.00
Sales Returns & Allowances 18,030.00 28,430.00
Net Sales ₱ 702,570.00
Less: Cost of Goods Sold 362,440.00
Gross Profit ₱ 340,130.00
Less: Operating Expenses
Selling Expenses ₱ 132,900.00
General & Administrative Expenses 116,700.00 249,600.00
NET INCOME ₱ 90,530.00
Required:
Prepare the closing entries.

Sales ₱ 1,000,000.00
Purchases Returns and Allowances 6,000.00
Purchases Discounts 13,200.00
Income Summary ₱ 1,019,200.00

Income Summary 938,000.00

Sales Returns & Allowances 3,000.00
Sales Discounts 9,000.00
Purchases 660,000.00
Transportation In 16,000.00
Operating Expenses 250,000.00

Income Summary 71,200.00

Torres, Capital 71,200.00

Torres, Capital 71,200.00

Torres, Withdrawals 71,200.00
Beginning Inventory ₱ 128,000.00
Add: Purchases ₱ 660,000.00
Transportation In 16,000.00 676,000.00
Less: Purchases Returns & Allowances ₱ 6,000.00
Purchases Discounts 13,200.00 19,200.00
Goods Available for Sale ₱ 784,800.00
Less: Ending Inventory 118,000.00
Cost of Goods Sold ₱ 666,800.00

Net Sales ₱ 988,000.00

Less: COGS 666,800.00
Gross Profit ₱ 321,200.00
Less: Operating Expenses 250,000.00
NET INCOME ₱ 71,200.00