Problem #9

Comprehensive Problem

Listed below are the Feb. 1, 2019 account balances of the Teresita Buenaflor Shoes:

110 Cash ₱ 33,000

120 Accounts Receivable 192,000
130 Merchandise Inventory 413,000
140 Supplies 51,000
150 Prepaid Insurance 48,000
160 Land 460,000
170 Building 1,750,000
175 Accumulated Depreciation- Bldg. ₱ 350,000
180 Equipment 2,310,000
185 Accumulated Depreciation- Equipt. 630,000
210 Accounts Payable 108,000
220 Salaries Payable
230 Mortgage Payable 2,600,000
310 Buenaflor, Capital 1,569,000
320 Buenaflor, Withdrawals
330 Income Summary
410 Sales
420 Sales Returns and Allowances
430 Sales Discounts
510 Purchases
520 Purchases Returns and Allowances
530 Purchases Discounts
540 Transportation in
610 Salaries Expense
620 Supplies Expense
630 Insurance Expense
640 Depreciation Expense- Bldg.
650 Depreciation Expense- Equipt.
660 Transportation out
670 Advertising Expense
680 Interest Expense
690 Miscellaneous Expense
₱ 5,257,000 ₱ 5,257,000
 Journal Entries
DATE PARTICULARS DEBIT
Feb-01 Cash 113,000
Accounts Receivable

2 Accounts Payable 64,000

Cash
Purchase discounts

4 Purchases 170,000
Accounts payable

5 Accounts Receivable 270,000

Sales

7 Advertising Expense 6,000

Cash

7 Cash 250,000
Sales

8 Accounts payable 170,000

Purchase discounts
Cash

9 Transportation in 4,000
Cash

10 Sales returns and allowances 70,000

Accounts receivable

12 Cash 196,000
Sales discounts 4,000
Accounts receivable

14 Interest expense 26,000

Cash

15 Salaries expense 51,000

Cash

16 Accounts receivable 392,000

Sales

18 Transportation out 4,000

Cash
19 Supplies 21,000
Cash

20 Purchases 125,000
Accounts payable

22 Miscellaneous expense 7,000

Cash

23 Cash 384,160
Sales discounts 7,840
Accounts receivable

24 Purchases 373,000
Accounts payable

24 Transportation in 9,000
Cash

25 Accounts receivable 420,000

Sales

26 Sales returns and allowances 71,000

Accounts receivable

28 Buenaflor, Withdrawals 400,000

Cash

28 Accounts payable 25,000

Purchase returns and allowances
 Adjusting Journal Entries
CREDIT DATE PARTICULARS
FEB 28 Salaries expense
113,000 Salaries payable

28 Insurance expense
62,080 Prepaid Insurance
1,920 64,000 X 3%
28 Depreciation Expense- Bldg.
Depreciation Expense- Equipt.
170,000 Accumulated Depreciation- Bldg.
Accumulated Depreciation- Equipt.

270,000 28 Supplies expense

Supplies

6,000

250,000

5,100 170,000 X 3%
164,900

4,000

70,000

200,000 X 2%
200,000 270,000-70,000 SALES RET.

26,000

51,000

392,000

4,000
21,000

125,000

7,000

392,000 X 2%
392,000

373,000

9,000

420,000

71,000

400,000

25,000
Adjusting Journal Entries
PARTICULARS DEBIT CREDIT DATE
51,000 FEB 28
51,000

2,000
ce 2,000

se- Bldg. 9,000 28

se- Equipt. 12,000
epreciation- Bldg. 9,000
epreciation- Equipt. 12,000

58,000
58,000 51,000 + 21,000 -14,000

28

28
 Closing Entries
PARTICULARS DEBIT CREDIT
Merchandise Inventory, end. 397,000
Sales 1,332,000
Purchases Returns and Allowances 25,000
Purchases Discounts 7,020
Income Summary 1,761,020

Income Summary 1,472,840

Purchases 668,000
Merchandise Inventory, beg. 413,000
Sales Discounts 11,840
Sales Returns and Allowances 141,000
Transportation in 13,000
Salaries Expense 102,000
Supplies Expense 58,000
Insurance Expense 2,000
Depreciation Expense- Bldg. 9,000
Depreciation Expense- Equipt. 12,000
Transportation out 4,000
Advertising Expense 6,000
Interest Expense 26,000
Miscellaneous Expense 7,000

Income Summary 288,180

Buenaflor, Capital 288,180

Buenaflor, Capital 400,000

Buenaflor, Withdrawals 400,000
 GENERAL LEDGERS
ASSETS
ACCOUNT NAME: Cash
ACCOUNT CODE: 110
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 BEGINNING CASH ₱ 33,000
1 COLLECTION 113,000
2 PAYMENT ₱ 62,080
7 SOLD MERCH IN CASH 250,000
7 PAID ADVERTISING 6,000
8 PAYMENT 164,900
9 PAID FREIGHT 4,000
12 COLLECTION 196,000
14 PAID INTEREST 26,000
15 PAID SALARIES 51,000
18 Feb-01 4,000
19 BOUGHT SUPPLIES 21,000
22 PAID MISCELLANEOUS 7,000
23 COLLECTION 384,160
24 PAYMENT 9,000
28 WIDRAWALS 400,000

ACCOUNT NAME: Accounts Receivable

ACCOUNT CODE: 120
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 BEGINNING REC ₱ 192,000
1 COLLECTION ₱ 113,000
5 SOLD MERCH ON ACC 270,000
10 SALES RETURNS 70,000
12 COLLECTION 200,000
16 SOLD MERCH ON ACC 392,000
23 COLLECTION 392,000
25 SOLD MERCH ON ACC 420,000
26 SALES RETURNS 71,000

ACCOUNT NAME: Merchandise Inventory

ACCOUNT CODE: 130
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 Beginning balance 413,000
28 CLOSING 397,000
28 CLOSING 413,000

ACCOUNT NAME: Supplies

ACCOUNT CODE: 140
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 beginnning balance 51,000
19 bought Supplies 21,000
28 ADJUSTMENTS 58,000

ACCOUNT NAME: Prepaid Insurance

ACCOUNT CODE: 150
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 Beginning Balance 48,000
28 Adjustments 2,000

ACCOUNT NAME: Land

ACCOUNT CODE: 160
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 Beginning balance land 460,000

ACCOUNT NAME: Building

ACCOUNT CODE: 170
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 Beg balance building 1,750,000

ACCOUNT NAME: Accumulated Depreciation- Bldg.

ACCOUNT CODE: 175
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 Beginning balance 350,000
28 ADJUSTMENTS 9,000

ACCOUNT NAME: Equipment

ACCOUNT CODE: 180
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 Beginning Balance eqp. 2,310,000

ACCOUNT NAME: Accumulated Depreciation- Equipt.

ACCOUNT CODE: 185
DATE PARTICULARS REF DEBIT CREDIT
Feb-01 Beginning balance 630,000
28 ADJUSTMENTS 12,000
 GENERAL LEDGERS
LIABILITIES
ACCOUNT NAME: Accounts Payable
ACCOUNT CODE: 210
BALANCE DATE PARTICULARS REF
₱ 33,000 FEB 1 Beginning AP
146,000 2 PAYMENT
83,920 4 PURCH ON ACC
333,920 8 PAYMENT
327,920 20 PURCH ON ACC
163,020 24 PURCH ON ACC
159,020 28 PURCH RET.
355,020
329,020 ACCOUNT NAME: Salaries Payable
278,020 ACCOUNT CODE: 220
274,020 DATE PARTICULARS REF
253,020 FEB 28 ADJUSTMENTS
246,020
630,180 ACCOUNT NAME: Mortgage Payable
621,180 ACCOUNT CODE: 230
₱ 221,180 DATE PARTICULARS REF
FEB 1 Beginning mort.

BALANCE
₱ 192,000
79,000
349,000
279,000
79,000
471,000
79,000
499,000
₱ 428,000

BALANCE
413,000
810,000
₱ 397,000

BALANCE
 51,000
72,000
₱ 14,000

BALANCE
48,000
₱ 46,000

BALANCE
₱ 460,000

BALANCE
₱ 1,750,000

BALANCE
350,000
₱ 359,000

BALANCE
₱ 2,310,000

BALANCE
630,000
₱ 642,000
GENERAL LEDGERS
LIABILITIES
ACCOUNT NAME:
ACCOUNT CODE:310
DEBIT CREDIT BALANCE DATE
108,000 108,000 FEB 28
64,000 44,000 28
170,000 214,000 28
170,000 44,000
125,000 169,000 ACCOUNT NAME:
373,000 542,000 ACCOUNT CODE: 320
25,000 ₱ 517,000 DATE
FEB 28
28

DEBIT CREDIT BALANCE ACCOUNT NAME:

51,000 ₱ 51,000 ACCOUNT CODE: 330
DATE
FEB 28
28
DEBIT CREDIT BALANCE 28
2,600,000 ₱ 2,600,000
 GENERAL LEDGERS
EQUITY
Buenaflor, Capital

PARTICULARS REF DEBIT CREDIT BALANCE

Beginning Capital 1,569,000 1,569,000
CLOSING 288,180 1,857,180
CLOSING 400,000 ₱ 1,457,180

Buenaflor, Withdrawals

PARTICULARS REF DEBIT CREDIT BALANCE

Buenaflor, Withdrawals 400,000 400,000
CLOSING 400,000 -

Income Summary

PARTICULARS REF DEBIT CREDIT BALANCE

CLOSING 1,761,020 1,761,020
CLOSING 1,472,840 288,180
CLOSING 288,180 -
 GENERAL LEDGERS
INCOME
ACCOUNT NAME: Sales
ACCOUNT CODE: 410
DATE PARTICULARS REF DEBIT CREDIT BALANCE
Feb-05 sold merch on acc 270,000 270,000
7 sold merch in cash 250,000 520,000
16 sold merch on acc 392,000 912,000
25 Sold merch on acc 420,000 1,332,000
28 CLOSING 1,332,000 -

ACCOUNT NAME: Sales Returns and Allowances

ACCOUNT CODE: 420
DATE PARTICULARS REF DEBIT CREDIT BALANCE
Feb-10 Sales return 70,000 70,000
26 Sales return 71,000 141,000
28 CLOSING 141,000 -

ACCOUNT NAME: Sales Discounts

ACCOUNT CODE: 430
DATE PARTICULARS REF DEBIT CREDIT BALANCE
Feb-12 Discount 4,000 4,000
23 Discount 7,840 11,840
11,840 -
 GENERAL LEDGERS
EXPENSES
ACCOUNT NAME: Purchases
ACCOUNT CODE: 510
DATE PARTICULARS REF DEBIT CREDIT
Feb-04 Purchases 170,000
20 Purchases 125,000
24 Purchases 373,000
28 CLOSING 668,000

ACCOUNT NAME: Purchases Returns and Allowances

ACCOUNT CODE: 520
DATE PARTICULARS REF DEBIT CREDIT
28 Purch ret 25,000
28 CLOSING 25,000

ACCOUNT NAME: Purchases Discounts

ACCOUNT CODE: 530
DATE PARTICULARS REF DEBIT CREDIT
Feb-02 Disc on payment 1,920
8 Disc on payment 5,100
28 CLOSING 7,020

ACCOUNT NAME: Transportation in

ACCOUNT CODE: 540
DATE PARTICULARS REF DEBIT CREDIT
Feb-09 Paid freight 4,000
24 Paid freight 9,000
28 CLOSING 13,000

ACCOUNT NAME: Salaries Expense

ACCOUNT CODE: 610
DATE PARTICULARS REF DEBIT CREDIT
Feb-15 Paid salaries 51,000
28 ADJUSTMENTS 51,000
28 CLOSING 102,000

ACCOUNT NAME: Supplies Expense

ACCOUNT CODE: 620
DATE PARTICULARS REF DEBIT CREDIT
Feb-28 ADJUSTMENTS 58,000
28 CLOSING 58,000

ACCOUNT NAME: Insurance Expense

ACCOUNT CODE: 630
DATE PARTICULARS REF DEBIT CREDIT
Feb-28 ADJUSTMENTS 2,000
28 CLOSING 2,000

ACCOUNT NAME: Depreciation Expense- Bldg.

ACCOUNT CODE: 640
DATE PARTICULARS REF DEBIT CREDIT
Feb-28 ADJUSTMENTS 9,000
28 CLOSING 9,000

ACCOUNT NAME: Depreciation Expense- Equipt.

ACCOUNT CODE: 650
DATE PARTICULARS REF DEBIT CREDIT
Feb-28 ADJUSTMENTS 12,000
28 CLOSING 12,000

ACCOUNT NAME: Transportation out

ACCOUNT CODE: 660
DATE PARTICULARS REF DEBIT CREDIT
Feb-18 PAID FREIGHT 4,000
28 CLOSING 4,000

ACCOUNT NAME: Advertising Expense

ACCOUNT CODE: 670
DATE PARTICULARS REF DEBIT CREDIT
Feb-07 PAID ADVERTISING 6,000
28 CLOSING 6,000

ACCOUNT NAME: Interest Expense

ACCOUNT CODE: 680
DATE PARTICULARS REF DEBIT CREDIT
Feb-14 PAID INTEREST 26,000
28 CLOSING 26,000

ACCOUNT NAME: Miscellaneous Expense

ACCOUNT CODE: 690
DATE PARTICULARS REF DEBIT CREDIT
Feb-22 PAID MISCELLANEOUS 7,000
28 CLOSING 7,000
BALANCE
170,000
295,000
668,000
-

BALANCE
25,000
-

BALANCE
1,920
7,020
-

BALANCE
4,000
13,000
-

BALANCE
51,000
102,000
-

BALANCE
58,000
-
BALANCE
2,000
-

BALANCE
9,000
-

BALANCE
12,000
-

BALANCE
4,000
-

BALANCE
6,000
-

BALANCE
26,000
-

BALANCE
7,000
-
-

UNADJUSTED
CODE ACCOUNT TITLE DEBIT CREDIT
110 Cash ₱ 221,180
120 Accounts Receivable 428,000
130 Merchandise Inventory 413,000
140 Supplies 72,000
150 Prepaid Insurance 48,000
160 Land 460,000
170 Building 1,750,000
175 Accumulated Depreciation- Bldg. ₱ 350,000
180 Equipment 2,310,000
185 Accumulated Depreciation- Equipt. 630,000
210 Accounts Payable 517,000
220 Salaries Payable
230 Mortgage Payable 2,600,000
310 Buenaflor, Capital 1,569,000
320 Buenaflor, Withdrawals 400,000
330 Income Summary
410 Sales 1,332,000
420 Sales Returns and Allowances 141,000
430 Sales Discounts 11,840
510 Purchases 668,000
520 Purchases Returns and Allowances 25,000
530 Purchases Discounts 7,020
540 Transportation in 13,000
610 Salaries Expense 51,000
620 Supplies Expense
630 Insurance Expense
640 Depreciation Expense- Bldg.
650 Depreciation Expense- Equipt.
660 Transportation out 4,000
670 Advertising Expense 6,000
680 Interest Expense 26,000
690 Miscellaneous Expense 7,000

- TOTALS ₱ 7,030,020 ₱ 7,030,020

PROFIT
 Teresita Buenaflor Shoes
Worksheet
For the month ended February 28, 2019
ADJUSTMENTS ADJUSTED
DEBIT CREDIT DEBIT CREDIT
₱ 221,180
428,000
413,000
₱ 58,000 14,000
2,000 46,000
460,000
1,750,000
9,000 ₱ 359,000
2,310,000
12,000 642,000
517,000
51,000 51,000
2,600,000
1,569,000
400,000

1,332,000
141,000
11,840
668,000
25,000
7,020
13,000
₱ 51,000 102,000
58,000 58,000
2,000 2,000
9,000 9,000
12,000 12,000
4,000
6,000
26,000
7,000

₱ 132,000 ₱ 132,000 ₱ 7,102,020 ₱ 7,102,020

 INCOME STATEMENT BALANCE SHEET
DEBIT CREDIT DEBIT CREDIT
₱ 221,180
428,000
₱ 413,000 ₱ 397,000 397,000
14,000
46,000
460,000
1,750,000
₱ 359,000
2,310,000
642,000
517,000
51,000
2,600,000
1,569,000
400,000

1,332,000
141,000
11,840
668,000
25,000
7,020
13,000
102,000
58,000
2,000
9,000
12,000
4,000
6,000
26,000
7,000

₱ 1,472,840 ₱ 1,761,020 ₱ 6,026,180 ₱ 5,738,000

₱ 288,180 ₱ 288,180
₱ 1,761,020 ₱ 1,761,020 ₱ 6,026,180 ₱ 6,026,180
 Teresita Buenaflor Shoes
INCOME STATEMENT
For the month ended February 28, 2019
Sales ₱ 1,332,000
LESS: Sales Returns and Allowances ₱ 141,000
Sales Discounts 11,840
Net Sales

Merchandise Inventory, beg. 413,000

Purchases 668,000
LESS: Purchases Discounts 7,020
Purchases Returns and Allowances 25,000
Transportation in 13,000
Net Purchases 648,980
Total Goods Available for Sale (413,000 + 648,980) 1,061,980
LESS: Merchandise Inventory, end. 397,000
Less: Cost of Sales

Gross profit

Operating Expenses
Salaries Expense 102,000
Supplies Expense 58,000
Insurance Expense 2,000
Depreciation Expense- Bldg. 9,000
Depreciation Expense- Equipt. 12,000
Transportation out 4,000
Advertising Expense 6,000
Miscellaneous Expense 7,000
Finance Costs
Interest Expense 26,000

Net Profit
₱ 1,179,160

664,980

₱ 514,180

226,000

₱ 288,180
 Teresita Buenaflor Shoes
Statement of Changes in Owner's Equity
For the month ended February 28, 2019

Beginnning Capital Feb 1, 2019 ₱ 1,569,000

ADD: Net Income 288,180
Total 1,857,180
Less: Buenaflor Widrawals 400,000
Buenaflor, Capital ending Feb 28, 2019 ₱ 1,457,180
 Teresita Buenaflor Shoes
Statement of Financial Position
As of February 28, 2019
ASSETS
Current Assets
Cash and cash equivalents ₱ 221,180
Trade and other receivables 428,000
Inventory 397,000
Prepaid Assets 60,000
Total Current Assets 1,106,180

Noncurrent Assets
Property, plant, and equipment 3,519,000

TOTAL ASSETS ₱ 4,625,180

LIABILITIES
Current Liabilities
Trade and other payables 568,000
Short-term borrowings -
Current portion of long-term borrowings -
Total Current Liabilities 568,000

Noncurrent Liabilities
Long term borrowings -
Mortgage payable 2,600,000
Total noncurrent Liabilities 2,600,000

TOTAL LIABILITIES 3,168,000

EQUITY
Buenaflor, Capital 1,457,180

TOTAL LIABILITIES AND EQUITY ₱ 4,625,180