Mr. Juan Lopez opened a mini grocery store with business name Lopez Fiesta Mart.

Operations began on December 1, 20XX, and the following transactions were completed
during the month:

The business was registered as single proprietorship with the Department of

1 Trade and Industry, Juan Lopez invested ₱39,000.
2 Bought computer equipment for ₱10,000 cash. (OR, Sales Invoice)
Bought merchandise on account from LOWTOWN Supply Co. ₱15, 900, Term,
2 2/10, n/30 (Receiving Report; Sales invoice from Supplier)
3 Bought office supplies on cash basis for ₱700 (OR)
Sold merchandise on account ₱15,200 F0B Destination, terms 2/10, n/30. Cost
4 of Merchandise P11,000 (Sales Invoice)
5 Paid ₱200 freight on December 4 sale (OR)
6 Received credit memo LOWTOWN Supply Co. for merchandise return ₱300
11 Paid LOWTOWN (Collection Receipt)
13 Collected from December 4 customers (Collection Receipt)
14 Bought merchandise on cash basis for ₱14,400 (RR, Sales Invoice)
15 Salaried paid P1,500
16 Borrowed money from RCBC Bank, signed a promissory note for ₱12,000 Page 2
Received refund from a supplier on cash purchase of December 14, ₱500.
17 (Collection Receipt)
Bought merchandise from MESDA, ₱14,200 FOB Shipping. term, 2/10, n/30
18 (RR/Sales Invoice)
20 Paid freight on December 18 purchase ₱700 (OR)
23 Sold merchandise for ₱16, 400, Cost of merchandise P12,000. (Sales Invoice)
26 Bought merchandise tor cash ₱12,300 (RR/Sales Invoice)
Paid MESDA on December 18 purchase, ₱9.000. No discount allowed on
27 partial payment (Collection Receipt)
28 Lopez get cash from the business, P2,008
29 Made refund to cash customer for defective merchandise, P900.
Sold merchandise on account P13,700, term 2/10, n/30. Cost of merchandise
30 P9,000
Paid the following: Salaries P1,500; Advertising P1,000; Rent P3,500; Utilities
31 P400.

The ending inventory forDecember 31 is P25,000.

Additional information for year-end adjustments.

Ø The useful life of the equipment is 5 years with a residual value of P1,000.
Ø Remaining unused supplies worth ₱300. Use asset method.

Acct. No Account Titles

110 Cash
120 Accounts Receivable
130 Supplies
140 Merchandise Inventory
150 Equipment
160 Accumulated Depreciation
210 Accounts Payable
220 Notes Payable
310 Lopez, Capital
320 Lopez, Drawings
410 Sales
420 Sales Returns & Allowances
430 Sales Discounts
510 Purchases
520 Purchase Returns & Allowances
530 Purchase Discount
540 Freight In
610 Freight Out
620 Salaries Expense
630 Advertising Expense
640 Rent Expense
650 Utilities Expense
660 Supplies Expense
670 Depreciation Expense
Accounting for Merchandising Business
GENERAL JOURNAL - Page 01
Date Account Title/Explanation PR Debit
1 Cash 110 39,000
Lopez, Capital 310
To record initial investment.

2 Equipment 150 10,000

Cash 110
To record purchase of computer equipment.

2 Purchases 510 15,900

Accounts Payable 210
To record purchase of merchandise on account.

3 Supplies 130 700

Cash 110
To record purchase of supplies.

4 Accounts Receivable 120 15,200

Sales 410
To record sales on account.

5 Freight Out 610 200

Cash 110
To record freight on sale.

6 Accounts Payable 210 300

Purchase Returns & Allowances 520
To record credit memo from LOWTOWN Supply Co.

11 Accounts Payable 210 15,600

Purchase Discount 530
Cash 110
To record payment of accounts payable to LOWTOWN

13 Cash 110 14,896

Sales Discounts 430 304
Accounts Receivable 120
To record collections of Accounts Receivable

14 Purchases 510 14,400

Cash 110
To record purchase of merchandise

15 Salaries Expense 620 1,500

Cash 110
To record payment of salaries.
 GENERAL JOURNAL - PAGE 02
Date Account Title/Explanation PR Debit
16 Cash 110 12,000
Notes Payable 220
To record borrowed money from bank

17 Cash 110 500

Purchase Returns & Allowances 520
To record refund from supplier

18 Purchases 510 14,200

Accounts Payable 210
To record purchase of merchandise on account

20 Freight In 540 700

Cash 110
To record freight on purchases

23 Cash 110 16,400

Sales 410
To record cash sales

26 Purchases 510 12,300

Cash 110
To record purchase of merchandise

27 Accounts Payable 210 9,000

Cash 110
To record partial payment to MESDA

28 Lopez, Drawings 320 2,008

Cash 110
To record withdrawals

29 Sales Returns & Allowances 420 900

Cash 110
To record refund to customer.

30 Accounts Receivable 120 13,700

Sales 410
To record sales on account

31 Salaries Expense 620 1,500

Advertising Expense 630 1,000
Rent Expense 640 3,500
Utilities Expense 650 400
Cash 110
To record various expenses
URNAL - Page 01
Credit

39,000

10,000

15,900

700

15,200

200

300

312
15,288

15,200

14,400

1,500
URNAL - PAGE 02
Credit

12,000

500

14,200

700

16,400

12,300

9,000

2,008

900

13,700

6,400
 Account 110 Cash
Date Description Post Debit Credit

FA 1 Initial Investment GJ1 39,000

IA 2 Purchase of Equipment GJ1 10,000
OA 3 Purchase of supplies GJ1 700
OA 5 Payment of Freight on sales GJ1 200
OA 11 Payment of Merchandise GJ1 15,288
OA 13 Collection of Accounts Rec. GJ1 14,896
OA 14 Purchase of Merchandise GJ1 14,400
OA 15 Payment of Salaries GJ1 1,500
FA 16 Borrowed money from bank GJ2 12,000
OA 17 Refund from supplier GJ2 500
OA 20 Payment of Freight in GJ2 700
OA 23 Cash Sales GJ2 16,400
OA 26 Purchase of Merchandise GJ2 12,300
OA 27 Payment of merchandise GJ2 9,000
FA 28 Withdrawals GJ2 2,008
OA 29 Refund to Customer GJ2 900
OA 31 Payment of various exp. GJ2 6,400

Account 120 Accounts Receivable

Date Description Post Debit Credit
4 GJ1 15,200
13 GJ1 15,200
30 GJ1 13,700

Account 130 Supplies

Date Description Post Debit Credit
3 GJ1 700
31 GJ3 400

Account 140 Merchandise Inventory

Date Description Post Debit Credit
31 GJ3 25,000

Account 150 Equipment

Date Description Post Debit Credit
2 GJ1 10,000
Account 160 Accumulated Depreciation
Date Description Post Debit Credit
31 GJ3 150

Account 210 Accounts Payable

Date Description Post Debit Credit
2 GJ1 15,900
6 GJ1 300
11 GJ1 15,600
18 GJ2 14,200
27 GJ2 9,000

Account 220 Notes Payable

Date Description Post Debit Credit
16 GJ2 12,000

Account 310 Lopez, Capital

Date Description Post Debit Credit
1 GJ1 39,000
31 Closing Entries GJ3 4,058
31 Closing Entries GJ3 2,008

Account 320 Lopez, Drawings

Date Description Post Debit Credit
28 GJ2 2,008
31 Closing Entries GJ3 2,008

Account 410 Sales

Date Description Post Debit Credit
4 GJ1 15,200
23 GJ2 16,400
30 GJ2 13,700
31 Closing Entries GJ3 45,300

Account 420 Sales Returns & Allowances

Date Description Post Debit Credit
29 GJ2 900
 31 Closing Entries GJ3 900

Account 430 Sales Discounts

Date Description Post Debit Credit
13 GJ1 304
31 Closing Entries GJ3 304

Account 510 Purchases

Date Description Post Debit Credit
2 GJ1 15,900
14 GJ1 14,400
18 GJ2 14,200
26 GJ2 12,300
31 Closing Entries GJ3 56,800

Account 520 Purchase Returns & Allowances

Date Description Post Debit Credit
6 GJ1 300
17 GJ2 500
31 Closing Entries GJ3 800

Account 530 Purchase Discount

Date Description Post Debit Credit
11 GJ1 312
31 Closing Entries GJ3 312

Account 540 Freight In

Date Description Post Debit Credit
20 GJ2 700
31 Closing Entries GJ3 700

Account 610 Freight Out

Date Description Post Debit Credit
5 GJ1 200
31 Closing Entries GJ3 200

Account 620 Salaries Expense

 Date Description Post Debit Credit
15 GJ1 1,500
30 GJ2 1,500
31 Closing Entries GJ3 3,000

Account 630 Advertising Expense

Date Description Post Debit Credit
30 GJ2 1,000
31 Closing Entries GJ3 1,000

Account 640 Rent Expense

Date Description Post Debit Credit
30 GJ2 3,500
31 Closing Entries GJ3 3,500

Account 650 Utilities Expense

Date Description Post Debit Credit
30 GJ2 400
31 Closing Entries GJ3 400

Account 660 Supplies Expense

Date Description Post Debit Credit
31 GJ3 400
31 Closing Entries GJ3 400

Account 670 Depreciation Expense

Date Description Post Debit Credit
31 GJ3 150
31 Closing Entries GJ3 150

Account 700 Income Summary

Date Description Post Debit Credit
CE Merchandise Inventory GJ3 25,000
CE To close sales accounts GJ3 44,096
CE To close purchases accounts GJ3 56,388
CE To close expense account GJ3 8,650
CE To close income to capital accounts GJ3 4,058
 Cash
Balance
Debit Credit
39,000
29,000
28,300
28,100
12,812
27,708
13,308
11,808
23,808
24,308
23,608
40,008
27,708
18,708
16,700
15,800
9,400

Accounts Receivable
Balance
Debit Credit
15,200
0
13,700

Supplies
Balance
Debit Credit
700
300

Merchandise Inventory
Balance
Debit Credit
25,000

Equipment
Balance
Debit Credit
10,000
ccumulated Depreciation
Balance
Debit Credit
150

Accounts Payable
Balance
Debit Credit
15,900
15,600
0
14,200
5,200

Notes Payable
Balance
Debit Credit
12,000

Lopez, Capital
Balance
Debit Credit
39,000
43,058
41,050

Lopez, Drawings
Balance
Debit Credit
2,008
0

Sales
Balance
Debit Credit
15,200
31,600
45,300
0

les Returns & Allowances

Balance
Debit Credit
900
 0

Sales Discounts
Balance
Debit Credit
304
0

Purchases
Balance
Debit Credit
15,900
30,300
44,500
56,800
0

hase Returns & Allowances

Balance
Debit Credit
300
800
0

Purchase Discount
Balance
Debit Credit
312
0

Freight In
Balance
Debit Credit
700
0

Freight Out
Balance
Debit Credit
200
0

Salaries Expense
 Balance
Debit Credit
1,500
3,000
0

Advertising Expense
Balance
Debit Credit
1,000
0

Rent Expense
Balance
Debit Credit
3,500
0

Utilities Expense
Balance
Debit Credit
400
0

Supplies Expense
Balance
Debit Credit
400
0

Depreciation Expense
Balance
Debit Credit
150
0

Income Summary
Balance
Debit Credit
25,000
69,096
12,708
4,058
0
 Lopez Fiesta Mart
Unadjusted Trial Balance
December 31, 2021

Acct No. Account Titles Debit Credit

110 Cash 9,400
120 Accounts Receivable 13,700
130 Supplies 700
140 Merchandise Inventory 0
150 Equipment 10,000
160 Accumulated Depreciation 0
210 Accounts Payable 5,200
220 Notes Payable 12,000
310 Lopez, Capital 39,000
320 Lopez, Drawings 2,008
410 Sales 45,300
420 Sales Returns & Allowances 900
430 Sales Discounts 304
510 Purchases 56,800
520 Purchase Returns & Allowances 800
530 Purchase Discount 312
540 Freight In 700
610 Freight Out 200
620 Salaries Expense 3,000
630 Advertising Expense 1,000
640 Rent Expense 3,500
650 Utilities Expense 400
660 Supplies Expense 0
670 Depreciation Expense 0
Totals 102,612 102,612
 GENERAL JOURNAL - Page 03
Date Account Title/Explanation PR Debit
31 Depreciation Expense 670 150
Accumulated Depreciation 160
To record depreciation of Equipment

31 Supplies Expense 660 400

Supplies 130
To record supplies used
URNAL - Page 03
Credit

150

400
 Lopez Fiesta Mart
Adjusted Trial Balance
December 31, 2021

Acct No. Account Titles Debit Credit

110 Cash 9,400
120 Accounts Receivable 13,700
130 Supplies 300
140 Merchandise Inventory 0
150 Equipment 10,000
160 Accumulated Depreciation 150
210 Accounts Payable 5,200
220 Notes Payable 12,000
310 Lopez, Capital 39,000
320 Lopez, Drawings 2,008
410 Sales 45,300
420 Sales Returns & Allowances 900
430 Sales Discounts 304
510 Purchases 56,800
520 Purchase Returns & Allowances 800
530 Purchase Discount 312
540 Freight In 700
610 Freight Out 200
620 Salaries Expense 3,000
630 Advertising Expense 1,000
640 Rent Expense 3,500
650 Utilities Expense 400
660 Supplies Expense 400
670 Depreciation Expense 150
Totals 102,762 102,762
 Lopez Fiesta Mart
Statement of Cost of Goods Sold
December 31, 2021

Beginning Inventory 0
Add: Purchases 56,800
Freight In 700 57,500
Total 57,500
Less: Purchase Returns & Allowances 800
Purchase Discount 312 1,112
Total Goods Available for Sale 56,388
Less: Ending Inventory 25,000
Cost of Goods Sold 31,388
 Lopez Fiesta Mart
Statement of Financial Performance
December 31, 2021

Sales 45,300
Less: Sales Returns & Allowances 900
Sales Discount 304 1,204
Net Sales 44,096
Less: Cost of Goods Sold 31,388
Gross Profit 12,708
Less: Operating Expenses
Freight Out 200
Salaries Expense 3,000
Advertising Expense 1,000
Rent Expense 3,500
Utilities Expense 400
Supplies Expense 400
Depreciation Expense 150 8,650
Net Income / (Loss) 4,058
 Lopez Fiesta Mart
Statement of Changes in Equity
December 31, 2021

Lopez, Capital, Beginning 0

Add: Initial Investments 39,000
Net Income 4,058
Total 43,058
Less: Lopez, Drawings 2,008
Lopez, Capital, End 41,050
 Lopez Fiesta Mart
Statement of Financial Position
December 21, 2021

ASSETS
Current Assets
Cash 9,400
Accounts Receivable 13,700
Supplies 300
Merchandise Inventory 25,000
Non-Current Assets
Equipment 10,000
Accumulated Depreciation -150
TOTAL ASSETS 58,250

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Accounts Payable 5,200
Non-Current Liabilities
Notes Payable 12,000
TOTAL LIABILITIES

Owner's Equity
Lopez, Capital 41,050
TOTAL LIABILITIES AND OWNER'S EQUITY 58,250
 Lopez Fiesta Mart
Statement of Cash Flow
December 31, 2021

Cash Flow from Operating Activities

Collection from cash customers 16,400
Collection from credit customers 14,896
Refund from purchases 500
Payment of goods bought -50,988
Freight on Purchases -700
Payment of Supplies -700
Refund to customers -900
Payment of Various Expenses -8,100
Net Cash Flow from Operating Activities -29,592

Cash Flow from Investing Activities

Equipment bought -10,000
Sale of equipment 0
Cash flow from Investing Activities -10,000

Cash flow from Financing Activities

Investment of Capital 39,000
Withdrawal for personal use -2,008
Borrowing from Bank 12,000
Net cash Flow from Financing Activities 48,992
INCREASE / (DECREASE) IJN CASH 9,400
 GENERAL JOURNAL - PAGE 03
Date Account Title/Explanation PR Debit Credit
31 Merchandise Inventory 140 25,000
Income Summary 700 25,000
To close ending inventory

31 Sales 410 45,300

Sales Returns & Allowances 420 900
Sales Discounts 430 304
Income Summary 700 44,096
To close sales accounts

31 Income Summary 700 56,388

Purchase Returns & Allowances 520 800
Purchase Discount 530 312
Purchases 510 56,800
Freight In 540 700
To close purchases accounts

31 Income Summary 700 8,650

Freight Out 610 200
Salaries Expense 620 3,000
Advertising Expense 630 1,000
Rent Expense 640 3,500
Utilities Expense 650 400
Supplies Expense 660 400
Depreciation Expense 670 150
To close expense account

31 Income Summary 700 4,058

Lopez, Capital 310 4,058
To close income to capital accounts

31 Lopez, Capital 310 2,008

Lopez, Drawings 320 2,008
 Lopez Fiesta Mart
Post-Closing Trial Balance
December 21, 2021

Code Account Titles Debit Credit

110 Cash 9,400
120 Accounts Receivable 13,700
130 Supplies 300
140 Merchandise Inventory 25,000
150 Equipment 10,000
160 Accumulated Depreciation 150
210 Accounts Payable 5,200
220 Notes Payable 12,000
310 Lopez, Capital 41,050
TOTAL LIABILITIES AND OWNER'S EQUITY 58,400 58,400