VILLAR TRADING

WORKSHEET
Dec. 31, 2021
Unadjusted Trial Adjustments Adjusted Trial Balance Income Statement Balance Sheet
Balance
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash on Hand P 25,000 25,000 25,000
Cash in Bank 175,000 175,000 175,000
Accounts Receivable 110,000 110,000 110,000
Allowance for Bad Debts 8,000 a) 3,000 a) 11,000 11,000
Notes Receivable 80,000 80,000 80,000
Merchandise Inventory, Jan 1 198,000 198,000 198,000
Prepaid Rent 30,000 e) 10,000 e) 20,000 20,000
Supplies Inventory 4,000 4,000 4,000
Furniture & Fixtures 60,000 60,000 60,000
Accumulated Depreciation 10,000 b) 10,000 20,000 20,000
Accounts Payable 16,000 16,000 16,000
Loan Payable 80,000 80,000 80,000
Villar, Capital 100,000 100,000 100,000
Villar, Drawings 16,000 16,000 16,000
Purchases 850,000 850,000 850,000
Freight In 15,000 15,000 15,000
Input Tax 104,000 104,000
Purchase Returns & 19,000 19,000 19,000
Allowances
Purchase Discount 8,000 8,000 8,000
Sales 1,500,000 1,500,000 1,500,000
Output Tax 192,000 192,000
Sales Returns & Allowances 25,000 25,000 25,000
Sales Discount 16,000 16,000 16,000
Freight Out 19,000 19,000 19,000
Salaries & Wages 72,000 f) 6,000 f) 78,000 78,000
Taxes Expense 75,000 75,000 75,000
Utilities Expense 64,000 64,000 64,000
Commission Income 5,000 g) 1,000 g) 4,000 4,000
TOTAL 1,938,000 1,938,000
Bad Debts Expense a.) 3,000 3,000 3,000
Depreciation Expense, Store b) 10,000 10,000 10,000
Furniture and Fixtures
Interest Receivable c) 6,000 6,000 6,000
Interest Income 6,000 6,000 6,000
Interest Expense d) 6,000 6,000 6,000
Interest Payable 6,000 6,000 6,000
Rent Expense e) 10,000 10,000 10,000
Salaries Payable 6,000 6,000 6,000
Unearned Commission g) 1,000 1,000 1,000
VAT Payable h) 88,000 88,000 88,000
Merchandise Inventory, Dec 85,000 85,000
31

234,000 234,000 1,865,000 1,865,000 1,369,000 1,622,000

NET LOSS 253,000 253,000
1,622,000 1,622,000 581,000 581,000

Adjusting Entries:
Date Particulars Debit Credit
2021
Dec 31 Adjusting Entries
1. Bad debts Expense 3,000
Allowance for bad debts 3,000
Required allowance (10% x 110,000) = 11,000
Less: Beginning balance 8,000
3,000
2. Depreciation Expense, Store Furniture and Fixtures 10,000
Accumulated Depreciation, Store Furniture and Fixtures 10,000
Depreciation = Cost – Salvage value
Useful life
= 60,000 – 10,000
5 years
= 10,000

3. Interest receivable / Accrued Interest Income 6,000

Interest Income 6,000
80,000 X 15% X 6/12

4. Interest Expense 6,000

Interest Payable 6,000
To record accrued Interest
80,000 X 18% X 5/12

5. Rent Expense (1/3 X 30,000) 10,000

Prepaid rent 10,000
To take up the expired portion of rent

6. Salaries Expense 6,000

Salaries Payable 6,000
To record unpaid salaries

7. Commission Income 1,000

Unearned Income 1,000
To take the unearned portion of Commission: (200/1000 x 5,000)

8. Output tax 192,000

Input tax 104,0000
Vat Payable 88,000
To take up VAT payable
 9) Merchandise Inventory, Dec 31 85,000
Income Summary 85,000
To set up the ending inventory

VILLAR TRADING

INCOME STATEMENT

For the year ended Dec. 31,2020

Sales 1,500,000
Less: Sales Returns and Allowances 25,000
Sales Discount 16,000
Net Sales 1,459,000
Less Cost of Goods Sold
Merchandise Inventory, Jan 1 198,000
Add: Net Cost of Purchases
Purchases 850,000
Less: Purchase Returns and Allowances 19,000
Purchase Discount 8,000
Net Purchases 815,000
Add: Freight – In 15,000 830,000
Cost of Goods Available for Sale 1,028,000
Less: Merchandise Inventory, Dec. 31 85,000 943,000
Gross profit 516,000
Add: Commission Income 4,000
Total Income 520,000
Less: Operating Expenses
Selling
Freight Out 19,000
Salaries & Wages 52,000
Rent Expense 10,000
Taxes Expense 75,000
Store Utilities Expense 48,000
Depreciation Expense, Store Furniture and Fixtures 10,000 214,000

Administrative
Utilities Expense 16,000
Bad Debts Expense 3,000
Salaries & Wages 26,000 45,000 259,000
OPERATING INCOME 261,000

NON-OPERATING OR OTHER
Interest Income/Receivable 6,000
Less: Interest Expense 6,000
Losses 253,000 253,000

NET INCOME 8,000

VILLAR TRADING

Statement of Owner’s Equity

For the Year Ended December 31, 2021

Villar, Capital – Beginning Add: 100,000
Net Income
8,000
Total
108,000
Less:
Villar, Drawings
16,000
 Villar, Capital - Ending
92,000

VILLAR TRADING

STATEMENT OF FINANCIAL POSITION Dec. 31, 2021

ASSETS
Current Assets
Cash on Hand 25,000
Cash in Bank 175,000
Accounts Receivable 110,000
Less: Allowance for Bad Debts 11,000 99,000
Notes Receivable 80,000
Merchandise Inventory 85,000
Supplies Inventory 4,000
Prepaid Rent 20,000
Total Current Assets 488,000

Store Furniture & Fixtures 60,000

Less: Accumulated Depreciation 20.000 40,000
TOTAL ASSETS 528,000

LIABILITIES AND OWNER’S EQUITY

Current Liabilities
Accounts Payable 16,000
Accrued Salaries Payable 6,000
Unearned Commission 1,000
Interest Payable 6,000
Total Current Liabilities 29,000

Loan Payable 80,000

Total Liabilities 109,000

Owner’s Equity
Villar, Capital
Less: Decrease in Capital

TOTAL LIABILITIES AND OWNER”S EQUITY