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    Accounting Cycle of A Merchandising Business

    Uploaded by

    Anne Alag
    This document provides information about Entity A, a merchandising business that uses a perpetual inventory system. It includes Entity A's unadjusted trial balance as of January 1, 20x1 and transactions that occurred during the year, including purchases and sales of inventory, collection and payment of accounts, and payment of salaries. The requirements are to provide journal entries, post to the ledger, prepare an unadjusted trial balance, adjusting entries, worksheet, closing entries, and final financial statements.

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    Accounting Cycle of A Merchandising Business

    Uploaded by

    Anne Alag
    282 views2 pages
    This document provides information about Entity A, a merchandising business that uses a perpetual inventory system. It includes Entity A's unadjusted trial balance as of January 1, 20x1 and transactions that occurred during the year, including purchases and sales of inventory, collection and payment of accounts, and payment of salaries. The requirements are to provide journal entries, post to the ledger, prepare an unadjusted trial balance, adjusting entries, worksheet, closing entries, and final financial statements.

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    Accounting Cycle of a Merchandising Business

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    This document provides information about Entity A, a merchandising business that uses a perpetual inventory system. It includes Entity A's unadjusted trial balance as of January 1, 20x1 and transactions that occurred during the year, including purchases and sales of inventory, collection and payment of accounts, and payment of salaries. The requirements are to provide journal entries, post to the ledger, prepare an unadjusted trial balance, adjusting entries, worksheet, closing entries, and final financial statements.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    282 views2 pages

    Accounting Cycle of A Merchandising Business

    Uploaded by

    Anne Alag
    This document provides information about Entity A, a merchandising business that uses a perpetual inventory system. It includes Entity A's unadjusted trial balance as of January 1, 20x1 and transactions that occurred during the year, including purchases and sales of inventory, collection and payment of accounts, and payment of salaries. The requirements are to provide journal entries, post to the ledger, prepare an unadjusted trial balance, adjusting entries, worksheet, closing entries, and final financial statements.

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    © All Rights Reserved
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    PROBLEM: Accounting Cycle of a Merchandising Business – Perpetual Inventory System ( 100 points )

    Entity A uses the perpetual inventory system. The trial balance of Entity A on January 1, 20x1 is shown
    below:

    Entity A
    Unadjusted Trial Balance
    January 1, 20x1

    Accounts Debit Credit

    Cash 80,000

    Inventory 40,000

    Equipment 200,000

    Accumulated depreciation 20,000

    Owner’s capital 300,000

    Totals 320,000 320,000

    The following were the transactions during the year:

    1. Purchased inventories worth P420,000, on account.

    2. Sold inventories costing P430,000 for P900,000 on account.


    3. Collected P870,000 accounts receivable.

    4. Paid P390,000 accounts payable.

    5. Paid salaries expense of P520,000.

    Additional information for year-end adjustment:

    a. The annual depreciation on the equipment is P20,000.

    Requirements:

    a. Provide the journal entries. (10 pts.)

    b. Post the entries to the ledger. (10 pts.)

    c. Prepare the unadjusted trial balance. (5 pts.)

    d. Provide the adjusting entries. (10 pts.)

    e. Complete the worksheet up to post closing trial balance. ( 35 pts.)

    f. Prepare the closing entries. (10 pts.)

    g. Prepare the balance sheet and income statement. (20 pts.)

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