MERCHANDISING PROBLEM

PERPETUAL INVENTORY

The following transactions were selected from among those completed by the Bowman
Company during September of the current year.

Sep. 1 - Mr. Bowman invested cash Php 15,000 for his business.
3 - Purchased merchandise on account from Axel Co., list price Php 10,000, trade
discount 15% terms FOB destination, 1/10, n/30.
4 - Purchased office supplies for cash, Php 800.
6 - Sold merchandise on account to Hart Co., list price Php 10,000, trade discount 20%,
terms 2/10, n/30. The cost of merchandise sold was Php 3,000.
7 - Returned Php 2,000 of the merchandise purchased on September 3 from Axel Co.
10 - Purchased merchandise for cash Php 5,000.
10 - Bought equipment on cash Php 3,000.
11 - Bought equipment Php 2,000 on credit.
12 - Sold merchandise on nonbank credit cards and reported accounts to the card
Company,Php 5,500. The cost of merchandise sold was Php 3,200.
13 - Paid Axel Co. on account from sale of September 3, less return of September 7
and discount.
15 - Borrowed money from RCBC signed promissory note for Php 5,000.
16 - Received cash on account from sale of September 6 to Hart Co., less discount.
20 - Received cash from card company for nonbank credit sales of September 12, less
Php 300 service fee.
24 - Sold merchandose to Wilcox Co., Php 3,000, terms 1/10, n/30. The cost of
merchandise was Php 1,750.
26 - Sold merchandise for cash, Php 2,200. The cost of merchandise sold was Php 1,400.
28 - Bowman got cash from the business, Php 2,000.
30 - Received merchandise returned bt Wilcox Co., from sale on September 24,
Php 1,000. The cost of the merchandise returned was Php 600.
30 - Sold merchandise for cash Php 3,000. The cost of goods sold was Php 1,200.
30 - Paid salaries Php 2,000.
30- Paid rent Php 1,000.

REQUIRED:
1. Journal Entries
2. Ledger
3. Trial Balance
4. Statement of Financial Performance
5. Statement of Changes in Owners Equity
6. Statement of Financial Position
7. Statement of Cash flows
8. Closing Entries
9. Post-Closing Trial Balance
 Page 1
Date Account Title and Explanations P.R. Debit Credit
September 1 Cash 110 15,000
Bowman Capital 310 15,000

3 Merchandise Inventory 130 8,500

Accounts Payable 210 8,500

4 Office Supplies 140 800

Cash 110 800

6 Accounts Receivable 120 4,000

Sales 410 4,000

Cost of Goods Sold 510 3,000

Merchandise Inventory 130 3,000

7 Accounts Payable 210 2,000

Merchandise Inventory 130 2,000

10 Merchandise Inventory 130 5,000

Cash 110 5,000

10 Equipment 150 3,000

Cash 110 3,000

11 Equipment 150 2,000

Account Payable 210 2,000

12 Accounts Receivable 120 5,500

Sales 410 5,500

Cost of Goods Sold 510 3,200

 Merchandise Inventory 130 3,200

Page 2
Date Account Title and Explanations P.R. Debit Credit
September 13 Accounts Payable 210 6,500
Cash 110 6,435
Merchandise Inventory 130 65

15 Cash 110 5,000

Notes Payable 220 5,000

16 Cash 110 3,920

Sales Discount 415 80
Accounts Receivable 120 4,000

20 Cash 110 5,200

Credit Card Expense 610 300
Accounts Receivable 120 5,500

24 Accounts Receivable 120 3,000

Sales 410 3,000

Cost of Goods Sold 510 1,750

Merchandise Inventory 130 1,750

26 Cash 110 2,200

Sales 410 2,200

Cost of Goods Sold 510 1,400

Merchandise Inventory 130 1,400

28 Bowman, Drawings 320 2,000

Cash 110 2,000

30 Sales Returns and Allowances 412 1,000

Accounts Receivable 120 1,000
 Merchandise Inventory 130 600
Cost of Goods Sold 510 600

Page 3
Date Account Title and Explanations P.R. Debit Credit
September 30 Cash 110 3,000
Sales 410 3,000

Cost of Goods Sold 510 1,200

Merchandise Inventory 130 1,200

30 Salaries Expense 620 2,000

Cash 110 2,000

30 Rent Expense 630 1,000

Cash 110 1,000
NOTE:
PESOS SIGN AT THE FIRST AMOUNT OF DEBIT and CREDIT FOR EACH PAGE
DON’T FORGET TO INDICATE THE POST REFERENCE (ACCOUNT NO. OF EACH ACCOUNT)
 3

Cash
110 Balances
Date Explanations Post Debit Credit Debit Credit
September 1 GJ-1 15,000 15,000
4 GJ-1 800 14,200
10 GJ-1 5,000 9,200
10 GJ-1 3,000 6,200
13 GJ-2 6,435 (235)
15 GJ-2 5,000 4,765
16 GJ-2 3,920 8,685
20 GJ-2 5,200 13,885
26 GJ-2 2,200 16,085
28 GJ-2 2,000 14,085
30 GJ-3 3,000 17,085
30 GJ-3 2,000 15,085
30 GJ-3 1,000 14,085

Accounts Receivable
120 Balances
Date Items Post Debit Credit Debit Credit
September 6 GJ-1 4,000 4,000
12 GJ-1 5,500 9,500
16 GJ-2 4,000 5,500
20 GJ-2 5,500 0
24 GJ-2 3,000 3,000
30 GJ-2 1,000 2,000

Merchandise Inventory
130 Balances
Date Items Post Debit Credit Debit Credit
September 3 GJ-1 8,500 8,500
6 GJ-1 3,000 5,500
7 GJ-1 2,000 3,500
10 GJ-1 5,000 8,500
12 GJ-1 3,200 5,300
13 GJ-2 65 5,235
24 GJ-2 1,750 3,485
26 GJ-2 1,400 2,085
 30 GJ-2 600 2,685
30 GJ-3 1,200 1,485

Office Supplies
140 Balances
Date Items Post Debit Credit Debit Credit
September 4 GJ-1 800 800

Equipment
150 Balances
Date Items Post Debit Credit Debit Credit
September 10 GJ-1 3,000 3,000
10 GJ-1 2,000 5,000

Accounts Payable
210 Balances
Date Items Post Debit Credit Debit Credit
September 3 GJ-1 8,500 8,500
7 GJ-1 2,000 6,500
10 GJ-1 2,000 8,500
13 GJ-2 6,500 2,000

Notes Payable
220 Balances
Date Items Post Debit Credit Debit Credit
September 15 GJ-2 5,000 5,000

Bowman, Capital
320 Balances
Date Items Post Debit Credit Debit Credit
September 1 GJ-1 15,000 15,000
 30 closing GJ-4 3,370 18,370
30 closing GJ-4 2,000 16,370

Bowman, Drawings
320 Balances
Date Items Post Debit Credit Debit Credit
September 28 GJ-2 2,000 2,000
30 closing GJ-4 2,000 0

Sales
410 Balances
Date Items Post Debit Credit Debit Credit
September 6 GJ-1 4,000 4,000
12 GJ-1 5,500 9,500
24 GJ-2 3,000 12,500
26 GJ-2 2,200 14,700
30 GJ-3 3,000 17,700
30 closing GJ-4 17,700 0

Sales Returns and Allowances

412 Balances
Date Items Post Debit Credit Debit Credit
September 30 GJ-2 1,000 1,000
30 closing GJ-4 1,000 0

Sales Discount
415 Balances
Date Items Post Debit Credit Debit Credit
September 16 GJ-2 80 80
30 closing GJ-4 80 0

Cost of Goods Sold

510 Balances
Date Items Post Debit Credit Debit Credit
September 6 GJ-1 3,000 3,000
12 GJ-1 3,200 6,200
24 GJ-2 1,750 7,950
26 GJ-2 1,400 9,350
30 GJ-2 600 8,750
30 GJ-3 1,200 9,950
30 closing GJ-4 9,950 0

Credit Card Expense

610 Balances
Date Items Post Debit Credit Debit Credit
September 20 GJ-2 300 300
30 closing GJ-4 300 0

Salaries Expense
620 Balances
Date Items Post Debit Credit Debit Credit
September 30 GJ-3 2,000 2,000
30 closing GJ-4 2,000 0

Rent Expense
630 Balances
Date Items Post Debit Credit Debit Credit
September 30 GJ-3 1,000 1,000
30 closing GJ-4 1,000 0

Income Summary
710 Balances
Date Items Post Debit Credit Debit Credit
30 closing GJ-4 16,620 16,620
30 closing GJ-4 13,250 3,370
30 closing GJ-4 3,370 0
NOTE:
NO PESOS SIGN
NO DOUBLE RULE
DON’T FORGET TO POST THE CLOSING ENTRIES
 Trial Balance

Account No. Account Title Debit Credit

Cash
Accounts Receivable
Merchandise Inventory
Office Supplies
Equipment
Date
Bowman, Capital
Sales
Sales Returns and Allowances
Sales Discount
Cost of Goods Sold

Credit Card Expense

Salaries Expense
Rent Expense
Income Summary
TOTAL

Bowman Company
Trial Balance
September 30, 2018

Account No. Account Title Debit Credit

110 Cash Php 14,085
120 Accounts Receivable 2,000
130 Merchandise Inventory 1,485
140 Office Supplies 800
150 Equipment 5,000
210 Accounts Payable Php 2,000
220 Notes Payable 5,000
310 Bowman, Capital 15,000
320 Bowman, Drawings 2,000
410 Sales 17,700
412 Sales Returns and Allowances 1,000
415 Sales Discount 80
510 Cost of Goods Sold 9,950
610 Credit Card Expense 300
620 Salaries Expense 2,000
630 Rent Expense 1,000
Total Php 39,700 Php 39,700
 Bowman Company
Statement of Financial Performance
For the Month Ended September 30, 2018

Sales 17,700
Less: Sales Returns and Allowances 1,000
Sales Discounts 80 1,080
Net Sales 16,620
Cost of Goods Sold 9,950
Gross Profit 6,670
Operating Expenses
Credit Card Expense 300
Salaries Expenses 2,000
Rent Expenses 1,000
Total Operating Expenses 3,300
Net Profit 3,370

Bowman Company
Statement of Financial Performance
For the Month Ended September 30, 2018

Bowman, Capital September 30, 2018

Add: Initial Investment 15,000
Less: Bowman, Drawings 2,000
Total 13,000
Add: Net Profit 3,370
Bowman, Capital , September 30, 2018 16,370

Bowman Company
Statement of Financial Position
As of September 30, 2018

Assets

Current Assets
Cash 14,085
Accounts Receivable 2,000
Merchandise Inventory 1,485
Office Supplies 800
Total Current Assets 18,370
Noncurrent Assets
Equipment 5,000
Total Assets 23,370

Liabilities and Owners Equity

Current Liabilities
Accounts Payable 2,000
Note Payable 5,000
Total liabilties 7,000

Bowman, Capital , September 30, 2018 16,370

Total Liablities And Owners Equity 23,370

Bowman Company
Statement of Cash Flows
For the Month Ended September 30, 2018

Cash flows from operating activities

Sale 5,200
Receivables from Customers 9,120
Payments for:
Purchase of merchandise (5,000)
Payment to creditors (6,435)
Purchase of office supplies (800)
Payment for operating expense (3,000)
Total Cash flows from operating Activities (915)

Cash flows from investing activities

Purchase of equipment (3,000)

Cash flows from financing activities

Investment by the owner 15,000

Cash borrowed from bank 5,000
Withdrawals of Owner (2,000)
Total Cash flows from financing activities 18,000

net increase in cash 14,085

Cash balance, September 1, 2018 0
Cash balance, September 30, 2018 14,085
REQUIRED STATEMENTS FOR PERPETUAL INVENTORY
1. Statement of Cost of Good Sold
2. Statement of Financial Performance
3. Statement of Changes in Owners Equity
4. Statement of Financial Position
5. Statement of Cash flows

Padi: Palagay nlng ng peso sign

 Page 4
Date Account Title and Explanations P.R. Debit Credit
December 31 Sales 410 17,700
Income Summary 710 16,620
Sales Return and Allowances 412 1,000
Sales Discount 415 80
To close sale account

Income Summary 710 13,250

Cost of Goods Sold 510 9,950
Credit Card Expense 610 300
Salaries Expense 620 2,000
Rent Expense 630 1,000
To close expense account

Income Summary 710 3,370

Bowman, Capital 310 3,370
To close clearing account

Bowman, Capital 310 2,000

Bowman, Drawings 320 2,000
To close Drawing account
NOTE: FOR PERIODIC, ACCOUNT TO BE CLOSED
1. Sales Account
2. Purchases Account (with inventory end account)
3. Expenses Accounts
4. Clearing account (To Transfer income to Capital)
5. Drawings Accounts
 Bowman Company
Post-Closing Trial Balance
September 30, 2018

Account No. Account Title Debit Credit

110 Cash 14,085
120 Accounts Receivable 2,000
130 Merchandise Inventory 1,485
140 Office Supplies 800
150 Equipment 5,000
210 Accounts Payable 2,000
220 Notes Payable 5,000
310 Bowman, Capital 16,370
Total 23,370 23,370