Activity 2.1.

A
Merchandising Transactions in Special Journals

INSTRUCTIONS: Read and analyze carefully the following problem and answer as required. Write your answer in a
sheet of paper and submit your final output as a PDF file. Indicate your name and signature in each page of your
output.

COMPREHENSIVE PROBLEM: Simulating the Accounting Cycle of a Sole Proprietorship – Merchandising Business,
using special journals.

The Dec. 31, 2019 post-closing trial balance for the Delta Company follows:
Delta Company
Post-Closing Trial Balance
Dec. 31, 2019
110 Cash in Bank P 240,000
120 Accounts Receivable 210,000
130 Merchandise Inventory 730,000
140 Prepaid Rent 90,000
150 Office Supplies 160,000
160 Office Equipment 1,000,0000
165 Accumulated Depreciation P 250,000
210 Notes Payable (current) 400,000
220 Accounts Payable 130,000
230 Salaries Payable
310 Delta, Capital 1,650,000
320 Delta, Drawing
330 Income Summary
410 Sales
420 Sales Returns and Allowances
430 Sales Discounts
510 Purchases
520 Purchases Returns and Allowances
530 Purchases Discounts
540 Freight In
610 Salaries Expense
620 Rent Expense
630 Office Supplies Expense
640 Depreciation Expense
650 Interest Expense _____________ ______________
P 2,430,000 P 2,430,000
Accounts receivable of P210,000 is related to a sale to Loyal Co. on Dec. 28, 2019. All credit sales are 2/10, n/30.
The accounts payable balance of P130,000 is attributable to a purchase on Dec. 29, 2019 from Sammy Co. All credit
purchases are 3/10, n/30.

During the month of Jan. 2020, the following transactions were completed:
Jan. 2 Sold merchandise on credit to Band Company, P240,000. Invoice no. 316.
3 Purchased merchandise on account from Arana Co., P90,000. Invoice dated Jan. 2.
4 Collected amount due from Dec. 28 sale to Loyal Co. less discounts.
5 Sold merchandise for cash, P430,000
7 Paid amount due to Sanny Co. for the purchase of Dec. 29, 2019 less discounts. Issued check no. 83.
8 Sold merchandise on account to Sugal Co., P310,000. Invoice no. 317.
9 Returned merchandise purchased from Arana Co., P10,000.
10 Collected amount due from Band Company less discounts.
11 Purchased merchandise on account from Viru Co., P120,000. Invoice dated Jan. 10.
11 Paid Arana Co. amount dues less returns and discounts. Issued check no. 84.
12 Purchased merchandise for cash, P70,000. Issued check no. 85.

13 Sold merchandise on account to Ceda Company, P130,000. Invoice no. 318.

14 Paid interest on the notes payable, P10,000. Issued check no. 86.
15 Paid salaries, P80,000. Issued check no. 87.
17 Purchased merchandise on account from Sanny Co., P190,000. Invoice dated Jan. 14.
18 Sold merchandise on account to Loyal Co., P460,000. Invoice no. 319.
19 Delta withdrew P100,000 from the business. Issued check no. 88.
21 Acquired office supplies for cash, P40,000. Issued check no. 89.
 22 Paid freight charges on the merchandise purchased from Sanny Co. on Jan. 17, P20,000. Issued
check no. 90.
22 Collected amount due from Ceda Company less discounts.
23 Sold merchandise on credit to Band Company, P110,000. Invoice no. 320.
24 Received return merchandise from Sugal Co., P30,000.
25 Received amount due from Sugal Co. on the sale of Jan. 8 less returns.
25 Purchased merchandise on account from Braga Co., P340,000. Invoice dated Jan. 24.
26 Paid P90,000 to Sanny Co. in partial payment of account. Issued check no. 91.
27 Received P170,000 loan from the BPI and issued a notes payable.
28 Purchased merchandise on account from Viru Co., P270,000. Invoice dated Jan. 27.
29 Sold merchandise on account Ceda Company, P170,000. Invoice no. 321.
30 Purchased merchandise on account from Arana Co., P360,000. Invoice dated Jan. 29.
31 Sold merchandise for cash, P1,310,000.

REQUIRED: Record the transactions for the month of January using special journals.

CASH RECEIPTS JOURNAL (20 pts) Page 35

Debits Credits
Other Accounts/Sundries
Date O.R. Customer/Pay Cash Sales Accounts Sales Account Title PR Amount
No.
2018 or Discounts Receivable
Jan. 4 Loyal Co. 205, 800 4,200 210, 000
Jan. 5 Delta Company 430, 000 430, 000
Jan. 10 Band Company 235, 200 4, 800 240, 000
Jan. 22 Ceda Company 127, 400 2, 600 130, 000
Jan. 24 Sugal Co. 30, 000 Purchase Returns
and Allowances
30, 000
Jan 25 Sugal Co. 303, 800 6, 200 310,000
Jan. 27 Delta Company 170, 000 Notes Payable 170, 000
Jan. 31 1, 310,000 1, 310,000

CASH DISBURSEMENTS JOURNAL (20 pts) Page 43

Credits Debits
Other Accounts/Sundries
Date Ck. Payee Cash Purchases Accounts Purchases Account Title PR Amount
2018 No. Discounts Payable
Jan 7. 83 Delta Company 126, 100 3, 900 130, 000
Jan 11. 84 Arana Co. 77, 600 2, 400 80, 000
Jan. 12 85 Delta Company 70, 000 70, 000
Jan. 14 86 Arana Co. 10 ,000 Interest Expense
10, 000
Jan. 15 87 Delta Company 80, 000 Salaries Expense 80, 000
Jan. 19 88 Delta Company 100, 000 Delta Company, 100, 000
Withdrawals
Jan. 21 89 Delta Company 40 ,000 Office Supplies 40, 000
Jan. 22 90 Sanny Co. 20, 000 20,000
Jan. 26 91 Sanny Co. 90, 000 90, 000
 SALES JOURNAL (10 pts) Page 16

Invoice Accounts Rec. Sales

Date No. Customers Post. Dr. Cr.
2018 Ref.
Jan. 2 316 Band Company 240, 000 240, 000
Jan. 8 317 Sugal Co. 310, 000 310, 000
Jan. 13 318 Ceda Company 130, 000 130, 000
Jan. 18 319 Loyal Co. 460, 000 460, 000
Jan. 23 320 Band Company 110, 000 110, 000
Jan. 29 321 Ceda Company 170, 000 170, 000

PURCHASES JOURNAL (10 pts) Page 25

R.R. Post. Purchases. Accounts Payable
Date No. Suppliers Ref. Dr. Cr.
Jan. 3 Arana Co. 90, 000 90, 000
Jan. 11 Viru Co. 120, 000 120, 000
Jan. 17 Sanny Co. 190, 000 190, 000
Jan. 25 Braga Co. 340, 000 340, 000
Jan. 28 Viru Co. 270, 000 270, 000
Jan. 30 Arana Co. 360, 000 360, 000

GENERAL JOURNAL (5 pts) Page 13

Date/ 2015 Account Titles P.R. Debit Credit
Jan. 9 Accounts Payable Arana Co. 10, 000
Purchase Returns & Allowances 10, 000

God bless Future CPAs! 

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