Accountancy II Ni Lorie
Accountancy II Ni Lorie
Accountancy II Ni Lorie
The Statement of Financial Position 30-4-10 a satement financial that gives the
financial condition of a business as of a given date. The SFP is another name
for the balance sheet. It is composed of three elements assets, liabilities, and
capital.
ASSETS
Are the things owned by the business.
Are properties or rights on properties owned by the business. They are
items of value that belong to the business. In general, common
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examples of assets are cash, tools, equipment, building, and land.
LIABILITIES CASH
Are the debts by owed by the business to persons other than the
owner.
A liability is a debt of the entity resulting from a previous transaction
such as loan, a purchase from a supplier, or an agreement to assume
the debt of another party.
CAPITAL
Refers to the investment or equity of the owner in the business.
Aside from assets and liabilities, capital is also reflected in the SFP.
PURCHASING
Initially, a proprietor invests capital in the formACTIVITY
COLLECTIO of funds, merchandise,
N ACTIVITY
equipment, orany other property to operate his or her business.
CURRENT LIABILITIES
Are debts or obligations normally expected to be settled in the normal
course of the company's operating cycle or within one year by using
current assets or creating other current liabilities.
NONCURRENT LIABILITIES
Are long term debts which will be settled beyond one year.
REVENUE
Current Liabilities ACTIVITY Noncurrent Liabilities
Accounts Payable Notes Payable (due more than one
year)
Loans Payable Mortgage Payable
Utilities Payable Bond Payable
Interests Payabe
Table 1.2 Examples of Current and Noncurrent Liabilities
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PREPARATION OF THE STATEMENT OF FINANCIAL POSITION
OF A SINGLE PROPRIETORSHIP
A. The SPF must have a heading comprising the name of business, title of the
report, and date covered by the report.
B. Its left margin is usually subdivided into two: extreme margin for major
subheadings (e.g., current assets; plant, property, and equipment; other
noncurrent assets; current liabilities, noncurrent liabilities; and owners equity)
and inner margin for specific account titles.
C. At the right margin, the extreme money column is also for major
subheadings while the inner margin is for specific accounts.
D. A double rule is placed under "total assets" and "total liabilities" and
"owners equity". As expressed in the accounting equation, assets must equal
liabilities and owners equity.
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12. UTILITIES PAYABLE - These refer to amounts due to provides of
water, electricity, telephone, and other basic services.
13. MORTGAGE PAYABLE - This pertains to debt secured from a
financial institution by mortgage or lien on real state of the business or
its proprietor.
14. OWNERS DRAWING - This covers the withdrawal of cash or any
form of assets from the business.
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ELEMENTS OF FINANCIAL STATEMENTS
The following are the elements of financial statements:
1. Assets;
2. Liabilities;
3. Equity (also called Capital, Net Assets, or Net Worth);
4. Income; and
5. Expenses
The Normal Operating Cycle of an entity is the time between the acquisition
of assets for processing and their realization in cash.
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neighborhood sari-sari store, department stores, grocery shops, and
those selling in whole sale.
Analyzing Business Transactions
The first step in accounting cycle of a Merchandising business involves
that analysis of business transactions. This is done to determine wether
the economic events will affect the book of an entity.
Journalizing Transactions
Transactions having effects on the company's books journal entries,
since a merchandising business involves regular and reccuring
inventory transactions, when begin studying the different events
involving the said accounts.
Inventory Reporting
Companies can either use (1) perpetual or (2) periodic system in
reporting their inventories. Perpetual Inventory Systems keep track all
changes in the inventory account. This is more expensive as more costs
are incurred to make sure that amounts regarding inventory are
available at every point of sale.
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2. Paid 500 for the delivery Cash 500 Freight-In 500
fee of the purchased Inventory 500 Cash 500
merchandise.
3. Returned defective Cash 2,000 Cash 2,000
inventory received worth Inventory 2,000 Purchase
2,000; Cash is received Return 2,000
upon return of the
merchandise.
4. Sold 4,000 worth of A/R 8,000 A/R 8,000
merchandise; The selling Sales 8,000 Sales 8,000
price of the said
merchandise is 8,000; Cost of good
sales are made on sold 4,000
account. Inventory 4,000
5. Sales worth 2,500 were Sales Returns 2,500 Sales Returns 2,500
returned by customer A/R 2,500 A/R 2,500
as wrong products have
been delivered. Inventory 1,250
Cost of good
sold 1,250
6. The remaining balance Cash 5,500 Cash 5,500
of the receivable related A/R 5,500 A/R 5,500
to the sale was collected.
7. Year-end inventory No entry. Year-end Inventory 5,750
count shows that 5,250 amounting to 5,750 can be Cost of good sold 2,750
worth of inventory is still computed from the Purchase return 2,000
within company premises movements on the
inventory account title. Purchases 10,000
Freight-In 500
*COGS is determined by
BEG inventory + Net
Purchases - Inventory
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Inventory physical count is made Inventory physical count is made at
at least one a year least one a year
Inventory physical count is made at
year-end to establish ending
inventory amounts
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13 Cash 101 P14 896
Sales Discount 403 P304
Accounts Receivable 102 P15 200
to record receipts of cash from
an account
14 Purchases 501 P14 400
Cash 101 P14 400
to record purchases on cash basis
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customer
30 Accounts Receivable 102 P13 700
Sales 401 P13 700
to record sales on account, N/30
Ledgers
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101 Cash Balance
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Date Explanation JR Debit Credit Debit Credit
4 GJ-1 15 200 15 200
13 GJ-1 15 200 -
30 GJ-3 13 700 13 700
12
Date Explanation JR Debit Credit Debit Credit
3 GJ-1 700 700
13
104 Equipment Balance
14
Date Explanation JR Debit Credit Debit Credit
2 GJ-1 10 000 10 000
15
105 Merchandise Inventory Balance
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Date Expalanatio JR Debit Credit Debit Credit
n
13 GJ-1 304 304
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Date Explanation JR Debit Credit Debit Credit
2 GJ-1 15 900 15 900
4 GJ-2 14 400 30 300
18 GJ-2 14 200 44 500
26 GJ-3 12 300 56 800
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Date Explanation JR Debit Credit Debit Credit
6 GJ-1 300 300
17 GJ-2 500 500
19
Date Explanation JR Debit Credit Debit Credit
11 GJ-1 312 312
20
Date Explanation JR Debit Credit Debit Credit
20 GJ-1 700 700
21
Date Explanatio JR Debit Credit Debit Credit
n
15 GJ-1 1 500 1 500
30 GJ-1 1 500 3 000
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Date Explanation JR Debit Credit Debit Credit
2 15 900 15 900
6 300 15 600
11 15 600 -
18 14 200 14 200
27 9 000 5 200
23
Date Explanation JR Debit Credit Debit Credit
16 GJ-2 12 000 12 000
24
Date Explanatio JR Debit Credit Debit Credit
n
1 GJ-2 39 000 39 000
39 000
39 000
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Date Explanation JR Debit Credit Debit Credit
28 GJ-3 2 008 2 008
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Date Explanatio JR Debit Credit Debit Credit
n
4 GJ-1 15 200 15 200
23 GJ-3 16 400 31 600
30 GJ-3 13 700 45 300
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Date Explanation JR Debit Credit Debit Credit
29 GJ-3 900 900
28
Date Explanation JR Debit Credit Debit Credit
30 GJ-3 3 500 3 500
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Date Explanation JR Debit Credit Debit Credit
30 GJ-3 400 400
30
Date Explanation JR Debit Credit Debit Credit
30 GJ-1 1 000 1 000
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Date Explanation JR Debit Credit Debit Credit
5 GJ-1 200 200
Trial Balance
Dole Distributors
Trial Balance
30-4-10
Account Account Titles Debit Credit
No.
101 Cash 9 400
102 Accounts Receivables 13 700
103 Supplies 700
104 Merchandise Inventory
105 Equipment 10 000
201 Accounts Payable 5 200
202 Notes Payable 12 000
301 Lopez, Capital 39 000
302 Lopez, Drawings 2 008
401 Sales 45 300
402 Sales returns and Allowances 900
403 Sales Discount 304
501 Purchases 56 800
502 Purchase returns and Allowances 800
503 Purchase Discount 312
504 Freight In 700
601 Salaries Expense 3 000
602 Rent Expense 3 500
603 Utilities Expense 400
604 Advertising Expense 1 000
605 Freight out 200
Balance 102 612 102 612
Dole Distributors
Cost of Goods Sold
30-4-10
Beginning Inventory -
Add: Purchases 56 800
Less: Purchase return and Allowances 800
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Purchase Discount 312 1 112
Net cost of Purchases 55 688
Add: Freight In 700
Less: Ending Inventory 25 000
Goods available for resale 31 388
Dole Distributors
Statement of Financial Performance
30-4-10
Gross sales 45 300
Less: Sales returns and Allowances 900
Sales Discount 304 1 204
Net Sales 44 096
Less: Cost of goods sold 31 388
Gross Profit 12 708
Less: Expenses
Salaries 3 000
Rent 3 500
Utilities 400
Advertising 1 000
Freight out 200 8 100
Net Profit 4 608
Dole Distributors
Of Changes in Equity
30-4-10
Lopez Capital 4/1/10 39 000
Add: Add'l Investment 0
Net Profit 4 608
Total 43 608
Less: Withdrawal 2 008
Lopez Capital 4/30/10 41 600
Financial Position
30-4-10
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Asset
Current Asset
Cash and Cash Equivalent 9 400
Trades and other Receivable 13 700
Supplies 700
Inventories 25 500
Total Current Asset 48 000
Dole Distributors
Cash Flow
30-4-10
Cash Flow from Operaring Activities
Cash Receipt sale of goods 14 896
Cash receipt from refund 500
Cash receipt from sale 16 400 31 796
Purchase of supplies -700
Payment of Freight -200
Payment of Purchases -15 288
Purchases of goods -14 400
Payment of salaries -15 000
Payment of Freight -700
Payment of purchases -12 300
Payment of Purchases -9 000
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Payment of refund -900
Payment of various expense -6 400 61 388
Dole Distributors
Post Costing Trial Balance
30-4-10
Account Account Titles Debit Credit
No.
101 Cash 9 400
102 Accounts Receivables 13 700
103 Supplies 700
104 Merchandise Inventory 25 000
105 Equipment 10 000
201 Accounts Payable 5 200
202 Notes Payable 12 000
301 Lopez, Capital 41 600
Balance 58 000 58 000
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