Quarter4 Accounting1 Week6
Quarter4 Accounting1 Week6
Quarter4 Accounting1 Week6
specialized-ACAD-ABM
G11
Regional Office No. VIII - Eastern Visayas
Department of Education
Schools Division Office of Biliran
Larrazabal, Naval, Biliran
SENIOR HIGH SCHOOL
Fundamentals
of ABM 1
(Q3-Week
4 6)
1)
LE
SA
Name: __________________________
OR
TF
Date: ___________________________
LESSON 1: Prepares a trial balance
__________________1. Detailed records of the cost of each item are maintained, and the
cost of each item sold is determined from records when the sale occurs.
__________________2. Cost of goods sold is determined only at the end of an accounting
period.
__________________3. Reported when earned in accordance with the revenue recognition
principle, and in a merchandising company, revenues are earned when the goods are
transferred from seller to buyer.
__________________4. Credited only for sales of goods held for resale. Sales of assets not
held for resale (such as equipment, buildings, land, etc.) are credited directly to the asset
account.
Once all transactions for the year The unadjusted trial balance
have been posted to their respective ledgers generated, however, does not contain all the correct
accounts, its totality is checked by using what we information as adjusting entries, which are generally
call an unadjusted trial balance. A trial balance is a made at the end of the year, have not been
listing of general ledger accounts together with their incorporated. We first journalize adjusting entry
respective debit and credit balances. Thus it items such as prepayments, accruals, and deferrals.
provides evidence that the total debits = total These adjustments are then inputted into the
credits. If these two are not equal, errors have worksheet to introduce the changes and ultimately
occurred in the recording and/or posting of the arrive at the adjusted trial balance which has
journal entries. updated account values as per the year-end amounts.
Step 4 & 5– Prepare the unadjusted trial balance, and preparation of worksheet. The balances in the
general ledger for each account will be extended to the first two money columns of the worksheet. The
unadjusted trial of Agila is: (refer to week 5 module)
AGILA MERCHANDISING
Worksheet
DEBIT CREDIT
Cash 149,429
Merchandise Inventory 0-
Sales 83,562
Purchases 459,750
Depreciation Expense 0
823,312 823,312
LET’S
ASSESS
Exercise:
Smash It is the leading sports store in the region. It was built and operated by
Matthew, its sole proprietor. At the beginning of the month of November, the general ledger of
Smas It contained the following balances: Cash – 25 000, Inventory – P25 000, A/R – P15 000, and
Matthew, Capital – P65 000. Transactions that occurred are as follows:
November 3 Purchased merchandise inventory on account from Sofia Apparel. Total cost was
P24 500. Terms: FOB Destination, 3/10, net 45. The
purchase is recorded net of discount.
November 05 Goods ordered last November 3 arrived at the Smash It warehouse.
November 08 Full payment to Sofia Apparel was made.
November 14 Sold merchandise to Dan Balls and equipment worth P5 000 were sold for P12 300.
Cash was received upon payment.
November 17 Sold inventory costing P10 000 to See Corporation on account. Mark-up on the
inventory amounted to 75% of the cost of inventory
sold.
November 18 25% of the merchandise sold last November 17 were defective. These were returned.
Credit memo was issued by Smash It.
November 23 Received full payment in settlement of obligation incurred by See Corporation last
November 17.
Requirement:
1. Journalize the transactions in the general journal. Use perpetual inventory system.
Inventory 2,500
Cost of Goods Sold 2,500
23 Cash 13,125
Account Receivable 13,125
Exercise:
Keith Ltd. is the leading sports store in the region. It was built and operated by
Aaron, its sole proprietor. At the beginning of the month of November, the general ledger of Keith
Ltd. contained the following balances: Cash – 15 000, Inventory – P15 000, A/R – P10 000, and
Aaron, Capital – P55 000 (40,000). Transactions that occurred are as follows:
November 3 Purchased merchandise inventory on account from Sofia Apparel. Total cost was
P27 500. Terms: FOB Destination, 3/10, net 45. The
purchase is recorded net of discount.
November 05 Goods ordered last November 3 arrived at the Keith Ltd. warehouse.
November 08 Full payment to Sofia Apparel was made.
November 14 Sold merchandise to Ike Balls and equipment worth P7 000 were sold for P15 300.
Cash was received upon payment.
November 17 Sold inventory costing P12 000 to Ara Corporation on account. Mark-up on the
inventory amounted to 75% of the cost of inventory
sold.
November 18 25% of the merchandise sold last November 17 were defective. These were returned.
Credit memo was issued by Keith Ltd.
November 23 Received full payment in settlement of obligation incurred by Ara Corporation last
November 17.
Requirement:
1. Journalize the transactions in the general journal. Use perpetual inventory system.
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