DATA College

Capitol Blvd. Sto. Nino, City of San Fernando, Pampanga

PRACTICE SET
IN
INTRODUCTORY ACCOUNTING

Yhack Avud Delivery

(A Sole Proprietorship)
Batch ’09 Edition

Rommel Bundalian
John Murphy David
Angelica Dayrit
Ma. Cristina de Jesus
William Eligio
Winnie Mallari
Lea Maniti
Jerome Morales
Jesus Nacu
Jennilou Viray

Authors
Philippine Copyright 2009 by Rommel Bundalian, et. Al

All rights reserved. No part of this practice set may be reproduced, stored in retrieval
system or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without the prior permission of the publisher and
author.
Any copy that does not bear the signature of the author will be considered as having
come from an unauthorized source.

__________________
All Rights Reserved
 PREFACE

Yhack Avud Delivery – Batch ‘09 Edition is an activity book designed to give students
the understanding of the interrelationship of manual accounting system. The
circumstances, transactions and supporting documents are made to be as close as possible
to the real world. Its purpose is to open the eyes of the students in the general accounting
procedures and principles relevant in a merchandising firm.

To allow the students in appreciating the documents like invoices, receipts, checks, books
of accounts and forms for monthly reporting requirements – they are illustrated.

This practice set is a result of our perseverance. We clasped our hands to be able to come
up with a book that is not only for the purpose of completing the course but also to aid
students taking up basic accounting subject in appreciating various activities and phases
of the accounting cycle.

Enjoy completing this practice set and God Bless!

Rommel Bundalian
John Murphy David
Angelica Dayrit
Ma. Cristina de Jesus
William Eligio
Winnie Mallari
Lea Maniti
Jerome Morales
Jesus Nacu
Jennilou Viray

October 10, 2008

To the Accounting Students:

The book consists of the following:

I. Introduction to Yhack Avud Delivery

II. General Instructions

III. Definition of Terms

IV. Accounting Policies and Practice

V. Chart of Accounts

VI. Post-Closing Trial Balanace

VII. File of Customers

VIII. Transactions with Specific Instructions

IX. Data for Adjustments

I. Introduction to Yhack Avud Delivery

The Yhack Avud Delivery is owned and operated by Yhackie Avuda. He is

extremely conscious with his and his family’s health. This started when his wife Comah
Thocia Avuda experienced and miraculously survived a heart attack. From then on, he’s
been searching for food that is healthy and good for the body. He patronized eating and
drinking fruits and vegetables.

Then a college friend introduced to him a newly developed drink that is rich in
lycopene, fiber and vitamin C. His family tried the juice and they eventually liked it.
After few months of drinking the product, he told his friends and colleagues about the
goodness of it. When he retired from work he decided to open a merchandising business
that will deliver the fruit drink in Pampanga. For four short years of being in the market,
it has become the favorite beverage of health conscious individuals. Since his business
started and until now, he is the sole provider of To Pine-Ade fruit drink in Pampanga.

To Pine-Ade is the only product that he delivers where he bought it directly from
its manufacturer, Manor Garden Manufacturing.

The right product for the right target market at the right place and right price all
contributed to the success of the business and has manifested by a growing number of
loyal customers.
II. General Instructions

1. Use periodic Inventory System.

2. Use the straight-line-method of depreciation.
3. Selling price per box is P600 for 500ml and P500 for 1L.
4. All purchase discounts are valid of terms 2/10, n/30 for regular customers on
account.
5. Use asset method in recording acquisition of supplies and rent.
6. All payments are made through checks.
7. Complete the accounting cycle as follows:
a. Opening of balances from Post-Closing Trial Balance to General Ledgers
b. Journalization
c. Posting
d. Preparation of worksheet
e. Preparation of Financial Statement
f. Post-closing Trial Balance
III. Definition of Terms

Special Journals

SPECIAL JOURNAL contains records of original entry other than the general journal
that are designed for recording specific types of transactions of similar nature, e.g.
Sales Journal, Purchase Journal, Cash Receipts Journal, Cash Disbursements Journal,
and Payroll Journal.

SALES JOURNAL is a record containing a chronological listing of all credit sales.

PURCHASES JOURNAL is a record containing a chronological listing of all purchases

made on account.

CASH RECEIPT JOURNAL is a chronological recording of all cash received.

CASH DISBURSEMENT JOURNAL is a chronological recording of all cash payments.

GENERAL JOURNAL is the most basic of journals. It is a chronological list of

transactions. It has a very specific format for recording each transaction. Each
transaction is recorded separately and consists of: 1.) a date; 2.) any and all accounts
to receive a debit entry are listed first with an amount in the appropriate column, then;
3.) any and all accounts to receive a credit entry are indented and listed next with an
amount in the appropriate column; 4.) a clear description of the transaction. At least
one line is then skipped to visually separate recorded transactions.

Ledgers

LEDGER is a book of accounts in which data from transactions recorded in journals are
posted and thereby classified and summarized. The ledger is typically divided up into
(traditionally physical separate books): a. Purchases/Creditors Ledger is the
subsidiary ledger in which creditors' accounts are recorded; also known as the bought
ledger. Each creditor's account is credited with purchases and debited with cash paid,
discounts received and returns outward. The detail in the creditors ledger is
summarized in the creditors ledger control account kept in the general ledger; b.
Sales/Debtors Ledger is the subsidiary ledger in which debtors' accounts are recorded;
also known as the sold ledger. Each debtor's account is debited with sales and
credited with cash received, discounts allowed and returns inward. The detail in the
debtors ledger is summarized in the debtors ledger control account kept in the general
ledger; c. General/Impersonal Ledger is a book of final entry summarizing all of a
company's financial transactions, through offsetting debit and credit accounts, e.g.
liability, reserve, capital, income and expense accounts; and d. Private Ledger is
 confidential and records items such as capital, loans, mortgages, directors' salaries
and awards, etc.

SUBSIDIARY LEDGER is a group of subsidiary accounts the sum of the balances of

which is equal to the balance of the related control account in the general ledger.

Other Source Documents

SALES INVOICE is a document that records the sale of goods or services from a vendor
to a customer.

CHECK is a draft drawn against a bank, payable upon demand to the person/entity
named upon the draft. CHECK REGISTER is the journal for recording payments by
check.

VOUCHER is a. a piece of substantiating evidence; a proof; or, b. a written record of

expenditure, disbursement, or completed transaction; or, c. a written authorization or
certificate, especially one exchangeable for cash or representing a credit against
future expenditures.

OFFICIAL RECEIPT is issue every time the company receives cash.

IV. ACCOUNTING POLICIES and PRACTRICE

Accounting policies are the accounting principles and methods of applying those
principles that are judged by the management of the entity to be the most appropriate in
the circumstances to present fairly financial position, changes in financial position, and
results of operations in accordance with generally accepted accounting principles.

Accounting practice is the manner in which accountants carry out their daily
work. It is the day-to-day implementation of accounting policies. Accounting practice
relates to the practical application of accounting to the financial accumulation and
reporting needs of clients.
V. CHART OF ACCOUNTS

111 Petty Cash

112 Cash in Bank
113 Accounts Receivables
114 Merchandise Inventory
115 Office Supplies
116 Prepaid Rent
121 Office Equipments
131 Accumulated Depreciation - Office Equipments
122 Delivery Equipment
132 Accumulated Depreciation - Delivery Equipments
211 Accounts Payable
212 SSS, Philhealth and HDMF Payables
213 Withholding Taxes Payble
214 Interest Payable
221 Notes Payable
311 Y. Avuda, Capital
312 Y. Avuda, Drawing
321 Income Summary
411 Sales
421 Sales Returns and Allowances
422 Sales Discounts
511 Purchases
521 Purchase Returns and Allowances
522 Purchase Discounts
611 Salaries Expense
612 Office Supplies Expense
613 Gasoline Expenses
614 Rent Expense
615 Utilities Expenses
616 SSS, Philhealth, and HDMF Expenses
617 Miscellaneous Expenses
618 Depreciation Expense - Office Equipments
619 Depreciation Expense - Delivery Equipment
620 Interest Expense
VI. Post-Closing Trial Balance
Yhack Avud Delivery
Post-Closing Trial Balance
December 31,2008
Debit Credit
111 Petty Cash 10,000
112 Cash in Bank 157,760
113 Accounts Receivables 284,800
114 Merchandise Inventory 78,000
115 Office Supplies 3,485
116 Prepaid Rent 100,000
121 Office Equipments 180,000
131 Accumulated Depreciation - Office Equipments 120,000
122 Delivery Equipment 840,000
132 Accumulated Depreciation - Delivery Equipments 336,000
211 Accounts Payable 160,000
212 SSS, Philhealth and HDMF Payables 10,000
213 Withholding Taxes Payble 2,500
214 Interest Payable
221 Notes Payable 400,000
311 Y. Avuda, Capital 625,545
312 Y. Avuda, Drawing
321 Income Summary
411 Sales
421 Sales Returns and Allowances
422 Sales Discounts
511 Purchases
521 Purchase Returns and Allowances
522 Purchase Discounts
611 Salaries Expense
612 Office Supplies Expense
613 Gasoline Expenses
614 Rent Expense
615 Utilities Expenses
616 SSS, Philhealth, and HDMF Expenses
617 Miscellaneous Expenses
618 Depreciation Expense - Office Equipments
619 Depreciation Expense - Delivery Equipment
620 Interest Expense
Total 1,654,045 1,654,045
VII. File of Customers

Name Address Beginning

Balances

Net Pie Convenient Store OG Road, CSFP -

Tita Dey’s Canteen Capitol Blvd. Sto Nino, CSFP 45,800
Wini Mart V. Tiomico St., CSFP -
Wingle Supermarket San Matias, CSFP 31,000
Lee Mart San Jose, CSFP 21,000
Pink Cab Capito Blvd., CSFP 67,000
Jojo’s Restaurant OG Road, CSFP 12,000
24/7 Convenient Store JP Rizal, CSFP 47,000
Razon’s Restaurant Dolores, CSFP 30,000
AA Saver’s Mart San Jose, CSFP 31,000
Dang Beck’z Convenient Store Sto.Domingo, Minalin -
VIII. Transactions and Specific Instructions

During the month of January, 2009, the following transactions were completed:

Jan.2 Sold 35 boxes of 500 ml. and 40 boxes of 1L on credit to Net Pie’s
Convenient store. Accomplish invoice no. 07778. Record the transaction in
the sales journal and post to the customer account in the accounts receivable
subsidiary ledger.

Jan. 3 Purchased 235 boxes of 500 ml and 170 boxes of 1l from Manor Garden
Manufacturing supplier’s invoice no. 012611. Record the transaction on
purchase journal and post to the suppliers account in the accounts payable
subsidiary ledger.

Jan. 3 Received full payment from Pink Cab, P65,660 on sales made last
December 28, 2008, net of discounts under sales invoice no.07775. Refer to
the account receivable subsidiary ledger to verify the amount and validity of
the payment. Issue OR# 08729. Record the entries to the cash receipt journal
and then post to the customers accounts in the accounts receivable
subsidiary ledger.

Jan. 4 Paid amount due to Manor Garden Manufacturing for December 26, 2007
purchases net of discounts. Accomplish voucher no. 03909. Issue check no.
0513030505. Record to the cash payment journal and post to the customer
account in the Accounts Payable subsidiary ledger.

Jan. 5 Cash sales from Howell Torres amounted to P11,000 for the 10 boxes of
500 ml and 10 boxes of 1L. Accomplish invoice no. 07779. Issued official
receipt no. 08730. Record the transactions in the cash receipt journal.

Jan. 6 Return 5 boxes of 500 ml and 3 boxes of 1L to Manor Garden

Manufacturing from January 3, 2009 purchases. Record the transaction to
the general journal.

Jan. 6 Sold 43 boxes of 500 ml and 40 boxes of 1L to Winimart on account.

Jan 7 Received payment from NetPie convenient store less discount. Refer to
sales invoice no 07778.

Jan. 8 Paid 50% on the balance due from Manor Garden Manufacturing less
discounts.

Jan. 9 Sold to Wingle Supermarket, 95 boxes of 500ml and 77 boxes of 1L on

account.

Jan. 10 Collections amounted to 60% of the receivables to Winimart less discount.

Jan. 10 Remitted the following:
SSS, P6000
PhilHealth, P2,000
HDMF, P2,000
BIR, P2,500

Jan. 11 Bought office supplies for cash worth P10,000 on LEI Printing Press of
Guagua, Pampanga.

Jan. 12 Sold 45 boxes of 500ml on account to 24/7 convenient store.

Jan. 13 Sales returns from January 9 purchases of 5 boxes each of 500 ml. and 1 L
amounting to P5,500 from Wingle Supermarket.

Jan 14 Collected from Razon in full. Refer to accounts receivable subsidiary ledger.

Jan 14 Paid salaries P25,500

SSS P1,500
PhilHealth P500
HDMF P500
BIR, P1,250
Total Deduction: P3,750
--------
P21,750

Jan. 16 Paid Patron, which is located at Bacolor, Pampanga, for gasoline expenses
from Jan. 2-15, P5,000.

Jan. 16 Deliver 20 boxes of 500ml and 30 boxes of 1L to Dang Bekz on account.

Jan. 17 Make purchases from Manor Garden. Refer to Manor Garden’s Invoice No.
0012729.

Jan. 18 Made a cash sales to Cong. Rolly Bondoc of Dota City, 70 boxes of 500ml
and 40 boxes of 1L.

Jan. 19 Received full payment from Wingle Supermarket (net of returns and
discounts).

Jan. 20 Issued a check to Mr. Avuda amounting to P30,000 for personal use.

Jan. 21 Paid P50,000 to Manor Garden Manufacturing.

Jan 23 Make purchases from Manor Garden. Refer to Manor Garden’s Invoice No.
0012920.
Jan 23 Received payment in full from Leemart.

Jan 24 Replenished Petty Cash, P3,750.

Office Supplies Expense, P1,250
Misc. Expense, P2,500

Jan. 25 Sold 95 boxes of 500ml and 80 boxes of 1L to AA saver’s mart on account.

Jan. 26 Cash Sales of 50 boxes of 500ml and 30 boxes of 1L to Nakamura Catering

Services of Bulaon, CSFP.

Jan. 27 Received full payment from 24/7 Convenient Store.

Jan. 27 Sold 100 boxes of 500ml and 80 boxes of 1L to Net Pie’s Convenience
Store on account.

Jan. 28 Received full payment from AA saver’s mart less discount.

Jan. 30 Sold 90 boxes of 500ml and 100 boxes of 1L to Pink Cab on account.

Jan. 31 Paid P300,000 to Manor Garden Manufacturing.

Jan. 31 Paid salaries P25,500

SSS P1,500
PhilHealth P500
HDMF P500
BIR, P1,250
Total Deduction: P3,750
--------
P21,750

Jan. 31 Paid the following utilities

SFELAPCO P3,000
San Fernando Water District 1,325
PLDT 1,226

Jan. 31 Paid Patron for gasoline expenses from Jan. 16-31, P5,600.
X. Data for Adjustments

1. Merchandise Inventory End, P133,500.

2. Unused supplies, P6,500.
3. The prepaid rent was paid on November 2, 2008 in the amount of P120,000 to
cover a 1-year period.
4. Monthly depreciation is P2,500 for office equipment and P7,000 for delivery
equipment.
5. The notes payable is due on December 31, 2009. It carries 12% interest payable
every June 30 and December 31.
6. Accrued expenses for SSS, Philhealth and HDMF are as follows:
SSS P3,000
Philhealth 1,000
HDMF 1,000