Chart of Accounts

Assets Income
Current Assets Costs
Distribution 401 Sales
10 Cash 405 Sales Returns and
Liabilities
707 Administrative
Store Supplies Expenses
Expense
1 Allowances
201 Salaries
701
703 Accounts Payable
Expense
11 Freight-Out
Account Receivable 406 Sales Discount
202 Utilities
702
708 Notes Payable
Expense
Depreciation Expense-
2 Owner’s Equity 601 Cost of Good Sold
203 Rent
704 Salaries
Store Payable
Expense
Equipment
11
301 Allowance forCapital
Doubtful
204 Maeye
705 Catoc,
Utilities
Advertising Payable
Expense
3
306 Accounts
709 Maeye
DoubtfulCatoc, Drawings
Accounts
11 Merchandise Inventory
801 Income Summary
5
11 Prepaid Rent
6
11 Store Supplies
7
16 Furniture and Fixture
0
17 Store Equipment
0
17 Accumulated Depreciation-
1 Store Equipment

1
Business Transaction of Maeye Catoc Merchandising
July 2020
July 1, 2020 The business, Maeye Catoc Merchandising was registered as a single
proprietorship with the Department of Trade Industry, Maeye invested
P130, 000.
July 2, 2020 Bought store supplies on cash basis for P1, 000.
July 2, 2020 Bought merchandise on account from Mina Las Merchandising, P26, 400.
Terms:2/10, n/30
July 3, 2020 Bought computer equipment on cash basis for P18,000. Salvage value of
P3, 000 and useful life of five years.
July 5, 2020 Sold merchandise on account P20, 000, FOB destination, terms: 2/10,
n/30. The cost of goods sold was P16, 560.
July 6, 2020 Paid P750 freight out on July 5 sales.
July 6, 2020 Received credits from Mina Las Merchandising for merchandise returned,
P500.
July 10, 2020 Collected from July 5 transactions.
July 12, 2020 Paid Mina Las Merchandising.
July 14, 2020 Bought merchandise on cash basis P15, 700.
July 15, 2020 Paid the following:
Advertising P3, 500 Rent P3, 000
Utilities P900 Salaries P3, 000
July 17, 2020 Borrowed money from China Bank, signed promissory note for P20, 000.
July 17, 2020 Received refund from the supplier on cash purchased last July 14, P700.
July 18, 2020 Bought merchandise from Andy Lim Merchandising, P21, 000, FOB
Shipping point, terms:2/10, n/30
July 19, 2020 Paid freight on July 18 purchases, P850.
July 21, 2020 Bought merchandise for cash, P32, 600.
July 23, 2020 Sold merchandise for P27, 300. The cost of goods sold was P21, 300.
July 24, 2020 Made refunds from cash customers, P1, 300.
July 28, 2020 Paid Andy Lim Merchandising on the July 18 purchase, P10, 000. No
discount for partial payment.
July 29, 2020 Maeye got cash from the business, P8, 000.
July 30, 2020 Sold merchandise on account P56, 400. Terms: 2/n, n/30. The cost of
goods sold was P40, 760.

2
 Preparing the General Journal
GENERAL JOURNAL PAGE 1
DATE ACCOUNT TITLE AND EXPLANATION PR DEBIT CREDIT
2020
July 1 Cash 101 P130, 000
Maeye Catoc, Capital 301 P130, 000
To record initial cash investment by owner.

2 Store Supplies 117 1, 000

Cash 101 1,000
To record purchase of store supplies

2 Merchandise Inventory 115 26, 400

Accounts Payable 201 26, 400
Too record purchase of merchandise on account from Mina Las Merchandising. Term: 2/10,
n/30

3 Store Equipment 170 18, 000

Cash 18, 000
To record purchase of equipment

5 Accounts Receivable 112 20, 000

Sales 401 20, 000
To record sales of merchandise on account. Term: 2/10, n/30

5 Cost of goods sold 601 16, 560

Merchandise Inventory 115 16, 560
To update merchandise inventory

6 Freight out 703 750

Cash 101 750
To record payment of freight out on sold merchandise

6 Accounts Payable 201 500

Merchandise Inventory 115 500
To record returned merchandise to Mina Las Merchandising

10 Cash 101 19, 600

Sales Discount 406 400
Accounts Receivable 112 20, 000
To record collections from customers

12 Accounts Payable 201 25, 900

Cash 101 25, 382
Merchandise Inventory 115 518
To record full payment to Mina Las Merchandising

3
 Preparing the General Journal
GENERAL JOURNAL PAGE 2
DATE ACCOUNT TITLE AND EXPLANATION PR DEBIT CREDIT
2020
14 Merchandise Inventory 115 15, 700
Cash 101 15, 700
To record purchase of merchandise

15 Merchandising Expense 705 3,500

Utilities Expense 702 900
Rent Expense 704 3,000
Salaries Expense 702 3,000
Cash 101 10, 400
To record payment of operating expenses

17 Cash 101 20, 000

Notes Payable 115 20, 000
To record money borrowed from China Bank

17 Cash 101 700

Merchandise Inventory 115 700
To record refund from supplier

18 Merchandise Inventory 115 21,000

Accounts Payable 201 21, 000
To record purchase of merchandise on account from Andy Lim Merchandise. Term: 2/n, n/30

19 Merchandise Inventory 115 850

Cash 101 850
To record payment of freight in

21 Merchandise Inventory 115 32, 600

Cash 101 32, 600
To record purchase of merchandise

23 Cash 101 27, 300

Sales 401 27, 300
To record sale of merchandise
23 Cost of Goods Sold
Merchandise Inventory
To update merchandise inventory

24 Sales Returns and Allowances 405 1,300

Cash 101 1,300
To record refund to customers

4
 Preparing General Journal
GENERAL JOURNAL PAGE 3
DATE ACCOUNT TITLE AND EXPLANATION PR DEBIT CREDIT
2020
24 Merchandise Inventory 115 1,300
Cash of Goods Sold 101 1,300
To record returned merchandise

28 Accounts Payable 201 10,000

Cash 101 10,000
To record partial payment to Andy Lim Merchandising

29 Maeye Catoc, Drawings 306 8,000

Cash 101 8,000
To record Maeye Cato’s withdrawal of cash

30 Accounts Receivable 122 56,400

sales 401 56,400
To record sales of merchandise on account. Term 2/10, n/30

30 Cost of Goods Sold 601

Merchandise Inventory 115
To update merchandise inventory

5
 Posting Entries
GENERAL JOURNAL
Account Title: CASH Account No: 101
DATE ITEMS PR DEBIT CREDIT BALANCE
2020 DEBIT CREDIT
July 1 Initial Investment GJ1 130,000 130,000
2 Purchase-supplies GJ1 1,000 129,000
3 Purchase-equipment GJ1 18,000 111,000
6 Payment-freight GJ1 750 110,250
10 Collection from customers GJ1 19,600 129,850
12 Payment to Mina Las GJ1 25,382 104,468
14 Purchase of merchandise GJ2 15,700 88,768
15 Payment-expenses GJ2 10,400 78,368
17 Loan-China Bank GJ2 20,000 98,368
17 Refund from supplier GJ2 700 99,068
19 Payment of freight GJ2 850 98,218
21 Purchase of merchandise GJ2 32,600 65,618
23 Sale of merchandise GJ2 27,300 92,918
24 Refund to customers GJ2 1,300 91,618
28 Partial payment- Andy Lim GJ3 10,000 81,618
29 Cash withdrawal GJ3 8,000 73,618
31 Balance 73,618

Account Title: ACCOUNTS RECEIVABLE Account No: 112

DATE ITEMS PR DEBIT CREDIT BALANCE
2020 DEBIT CREDIT
July 2 Sale-merchandise GJ1 20,000 20,000
10 Payment of Customer GJ1 20,000 -0-
30 Sale-merchandise GJ3 56,400 56,400
31 Balance 56,400

Account Title: ALLOWANCE FOR DOUBTFUL ACCOUNTS

Account No: 113
DATE ITEMS PR DEBIT CREDIT BALANCE
2020 DEBIT CREDIT
July 31 Adjusting Entry GJ4 2,820 2,820
31 Balance 2,820

Account Title: MERCHANDISE INVENTORY Account No:115

DATE ITEMS PR DEBIT CREDIT BALANCE
2020 DEBIT CREDIT
July 2 Purchase on account GJ1 26,400 26,400
5 Sale GJ1 16,560 16,560
6 Purchased returned GJ1 500 9,340
12 Purchase discount GJ1 518 8,822
6
 14 purchase GJ2 15,700 24,522
17 Refund from suppliers GJ2 700 23,822
18 Purchase on account GJ2 21,000 44,822
19 Payment of Freight in GJ2 850 45,672
21 purchase GJ2 32,600 78,272
23 Sale GJ2 21,300 56,972
24 Returned merchandise GJ3 1,300 58,272
30 Sale-on account GJ3 40,760 17,512
31 Balance 17,512

Account Title: PREPAID RENT Account No: 116

DATE ITEMS PR DEBIT CREDIT BALANCE
2020
DEBIT CREDIT
July 31 Adjusting Entry GJ4 2,000 2,000
31 Balance 2,000

Account Title: STORE SUPPLIES Account No: 117

DATE ITEMS PR DEBIT CREDIT BALANCE
2020 DEBIT CREDIT
July 2 purchase GJ1 1,000 1,000
31 Adjusting entry GJ3 300 700
31 Balance 700

Account Title: STORE EQUIPMENT Account No:170

DATE ITEMS PR DEBIT CREDIT BALANCE
2020 DEBIT CREDIT
July 3 purchase GJ1 18,000 18,000
31 Balance 18,000