Date Particulars F Debit Credit

The following transactions occurred during October 2018 for Lu Merchandising owned by
Lu Han. Record the following transactions using Periodic Inventory System.

GENERAL JOURNAL
1 – Invested in the business Cash – P175,000; Merchandise costing – P200,000;
Equipment – P75,000.
Date Particulars F Debit Credit
2 – Purchased merchandise on credit from Happy Lang Trading costing P150,000 Terms:
1/10, n/30 Paid freight on the merchandise purchased, P500.
3 – Returned damaged merchandise to Happy Lang Trading goods amounting to P10,000.
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4 – Merchandise were sold for cash P100,000
5 – Refund the customer P5,000 for merchandise returned from October 4 sales
7 – Sold goods on account amounting to P77,000 to Sam Ar. Terms: 2/10, n/30
8 – Cash paid for the following: Selling Expenses P5,000; General Expenses P4,000
9 – Received merchandise returned from Sam Ar for which an allowance amounting to

P8,000 was given to him.
10 – Sold merchandise to Cat Logan amounting to P65,000 on credit Terms: 2/5, n/30.
Paid P500 for delivery of these goods to customer.
11 – Fully paid the account to Happy Lang Trading
15 – Received full payment from Sam Ar.
15 - Paid salaries of employees P15,000
17 – Paid water and electricity P2,000
18 – The owner withdraws P5,000 cash
20 – Acquire a loan from Help Bank P100,000 to be paid in two years; Bought a 2nd
hand delivery truck for P75,000
25 – Bought an equipment to Dora Bell Company amounting to P15,000 making a down

payment of P5,000 and gave a 60-day note for the remaining balance.
26 – Purchased supplies on account worth P2,000 from Manny Pey Trading
27 – Sold merchandise on account to Zen Ki amounting to P60,000

Terms: 2/5, n/30. Freight for this of P500 was paid.
28 – Received defective goods from Zen Ki for which a credit memo of P7,000 was
issued
29 – Paid the account to Manny Pey Trading
30 – Paid the employee’s salary of P20,000 and monthly rent of P20,000
31 – Received full payment from Cat Logan and Zen Ki
Note: Merchandise inventory at month-end per physical count is P 159,100
CHART OF ACCOUNTS
101 Cash 401 Sales

112 Accounts Receivable 402 Sales Returns and Allowances
120 Merchandise Inventory 403 Sales Discount
126 Supplies 420 Income Summary Account
130 Equipment 501 Purchases
150 Delivery Truck 502 Purchases Returns and Allowances
201 Accounts Payable 503 Purchases Discounts
210 Notes Payable 504 Freight In
250 Loans Payable 505 Salaries Expense
301 Lu Han, Capital 506 Selling Expenses
302 Lu Han, Drawing 507 Rent Expense
508 Freight Out
509 Utilities Expense
510 General Expenses
INSTRUCTIONS: Prepare the following:
1. Journal entries for October 2018 transactions

2. Posting to General Ledgers
3. Trial Balance
4. Statement of Operations
5. Statement of Changes in Owner’s Equity
6. Statement of Financial Position
7. Statement of Cash Flow
8. Closing Entries
9. Post – Closing Trial Balance
POSTING TO THE LEDGER:

GENERAL LEDGER
ACCOUNT NAME: CASH ACCOUNT NO.
Date Particulars F Debit Credit Balance
ACCOUNT NAME: Accounts Receivable ACCOUNT NO.

ACCOUNT NAME: Merchandise Inventory ACCOUNT NO.

ACCOUNT NAME: Supplies ACCOUNT NO.

ACCOUNT NAME: Equipment ACCOUNT NO.

ACCOUNT NAME: Delivery Truck ACCOUNT NO.
ACCOUNT NAME: Accounts Payable ACCOUNT NO.

ACCOUNT NAME: Notes Payable ACCOUNT NO.

ACCOUNT NAME: Loans Payable ACCOUNT NO.

ACCOUNT NAME: Lu Han, Capital ACCOUNT NO.

ACCOUNT NAME: Lu Han, Drawing ACCOUNT NO.

ACCOUNT NAME: Sales ACCOUNT NO.

ACCOUNT NAME: Sales Return and Allowances ACCOUNT NO.

ACCOUNT NAME: Sales Discount ACCOUNT NO.
ACCOUNT NAME: Income Summary Account ACCOUNT NO.

ACCOUNT NAME: Purchases ACCOUNT NO.

ACCOUNT NAME: Purchase Return and Allowances ACCOUNT NO.

ACCOUNT NAME: Purchase Discount ACCOUNT NO.

ACCOUNT NAME: Freight In ACCOUNT NO.

ACCOUNT NAME: Salaries Expense ACCOUNT NO.

ACCOUNT NAME: Selling Expenses ACCOUNT NO.

ACCOUNT NAME: Rent Expense ACCOUNT NO.
ACCOUNT NAME: Freight Out ACCOUNT NO.

ACCOUNT NAME: Utilities Expense ACCOUNT NO.

ACCOUNT NAME: General Expenses ACCOUNT NO.

XLu Han Merchandising

TRIAL BALANCE
October 31, 2016
ACCOUNT
ACCOUNT NAMES DEBIT CREDIT
CODE
101 Cash
112 Accounts Receivable
120 Merchandise Inventory
126 Supplies
130 Equipment
150 Delivery Truck
201 Accounts Payable
210 Notes Payable
250 Loans Payable
310 Lu Han, Capital
302 Lu Han, Drawing
401 Sales
Sales Returns and
402 Allowances
403 Sales Discount
501 Purchases
502 Purchases Returns and Allowances
503 Purchases Discounts
504 Freight In
505 Salaries Expense
506 Selling Expenses
507 Rent Expense
508 Freight Out
509 Utilities Expense
510 General Expenses
TOTALS Php
Lu Han Merchandising
Income Statement
For the Month Ended October 31, 2016
Sales _____________
Less: Sales Returns and Allowances _____________
Sales Discount _____________ _____________
Net Sales ____________
Less: Cost of Goods Sold
Merchandise Inventory, 10/1/2016 _____________
Purchases _____________
Less: Purchases Returns _________
and Allowances
Purchases Discounts _________ _____________
Net Purchases
Freight In _____________
Net Cost of Purchases _____________
Cost of Goods Available for Sale
Less: Merchandise Inventory, 10/31/2016 _____________
Cost of Goods Sold ____________
Gross Profit
Less: Operating Expenses

Salaries Expense _____________
Selling Expenses _____________
Rent Expense _____________
Freight Out _____________
Utilities Expense _____________
General Expenses _____________ _____________
Net Income _____________

_____________
Statement of Changes in Equity
Lu Han, Capital, 10/1/2016 ________________
Add: Additional Investment _____________
Net Income _____________ ________________
Total
Less: Lu Han, Withdrawals ________________
Lu Han, Capital, 10/31/2016 ________________

________________
Statement of Financial Position
As of October 31, 2016
ASSETS
Current Assets
Cash _______________
Accounts Receivable _______________
Merchandise Inventory _______________
Supplies _______________
Total Current Assets
_____________
Non Current Assets
Equipment _______________
Delivery Truck _______________
Total Non Current Assets _____________
TOTAL ASSETS
_____________
LIABILITIES
Current Liabilities
Accounts Payable _______________
Notes Payable _______________
Total Current Liabilities _____________
Non Current Liabilities
Loan Payable _______________
Total Non Current Liabilities
_____________
TOTAL LIABILITIES
OWNER’S EQUITY
Lu Han, Capital, October 31, 2016
_____________
TOTAL LIABILITIES AND OWNER’S EQUITY
_____________
_____________
Statement of Cash Flow
Cash flow from operating activities:

Cash Sales _____________
Cash received from credit customers _____________
Payments for goods/supplies purchased on account (____________)
Payments for freight in (____________)
Payments for refund to customers (____________)
Payments to employees (____________)
Payments for rent (____________)
Payments for utilities (____________)
Payments for selling expenses (____________)
Payments for general expenses (____________)
Payments for freight out (____________)
Net cash provided by (used) in operating activities _________
Cash Flows from Investing Activities

Payments to acquire equipment (____________)
Payments to acquire delivery truck (____________)
Net cash provided by (used in) investing activities __________
Cash Flow from financing activities:

Cash received as investment by the owner _____________
Cash received from borrowings _____________
Payments for withdrawals by the owner (____________)
Net cash provided by (used in) financing activities __________
Net Increase (Decrease) in Cash: __________
Cash at the beginning of the period __________
Cash balance at the end of the period __________
__________
CLOSING ENTRIES:
GENERAL JOURNAL FOR CLOSING ENTRIES
Page
DATE PARTICULARS P.R DEBIT CREDIT
.
2016
Oct. 31 Merchandise Inventory, Ending 120
Sales 401
Purchases Returns and Allowances 502
Purchases Discounts 503
Income Summary 420
To close temporary accounts with
credit balances and to establish
merchandise inventory the ending

Income Summary 420
Merchandise Inventory, Beginning 120
Purchases 501
Freight In 504
Sales Returns and Allowances 402
Sales Discounts 401
Salaries Expense 502
Selling Expenses 503
Rent Expense 506
Freight Out 507
Utilities Expense 509
General Expenses 510
To close temporary accounts with
debit balances and to remove
beginning inventory

Income Summary 420
Lu Han, Capital 301
To close income to capital

Lu Han, Capital 301
Lu Han, Drawing 302
to close drawing to capital account

Post-Closing Trial Balance
October 31, 2016
XACCOUNT
ACCOUNT NAMES DEBIT CREDIT
CODE
101 Cash
112 Accounts Receivable
120 Merchandise Inventory
126 Supplies
130 Equipment
150 Delivery Truck
201 Accounts Payable
210 Notes Payable
250 Loans Payable
310 Lu Han, Capital
TOTAL
Php


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The following transactions occurred during October 2018 for Lu Merchandising owned by

Lu Han. Record the following transactions using Periodic Inventory System.