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Comprehensive Problem

This document provides accounting transactions for NQ Company during December 2018. It includes information on the beginning balances, transactions throughout the month involving purchases, sales, returns, payments, and withdrawals. It also provides additional information on accrued expenses, expired insurance, depreciation, inventory count, and investment income that need to be recorded through adjusting entries. The required tasks are to journalize the transactions, prepare trial balances, adjusting entries, financial statements, closing entries, and reversing entries.

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Celine Floranza
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1K views2 pages

Comprehensive Problem

This document provides accounting transactions for NQ Company during December 2018. It includes information on the beginning balances, transactions throughout the month involving purchases, sales, returns, payments, and withdrawals. It also provides additional information on accrued expenses, expired insurance, depreciation, inventory count, and investment income that need to be recorded through adjusting entries. The required tasks are to journalize the transactions, prepare trial balances, adjusting entries, financial statements, closing entries, and reversing entries.

Uploaded by

Celine Floranza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CA5101

COMPREHENSIVE PROBLEM
ACCOUNTING CYCLE FOR MERCHANDISING BUSINESS

The account of NQ Company as of December 1, 2018 are listed below:

Cash 214,000
Accounts Receivable 338,000
Merchandise Inventory 426,000
Short-term Investment 500,000
Office Supplies 31,000
Prepaid Insurance 48,000
Land 370,000
Building 900,000
Accum. Depreciation - Bldg. 250,000
Equipment 800,000
Accum. Depreciation - Equip. 200,000
Accounts Payable 172,000
Mortgage Payable 1,200,000
NQ, Capital 1,805,000
3,627,000 3,627,000

The following transactions occurred during the month of December 2018:

Dec. 1 Settled the accounts payable of P115,000 less 2% discount.


3 Collected the accounts receivable of P180,000 less 3% discount.
4 Sold merchandise on account to PPC Supplies, P210,000. Terms: FOB destination,
3/10, n/30. PPC Supplies paid the freight for P3,000.
5 Received returns from PPC Supplies, P25,000.
7 Purchased merchandise from OTQ Products, P232,000. Terms: FOB shipping point,
2/10, n/30. NQ Company paid P2,000 for the transportation cost.
9 Returned goods to OTQ Products, P12,000.
10 Paid interest on mortgage payable, P8,000.
11 Received payment from PPC Supplies for the amount due.
12 Sold merchandise to Oani Shoppers, P330,000. Terms: FOB shipping point, 3/10, n/30.
18 Received payment from Oani Shoppers.
19 Sold merchandise to NVL Shop, P242,000. Terms: FOB shipping point, 3/10, n/30.
NQ Company paid P5,000 for the freight.
20 Paid P9,000 for representation expense.
29 Received from NVL Shop returned merchandise in the amount of P18,000 from the
December 19 sales.
30 The owner, Genevieve, withdrew merchandise for personal use. Cost - P20,000;
Selling price - P30,000.
Additional information:
(1) Salaries in the amount of P73,000 have accrued on December 31.
(2) Insurance coverage with premium of P2,000 has expired at month-end.
(3) Depreciation on the building and on the equipment for the month amounted to P3,000
and P4,500, respectively.
(4) Office supplies on hand at month-end amounted to P7,000.
(5) Interest of P2,800 had accrued.
(6) Short-term investment earned an unrecorded investment income amounting to P15,000.
(7) A count of the inventory amounted to P453,000 on December 31, 2018.

Required:
1. Journalize the transactions during December 2018. (Use periodic inventory system)
2. Prepare the Unadjusted Trial Balance.
3. Prepare the adjusting journal entries.
4. Prepare the worksheet reflecting the adjusted trial balance.
5. Prepare the functional form Income Statement, Statement of Changes in Owner's Equity
and Statement of Financial Position.
6. Prepare the closing entries.
7. Prepare the Post-Closing Trial Balance.
8. Prepare the reversing entries.

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