ABM 003 and ABM 004 : ACCOUNTING 2 and FINANCE FINAL PERFORMANCE TASK EXAM

INSTRUCTIONS:
1) Assume that you will establish your own grocery store in your locality.
2) Given the transactions below, provide the dates, amounts and terms.Do not think of other transactions anymore just follow what is
provided.
3) Journalize transactions, prepare ledger, trial balance and financial statements according to the system assigned to you as either Periodic
or Perpetual.
4) Use the given template.
5) Encode it if your resources permit but you can also have it handwritten.
6) Deadline: December 11, 2020
7) Rubrics includes PUNCTUALITY:
Accounting
Transactions 10%
Process(Journalizing-Trial Balance) 40%
Financial Statements 40%
Punctuality 10%

Business Finance
Formula 10%
Process(Calculation, Ratios Format, Correctness of Answers) 40%
Analysis 40%
Punctuality 10%

Date Transactions Amounts Terms if

Applicable
1 Jan 1 The owner invested cash for merchandising business 100,000
2 Jan 2 The company purchased goods on accounts with discount terms 100,000 2/20,1/10 n/30
3 Jan 2 Paid the transportation of goods from the supplier 2,000
4 Jan 7 Bought Equipment on cash 150,000
5 Jan 10 Returned some items of Transaction 2 10,000
6 Jan 12 Sales on account with terms(Indicate also cost of sales if 40,000 - sales 2/10, n/30
perpetual)
30,000 – cost of sales
7 Jan 16 Paid the first purchase and took the discount 90,000 2/20,1/10 n/30
8 Jan 20 The customer returned some substandard item from transaction 10,000 - sales
6(Indicate also cost of sales if perpetual)
7,500 – cost of sales
9 Jan 22 Received cash payment from transaction 6. The customer 30,000 2/10, n/30
availed the discount.
10 Jan 23 Made additional purchase on cash 50,000
11 Jan 25 Sold merchandise on cash((Indicate also cost of sales if 20,000 – sales
perpetual)
15,000 – cost of sales
12 Jan 25 Paid transportation fee upon delivery of goods to a customer 1,500
13 Jan 28 Customer who paid in cash returned goods(Indicate also cost of 5,000 – sales
sales if perpetual)
52,500 – cost of sales
14 Jan 30 Paid various expenses:
Salaries – 5,000
Utilities – 3,000 22,000
Rent – 10,000
Advertising – 4,000
15 Jan 31 Owner’s Withdrew cash for personal purpose 10,000
16 Conducted month end inventory count 106,450
 CHART OF ACCOUNTS
No. Accounts No. Accounts
101 Cash 413 Sales Discounts
112 Accounts Receivable 500 Cost of Sales
120 Merchandise Inventory 510 Purchases
126 Supplies 512 Purchase Returns and Allowances
130 Equipment 513 Purchase Discounts
201 Accounts Payable 516 Freight-In
202 Notes Payable 630 Salaries
301 Owner’s, Capital 631 Advertising
302 Owner’s, Drawing 635 Rent Expense
401 Sales 644 Freight-Out
412 Sales Returns and Allowances 645 Utilities Expense

PERPETUAL INVENTORY SYSTEM

JOURNALIZING

Date Particulars PR DR CR

Jan 1 Dr Cash 500,000

Cr Owner’s, Capital 500,000

To record initial investment

Jan 2 Dr. Merchandise Inventory 102,000

Cr. Accounts Payable 100,000

Cash 2,000

To record purchase on account

Jan 7 Dr. Equipment 150,000

Cr. Cash 150,000

To record purchase of equipment

Jan 10 Dr. Accounts payable 10,000

Cr. Merchandise Inventory 10,000

To record purchase return

Jan 12 Dr. Accounts Receivable 40,000

Cr. Sales 40,000

To record sales on account

Dr. Cost of Sales 30,000

Cr. Merchandise Inventory 30,000

To record cost of sales

Jan 16 Dr. Accounts payable 90,000

Cr. Merchandise Inventory 1,800

 Cash 88,200

To record payment of payable

Jan 20 Dr. Sales return and allowances 10,000

Cr. Accounts receivable 10,000

To record sales returns

Dr. Merchandise Inventory 7,500

Cr. Cost of sales 7,500

To record sales returns

Jan 22 Dr. Cash 29,400

Sales Discounts 600

Cr. Accounts receivable 30,000

To record collection

Jan 23 Dr. Merchandise inventory 50,000

Cr. Cash 50,000

To record purchase

Jan 25 Dr. Cash 20,000

Freight Out 1,500

Cr. Sales 20,000

Cash 1,500

To record sales

Dr. Cost of sales 15,000

Cr. Merchandise inventory 15,000

To record sales

Jan 28 Dr. Sales returns and allowances 5,000

Cr. Cash 5,000

To record sales return

Dr. Merchandise inventory 3,750

Cr. Cost of sales 3,750

To record sales return

Jan 30 Dr. Salaries expense 5,000

Utilities expense 3,000

Rent expense 10,000

Advertising expense 4,000

 Cr. Cash 22,000

To record expenses

Jan 31 Dr. Owner’s, Drawing 10,000

Cr. Cash 10,000

To record withdrawal

POSTING TO THE LEDGER

Account Title: CASH

Account #: 101

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 1 Initial investment 500,000 500,000

Jan 2 Freight In 2,000 498,000

Jan 7 Purchase of equipment 150,00 348,000

Jan 16 Payment of payable 88,200 259,800

Jan 22 Collection of receivables 29,400 289,200

Jan 23 Purchase 50,000 239,200

Jan 25 Sales 20,000 259,200

Jan 25 Freight out 1,500 257,700

Jan 28 Sales return 5,000 252,700

Jan 30 expenses 22,000 230,700

Jan 31 Withdrawal 10,000 220,700

Account Title: ACCOUNTS RECEIVABLES

Account #: 112

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 12 Receivable 40,000 40,000

Jan 20 Sales return 10,000 30,000

Jan 22 Collection 30,000 0

Account Title: MERCHANDISE INVENTORY

Account #: 120

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 1 Purchase on account 102,000 102,000

Jan 10 Purchase return 10,000 92,000

Jan 12 Sale 30,000 62,000

Jan 16 Discount 1,800 60,200

Jan 20 Sales return 7,500 67,700

Jan 23 Purchases 50,000 117,700

Jan 25 Sales 15,000 102,700

Jan 28 Sales return 3,750 106,450

Account Title: EQUIPMENT

Account #: 130

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 7 Equipment 150,000 150,000

Account Title: ACCOUNTS PAYABLE

Account #: 201

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 2 Purchase on account 100,000 100,000

Jan 10 Purchase return 10,000 90,000

Jan 16 payment 90,000 0

Account Title: Owner’s, CAPITAL

Account #: 301

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan Initial investment 500,000 500,000

Account Title: Owners, DRAWING

Account #: 302

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR
 Jan 31 Withdrawal 10,000 10,000

Account Title: SALES

Account #: 401

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 12 Sales on account 40,000 40,000

Jan 25 Cash Sales 20,000 60,000

Account Title: SALES RETURNS AND ALLOWANCES

Account #: 412

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 20 Sales return 10,000 10,000

Jan 28 Sales return 5,000 15,000

Account Title: SALES DISCOUNTS

Account #: 412

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 22 Discount 600 600

Account Title: COST OF SALES

Account #: 500

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 12 Sale on account 30,000 30,000

Jan 20 Sales return 7,500 22,500

Jan 25 Cash sales 15,000 37,500

Jan 28 Sales return 3,750 33,750

Account Title: SALARIES

Account #: 630

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 30 Salaries 5,000 5,000

Account Title: ADVERTISING

Account #: 631

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 30 Advertising 4,000 4,000

Account Title: Rent Expense

Account #: 635

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 30 Rent 10,000 10,000

Account Title: Freight-Out

Account #: 635

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 25 Freight 1,500 1,500

Account Title: UTILITIES EXPENSE

Account #: 645

AMOUNT BALANCES
Date Remarks PR
DR CR DR CR

Jan 30 Utilities 3,000 3,000

______________

TRIAL BALANCE

_____________________
 Acct. # Acct. Title Debit Credit

101 Cash 220,700

112 Accounts Receivables 0

120 Merchandise Inventory 106,450

130 Equipment 150,000

201 Accounts Payable 0

301 Owner’s, Capital 500,000

302 Owner’s, Drawing 10,000

401 Sales 60,000

412 Sales Returns and Allowances 15,000

413 Sales Discounts 600

500 Cost of Sales 33,750

630 Salaries 5,000

631 Advertising 4,000

635 Rent Expense 10,000

644 Freight-Out 1,500

645 Utilities Expense 3,000

TOTAL 560,000 560,000

__________________________

STATEMENT OF FINANCIAL PERFORMANCE

______________________________________

Sales 60,000

Less: Sales Returns and Allowances 15,000

Less: Sales Discounts 600 -15,600

Net Sales 44,400

Less: Cost of Sales -33,750

Gross Sales 6,650

Less: Operating Expenses

Salaries 5,000

Advertising 4,000

Rent Expense 10,000

Freight-Out 1,500

Utilities Expense 3,000

Total Operating Expense -23,500

NET LOSS/PROFIT -12,850

_______________________

STATEMENT OF CHANGES IN OWNER’S EQUITY

 ________________________________________________

Owner’s, Capital 500,000

Less: Owner’s, Drawing 10,000

Total 490,000

ADD/LESS: PROFIT/LOSS -12,850

Owner’s , Capital-End 477,150

_______________________________

STATEMENT OF FINANCIAL POSITION

______________________________________

ASSET

Current Asset

Cash 220,700

Accounts Receivables 0

Inventory 106,450

Prepaid Expenses 0

Total Current Asset 327,150

Non-Current Asset

Equipment 150,000 150,000

TOTAL ASSET 477,150

LIABILITIES AND OWNER’S EQUITY

Liabilities

Accounts Payable 0

Total Liabilities 0

Owner’s Equity

Owner’s, Capital-End 477,150 477,150

TOTAL LIABILITIES AND OE 477,50

_______________________

STATEMENT OF CASH FLOW

 ________________________________

Cash Flow from the Operating Activities

Cash Sales from Merchandising 20,000

Collection on Customers Account 29,400

Refund from Merchandise Purchased 0

Payment on Transportation -2,000

Payment on Accounts -88,200

Payment on Purchases -50,000

Payment on Operating Expenses -23,500

Refund on Merchandise Sold -5,000

NET CASH FROM OPERATING ACTIVITIES -119,300

Cash Flow from Investing Activities

Purchase of Equipment -150,000

NET CASH FROM INVESTING ACTIVITIES -150,000

Cash Flow from Financing Activities

Cash Investment by the Owner 500,000

Cash Withdrawals by the Owner -10,000

NET CASH FROM FINANCING ACTIVITIES 490,000

NET INCREASE IN CASH 220700

Cash Balance at the Beginning of the Period 0

Cash Balance at the End of the Period 220,700

Part II. Analysis

FINANCIAL STATEMENT ANALYSIS, COMPUTE THE FOLLOWING RATIOS. Provide the formula and show your solution

Quick Ratio

Quick Assets 220,700

= =0 %
Current Liabilities 0

Current Ratio

Current Assets 327,150

= =0 %
Current Liabilities 0

Gross Margin

Net Sales 44,400

= =1.3156∨131.56 %
Cost of Sales 33,750

Profit Margin

N et Income/(Loss ) (12,850)
= =−0.2894∨−28.94 %
Net Sales 44,400
Return on Asset (use TOTAL ASSET)

Net Income /(Loss) (12,850)

= =−0.0269∨−2.69 %
Total Assets 477,150

Debt to Equity Ratio

Total Liabilities 0
= =0 %
Total Capital 477,150

Total Liabilities 0
Debt Ratio = =0 %
Total Assets 477,150

General Interpretation (More than 3 sentences)

Even though the business doesn’t have any loans or payables, it is struggling financially due to the fact that its expenses exceeded its gross
profit. Hence, there is a net loss. Also, there no other current assets that could be a source of funds. Having no receivables is a big factor
because it can also be a source of income.

The business currently has a markup percentage of 25%, they should reconsider to adjust their markup percentage and make it at least 50%
or more; to make the business more profitable and to have a higher income. However, adjusting the markup percentage is not just the only
thing to do, the business should also control its expenses.