Mr. Jack Kita started his grocery business on January 2. 2p17. The following are

Question

Mr. Jack Kita started his grocery business on January 2. 2p17. The following are the transactions for the month of January 2017. 2Mr. Kita investments to his business-Kita Kita Grocery a total cash of P800, 000 3 Bought merchandise on account from Banana CompanyP100, 000 FOB Shipping Point, Terms 3/10, n/30. Paid freight charges of P5 000 the goods were shipped today Returned merchandise costing P5 000 to Banana Company 4 5 Bought Vehide for cash, P240 000. The vehicle will have a useful life of 5 years and a full months depreciation is provided in the month of acquisition. 6 Bought merchandise for cash P50 000 and received 2% trade discount. Paid freight of P4 000 Sold merchandise for cash P80 000 and gave 2% trade discount. Paid freight of P1 200 Bought merchandise on account from Puso Company P150 000, FOB Destination, Terms 2/15, n/30. The merchandise arrived on January 12, 2017 Sold merchandise on account to Kampana Company P200 000 FOB Shipping Point, Terms 2/10, n/30. Goods were shipped today Received P10 000 worth of merchandise returned by Kampana Company due to wrong specifications Paid in full the account to Banana Company for purchases on January 3 10 12 20 Collected in full the account of Kampana Company 21 Paid in full the account to Puso Company representing purchase on January 10

Explanation / Answer

A/C CODE 2 A1 CASH A/C DR. 800000 O1 TO CAPITAL A/C 800000 (INTRODUCED CASH IN BUSINESS) 3 C1 PURCHASE A/C DR. 100000 L1 TO BANANA COMPANY (ACCOUNTS PAYABLE) 100000 (PURCHASED MERCHANDISE ON CREDIT) C2 INWARD FRIEGHT EXPENSE A/C DR. 5000 A1 TO CASH 5000 (PAID THE FRIEGHT) 4 L1 BANANA COMPANY (ACCOUNTS PAYABLE) A/C DR. 5000 C1-b TO PURCHASE RETURNED 5000 MERCHANDISE RETURNED TO BANANA COMPANY) 5 A5 VEHICLE A/C DR. 240000 A1 TO CASH 240000 (VEHICLE PURCHASE FOR A CASH) 6 C1 PURCHASE A/C DR. 49000 A1 TO CASH 49000 (PURHCHASED MERCHANDISE AND GOT 2% TRADE DISCOUNT) C2 INWARD FRIEGHT EXPENSE A/C DR. 4000 A1 TO CASH 4000 (PAID THE FRIEGHT) 7 A1 CASH A/C DR. 78400 I1 TO SALE 78400 (SOLD MERCHANDISE WITH 2% TRADE DISCOUNT) E5 OUTWARD FRIEGHT A/C DR. 200 A1 TO CASH 200 (PAID FRIEGHT FOR SALE) 10 C1 PURCHASE A/C DR. 150000 L1 TO PUSO COMPPANY (ACCOUNTS PAYABLE) 150000 (PURCHASE THE MERCHANDISE) 12 A2 KAMPANA (ACCOUNTS RECEIVABLE ) A/C DR. 200,000 I1 TO SALE 200,000 (SOLD MERCHANDISE ON CREDIT) I1-b SALE RETURN A/C DR. 10000 A2 TO KAMPANA (ACCOUNTS RECEIVABLE ) A/C 10000 (GOODS RETURNED BY CUTOMER) L1 BANANA COMPANY (ACCOUNTS PAYABLE) A/C DR. 95000 A1 TO CASH 95000 (PAID IN FULL TO BANANA COMPANY) 20 A1 CASH A/C DR. 190000 A2 TO KAMPANA (ACCOUNTS RECEIVABLE ) A/C 190000 (COLLECTED IN FULL FORM CUSTOMER) 21 L1 PUSO COMPANY (ACCOUNTS PAYABLE ) A/C DR. 150000 A1 TO CASH 150000 (PAID IN FULL TO PUSO COMPANY) 22 A4 PREPAID INSURANCE 200 A1 TO CASH 200 (INSURANCE PREMIUM PAID , INSURANCE WILL START FROM NEXT MONTH) 23 A1 CASH IN BANK A/C DR, 60000 L2 TO NOTES PAYABLE 60000 (SHORT TERM LOAN BORROWED FROM BANK ISSUING PROMISORY NOTE) 25 O2 JACK KITA DRAWING A/C DR. 20000 A1 TO CASH 20000 (WITHDRAWN FOR FAMILY USE) 27 C1 PURCHASE A/C DR. 40000 L1 TO TUNGKOD COMPANY (ACCOUNTS PAYABLE) 40000 (PURCHASE THE MERCHANDISE FROM THE TUNGKOD COMPANY ON CREDIT) 28 A2 ALALAY COMPANY (ACCOUNTS RECEIVABLE) A/C DR. 70000 I1 TO SALE 70000 (SOLD MERCHANDISE TO ALALAY COMPANY ON CREDIT) 30 E3 SALARIES EXPENSE A/C DR. 18000 E4 RENT EXPENSE A/C DR. 12000 A1 TO CASH 30000 (PAID THE EXPENSES) 31 E1 DEPRECIATION EXPENSE A/C DR. 4000 DEPRECIATION] A5 TO VEHICLE A/C 4000 240000 /5 OR A6 OR TO ACCUMULATED DEPRECIATION A/C 48000 FOR A YEAR (DEPRECIATION FOR THE MONTH PROVIDED) 48000/12 4000 FOR A MONTH O3 INCOME SUMMARY A/C DR. 6768 A2-a TO ALLOWANCE FOR BAD DEBT 6768

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