9 In March 2019, Ms. Rea Navara opened Navara Department Store. The following are the transactions incurred by her business in its first month of operation: March 1 Ms. Navarra invested Php 150,000 cash and Php 25,000 worth of office equipment in the name of the business. 2 Hired a sales assistant with a monthly salary of Php 3,000. 4 Bought merchandise from LS Enterprises for Php 21,500 cash and paid transportation cost of Php 300. 5 Paid advertising for the month, Php 500. 6 Purchased office supplies for cash, Php 6,000. 7 Returned defective merchandise worth Php 1,800 to LS Enterprises. Sold merchandise on credit to Mr. Alejo, Php 19,200. The cost of merchandise is Php 15,000. 10 Paid the transportation worth Php 120 for the merchandise sold on July 9. 12 Received returned merchandise from Mr. Alejo worth Php 750. The cost of merchandise returned if Php 586. 15 Paid half-month salary of employee, Php 1,500. 16 Sold merchandise for cash amounting to Php 10,800. The cost of merchandise is P6,000. 18 Received payment from the credit of Mr. Alejo. Navara Department Store granted a discount of Php 369. 19 Bought merchandise on credit from Zee Wear Store for Php 8,400. 20 Paid transportation cost of Php 80 for the merchandise bought on March 19. 22 Returned defective merchandise to Zee Wear Store, Php 800. 23 Sold merchandise for cash, P5,000. The cost of merchandise is 3,800. 25 Paid the credit to Zee Wear Store. A discount of Php 152 was granted. 28 Paid the utilities for the month amounting to Php 1,200. 31 Ms. Navara withdrew Php 4,000 cash from the business. Adjustments: a. Half-month salary of employee has accrued on March 31. b. Supplies at the end of the month amounted to Php 5,400 c Office equipment depreciated by Php 100 on March 31. d. Merchandise inventory at month-end amounted to Php 3,314. 17 17 Account No. 100 120 TIT 130 140 150 151 CHART OF ACCOUNTS Account Account Titles Account Titles No. Cash 400 Sales Accounts Receivable 410 Sales Returns and Allowances Merchandise Inventory 420 Sales Discount Office Supplies 500 Purchases Office Equipment 510 Purchase Returns and Allowances Accumulated Depreciation Office Equipment 520 Purchase Discount Accounts Payable 530 Freight-in Salaries Payable 600 Freight-Out Navara, Capital 610 Advertising Expense Navara, Drawing 620 Salaries Expense 630 Utilities Expense 640 Office Supplies Expense 650 Depreciation Expense-Office Equipment 700 Income Summary 200 210 300 310 21,500 300 P9.1 Journal Entries Dr. Cr. Date Particulars Php. Php. 2019 Mar. I Cash 150,000 Office Equipment 25,000 To Navara Capital 175,000 (To record initial investment of the onener) Mar. 2. No Entry Mar. 4 Merchandise/Purchase Freight in To Cash Al 21,800 (Purchased merchandise & paid for transportation) Mar. 5. Advertising Exp. Dr. To Cast Alo SOD (Paid for advertising) Mar. 6. office supplies 6,000 To cash Ale 6,000 (Cast paid for office supplies) Mas 7. L.S. Enterprise - 1,800 To Merchandise / Purchase 1,800 (Returned defective supp- lies to L.s. Enterprise) SOD > >1 3) Date Account title & Explanation Dr. Php. Php. Mar 9. Mr. Alejo 19,200 To sales 119,200 (sold merchandise on credit) 10 Freight out. 120 To Cash Alc 120 (Paid freight on merchandise sold) 3 12. Sales Return 750 To Mr. Alejo 1750 (Merchandise returned ) 15 salary 1,500 To cash Alc 1,500 (salary paid for half month) 116 Cash 10,800 To sales Al 10,800 (sold merchandise for cast) " 18 Cash Alc 18,081 Discount Alc 369 To Mr. Alejo (18,450 | (Received from sir. Alejo S discount allowed) 19. Merchandise/Purchase 8,400 To Zee Wear store (Bought merchandise on credit) 20 Freight in 80 To cash 80 (freight paid in cast) 22. Zec Wear Store 800 To Purchase Retuan 800 (Returned merchandise) ) 18,400 11 > 33 5) )) P9.3 Data Account Title ed Explanations Dr. cr. Mar. 23 Cash Ala Php 5,000 To sales 5,000 (sold merchandise for Cash) 25 Zee Wear store 7,600 To Cast Ala 7448 To discount Alc 152 Caid to zee Wear store & discount received) 28 Utilities Exp. 1,200 To cash Ale 1,200 (Paid for utilities) 31 Navara, Drawings 4,000 To Cash 4,000 (withdrew from business) Adjustments Mar 31. salary 1,soo ) To outstanding salary 1,soo (Entry for outstanding salary) " 31 Closing stock of supplies 5,400 b) To Trading Al 15,400 (Closing stock of supplies) c Depreciation 100 To office Equipment 100 (Equipment Depreciated) d) Mechandise Inventory 3,314 To Trading Alo 13,314 (closing stock of Inventory) c) d pg.4. Working Notes 1. No Entry for Mar. 2. As per Money measure- ment concept. No Account is affected. 2 sales To Mr. Alejo 19,200 Mara. Less: Retuens 750 Mar. 12 18, 4so Less: Discount 369 Mas 18 Cast Received 18,081 Mar. 18 - 3. Total Purchase from Zee Wear store 8,400 mar. 19 Less: Returns 800 Mar. 22 7,600 Less: Discount 152 Mar 25 7,448 Mar. 25 3. POSTING TRANSACTIONS TO THE LEDGER Balance Account: Cash : Date 2019 Mar 1 No: 100 Credit Items F Debit Debit Credit 150,000 150,000 4 21,800 128,200 5 127,700 500 6,000 6 121,700 Initial Investment Payment to supplier and transportation Paid advertising Purchased office supplies Returned merchandise Paid transportation Paid salary Cash sales 7 1,800 123,500 10 120 1,500 123,380 121,880 15 16 10,800 132,680 18 Payment from customer 18,081 150,761 20 80 150,681 23 5,000 155,681 25 Paid transportation Cash sales Payment to supplier Paid utilities Owner's drawing 148,233 7,448 1,200 28 147,033 30 4,000 143,033 No: 120 Balance Account: Accounts Receivable Date Items F Debit Credit Debit Credit Account: Merchandise Inventory No: 130 : Balance Date 2019 Items F Debit Credit Debit Credit 20 No: 140 Balance Account: Office Supplies Date Items F Debit Credit Debit Credit No: 150 Balance Account: Office Equipment Date Items F Debit Credit Debit Credit No: 151 Balance Account: Accumulated Depreciation Office Equipment Date Items F Debit Credit Debit Credit No: 200 Account: Accounts Payable Date Items Balance Debit Credit F Debit Credit