answer 4 and 5
Kate Spade Co. is a barrel bag retailer founded in January 2003 by Kate and Andy Spade. The Barrel Bag is a cylindrical bag with barrel-shaped compartments. Popular amongst athletes for their versatile carry options whether handheld or on the shoulder body, The Barrel Bag is typically made with cloth like materials. The company uses the perpetual inventory system. The account balances for Kate Spade Co. as of December 1, 2020, are as follows: 110 Cash 60,640 111 20,000 112 113 115 124,880 10,400 252,800 15,000 10,200 116 117 123 417,200 124 50,400 Notes Receivable Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Prepaid Insurance Store Supplies Store Equipment Accumulated Depreciation Store Equipment Accounts Payable Salaries Payable Income Tax Payable Share Capital Retained Earnings Dividends Income Summary Sales 210 73,800 211 219 310 400,000 311 67,520 40,000 312 313 410 3,263.000 411 Sales Returns and Allowances Sales Discounts 82.400 52,800 412 510 2,153.200 511 18,000 14,800 512 520 521 522 379,600 72,000 Cost of Merchandise Sold Freight In Purchase Discount Taken Salaries Expense Advertising Expense Depreciation Expense Store Supplies Expense Provision for Doubtful Accounts Rent Expense Insurance Expense Miscellaneous Expense Provision for Income tax 523 524 525 526 529 530 74,400 15,600 17,800 74,400 1,000 611 Interest Revenue 01-Dec 03-Dec Received P26,000 cash from JRP Trading Co. on account, no discount. Purchased 60 units of bag merchandise account at P 1,000 per unit from Angeles Alliance Co., terms 2/10, n/30, FOB shipping point. Paid transportation charges on purchase of December 3, P1,500. Issued check no.10767. Freight IN account is used to record inbound deliveries. 04-Dec 06-Dec 07-Dec 10-Dec 13-Dec 14-Dec 15-Dec 16-Dec 18-Dec Sold 80 units of merchandise on account to Island Haze., terms 2/10, n/30 FOB shipping point, at P1,200 for each bag. Determine cost of the merchandise sold using the company's valuation method. Purchased store supplies for P1,400 and issued check for payment. Issued check no. 10768. Sold 50 units of bag merchandise for cash at P1,480 for each bag. Paid for merchandise purchased on December 3, less discount. Issued check no. 10769 for the amount paid. Purchase discount availed is recorded as a credit to Purchase Discount Taken. Received 5 units of bag merchandise returned on sale of December 6, and credited to customer account. The receipt of bag was correspondingly updated to Inventory subsidiary ledger. Determine cost of the merchandise returned. Paid rent for December, P8,000. Issued check no. 10770 Received cash from sale of December 6, less return of December 14 and discount. Purchased 40 units of bag merchandise from Leatherware Co, for P41,600. Issued check no. 10771 for payment. Sold 80 bags to Hoodwink for P1,240 per bag. Terms FOB Destination 3/15,n/45 Paid P23,800 to Bench on account, no discount. Issued check no. 10772. Purchased 86 bags merchandise on account from Unison Pan Co., terms 1/10, n/30, FOB destination, for P90,000 less trade discount of P2.280. Received P72,480 check payment from Simply Shoe Inc. on account, no discount. Returned 4 pcs of damaged merchandise purchased on December 21, receiving credit from the seller. Refunded cash on 2 pcs of sales returns previously sold for cash last December 10, P2,960. Issued check no 10773. Record the receipt and also the cost of the merchandise returned. Paid salaries of P 33,960. Issued check no. 10774 for encashment and release to each employees. Paid advertising expense to Jimin and Suga for December marketing campaign. Issued check no 10775 for P6.000 Received P 12,800 from Munsing Company on account, no discount. Paid for purchase of December 21, less return of December 24 and discount. Issued check no. 10776 19-Dec 20-Dec 21-Dec 22-Dec 24-Dec 26-Dec 28-Dec 29-Dec 30-Dec 31-Dec 1 Journalize the transactions for December. Omit explanations ( 26 points) Record transactions to the nearest Peso. Use the following format of recording to an inventory subsidiary ledger to compute average cost: (5 pts) and inventory shrinkage. Compute unit cost to the nearest hundredths. ( 5 points) Date Purchased/Receipt from Returns Sold/Returns to Supplier Inventory Balance Units Unit Cost Amount Units Unit cost Amount Units Unit cost Total Beg bal 254 995.28 252,800 2. Post the journal entries to the general ledger (Using T Account format), extending the month-end balances to the appropriate balance columns after all posting is completed.( 30 points) 3. Prepare a trial balance as of December 31 on a ten-column worksheet, listing all accounts in the order given in the ledger. Complete the worksheet for the calendar year ended December 31, using the following adjustment data: (8 points) a. The company's bank statement for the month of December reports a balance of P82,240 as of December 31, 2020. Included with the bank statement was a P 72,480 check collection from Simply Shoe of its account, charged back to Kate Spade Co. as NSF. The monthly service bank charges is P180. Taken up as debit to Miscellaneous expenses. The bank had collected for Kate Spade Co. the amount of P5,600, representing amortization on its notes receivable. The principal amounts to P5,000 while the balance represents interest revenue. Two checks written by Kate Spade Co. for payment of its advertisement, Check no. 10775 and payment of account to Unison Pan Co., Check no. 10776 remained outstanding, Collection from Munsing Company for P 12,800 remained undeposited as of yearend and was deposited only on January 4, 2021. Prepare a monthly reconciliation statement based on Unadjusted balance per books of P73,296 and record the necessary adjustments. (5 points) b. Aging of account receivable indicated a need to provide an allowance for doubtful accounts of P 13,600 is needed as of December 31, 2020. c. The year end physical count revealed that three bags were missing. The cost of the missing bags amounted to P3,028. This is charged to Cost of Merchandise Sold. d. At December 31, stores supplies on hand is 4,200. e. The company pays its insurance policies 12 months in advance. Its most recent payment was made on June 1, 2020. Expired insurance is from June to December for adjustment. f. Depreciation of the store equipment is based on estimated life of 10 years with no salvage value. Straight-line method is used. g. Weekly payroll of casual employees who work on a five day work week, amounts to P4,100. These employees are paid up to date at the close of business each Friday. Regular employees are paid on a monthly basis. Assume that December 31 falls on a Thursday to compute unpaid salaries as of December 31, 2020. h. Provision for income tax for the year is estimated at P106,750. Of this amount P74,400 has been provided in prior months and paid to BIR. Compute the accrued income taxes as of December 31, 2020 due on April 15, 2021. 4. Journalize (10 points) and post adjusting entries ( Posting 3 points). Omit explanations 5. From the adjusted trial balance prepared in No. 3, prepare an income statement ( Multi step format) 5 POINTS, a statement of changes in equity for the year ended December 31, 2020 (3 points). Also prepare the company's statement of financial position (Report format) (5 points) dated December 31, 2020 (13 points)
