AT 9-3Adjusting Entry for Merchandise Inventory

Listed below is a partial trial balance of the Charito Guillermo Retailers at Dec. 31, 2020'.

Merchandise InventoryP80,000

SalesP190,000

Sales Returns and Allowances20,000

Purchases60,000

Purchases Discounts3,000

Transportation-ln1,000

The merchandise inventory on Dec. 31 is P74,000 Required:

1.Prepare the adjusting entry needed for merchandise inventory.

2.Prepare the partial income statement