PROBLEM 1

1. The statement of Financial data of Nile's Department Store is given below:

Current Assets:

Cash P140,000

Accounts Receivable 110,000

Notes receivable 15,000

Merchandise Inventory 230,000

Prepaid Expenses 12,000

Total P507,000

Current Liabilities:

Accounts Payable P 90,000

Accrued Expenses 40,000

Total P130,000

Required ;

1. Determine the Following:

a. Working capital

b. Current ratio

c. Acid test ratio

2. Interpret the determined current and acid test ratio.

2. The following data were gathered from the records of Ulai Enterprises:

Inventories:

Beginning P80,000

Ending 60,000

Sales:

Credit P200,000

Cash Sales 50,000

Cost of Sales 210,000

Accounts Receivable:

Beginning P30,000

Ending 70,000

Assume 365 days in a year.

Required: Compute the following:

a. Receivable Turn - Over

b. Average Collection Period

c. Inventory Turn Over

d. Average Age of Inventory

3.The following are the selected date of Ahava Corporation for the years ended December 31,2018 and 2019. 2018 2019

2018 2019

Sales (All in account) P 1,400,000 P1,100,000

Cost of Sales 850,000 780,000

Average Inventory during the year 210,000 195,000

Average Receivable during the year 290,000 190,000

Average Investment during the year 1,200,000 1,500.000

Operating Expenses (distribution & Admin) 250,000 300,000

Required:

1. Compute the following for 2018 and 2019.

a. Gross Profit Percentage

b. Rate of Return on Sales

c. Rate of Return on Investment (ROI)

d. Inventory Turn Over

e. Accounts Receivable Turnover

PROBLEM 2

2. the journal entry for the transaction (debit-credit format) to record the above transactions.

The King Monarch Co. is a wholesaler of office and school supplies.

The following are the transactions of The King Monarch Co. for the first month of its operations.

All cash disbursements are made by bank check.

Date Transaction Amount | Business/Bank forms Journal Journal Entry July,01 Kim Go-eun made initial contribution to the business by depositing money in the company's bank account. P200,000 | Deposit Slip Cash Receipts Dr. Cash 200,D00 Cr. Dy, Capital 200,000 July,01 Purchased laptop from Computer shop Inc. for office use. Payment term: COD (Cash on Delivery). P45,000 July,02 Paid advance rental for 6 months. 30,000 July,04 Received 200 reams of band papers (inventory) ordered from Jude Corp. Payment terms: 2/10, n/30. 25,000 O July,07 Delivered150 reams of bond papers to Aurora Company. Payment terms: 2/10, n/20. Cost of 41,250 merchandise was P18,750. July,08 Paid the July 4 purchases 24,500 July,15 Paid salary of employee 7,000 July,16 Received payment from the July 7 sales. 40,425 July,18 Sold 20 reams of band papers to Audrey Company. Audrey picked up the merchandise from the store. 5,500 Payment term: 15 days. Cost of merchandise was July,19 Received 10 boxes of ballpoint pens from Mickey Inc. Payment terms: COD 25,000 July,22 Over the counter sale of 4 boxes of ballpoint pens to Happy Company. Payment term: Cash Cost of 22,000 merchandise was P 10,000July 31Over the counter cash withdrawal by 10,000 the owner Rachel Dy, for her personal expenses.July 23 Received 10 calculators from Plusminus Corporation. Payment terms: 30 days. 3,000 July,24 Sold 6 calculators to Joel Company. Joel picked up the merchandise from the store. Payment Term: 15 3,960 days. Cost of merchandise was P1,800 July 25 Paid electricity bill. 7,400 July 26 Received 2 defective calculators from Joel Company. Cost of defective calculators is P 600 1,320