After its initial month of operations in December 2021, the following is the trial balance of Tindahan Natin, a merchandising business owned by Em Cruz: Debits Credits P 346,000 100,000 50,000 90,000 Cash Accounts Receivable Inventory Store Equipment Accounts Payable Em Cruz, Capital Em Cruz, Drawing Sales Sales Returns and Allowances Sales Discounts Purchases Purchase Returns and Allowances Purchase Discounts P 20,000 500,000 30,000 542,000 15,000 12,000 260,000 5,000 3,000 Freight-in Utilities Expense Salary Expense Taxes and Licenses 15,000 30,000 60,000 30,000 12,000 20,000 Freight-out Miscellaneous Expenses Totals P1,070,000 P1,070,000 Additional information: 1. The inventory of P50,000 in the trial balance was the inventory at the beginning of the month. The inventory at the end of the month is P60,000. 2. The store equipment was purchased on December 1, 2021, and it has a useful life of four years. 3. Salaries still unpaid at the end of the month is P10,000. 4. It is estimated that 2% of accounts receivable will be uncollectible. REQUIRED 1. Prepare the Income Statement. 2. Prepare the Statement of Financial Position using the account form.

After its initial month of operations in December 2021, the following is the trial balance of Tindahan Natin, a merchandising business owned by Em Cruz: Debits Credits P 346,000 100,000 50,000 90,000 Cash Accounts Receivable Inventory Store Equipment Accounts Payable Em Cruz, Capital Em Cruz, Drawing Sales Sales Returns and Allowances Sales Discounts Purchases Purchase Returns and Allowances Purchase Discounts P 20,000 500,000 30,000 542,000 15,000 12,000 260,000 5,000 3,000 Freight-in Utilities Expense Salary Expense Taxes and Licenses 15,000 30,000 60,000 30,000 12,000 20,000 Freight-out Miscellaneous Expenses Totals P1,070,000 P1,070,000 Additional information: 1. The inventory of P50,000 in the trial balance was the inventory at the beginning of the month. The inventory at the end of the month is P60,000. 2. The store equipment was purchased on December 1, 2021, and it has a useful life of four years. 3. Salaries still unpaid at the end of the month is P10,000. 4. It is estimated that 2% of accounts receivable will be uncollectible. REQUIRED 1. Prepare the Income Statement. 2. Prepare the Statement of Financial Position using the account form.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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