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    Accounting Chapter 5

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    Joy Pacot
    The document discusses journalizing transactions for a business called Car Tech Center owned by Mr. Detoya. It provides details of various transactions from February 1-28 including initial investment, purchases, sales, expenses and bank transactions. Special journals are introduced which record specific transactions like sales, purchases, cash receipts and payments to divide the bookkeeping work.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Accounting Chapter 5

    Uploaded by

    Joy Pacot
    196 views42 pages
    The document discusses journalizing transactions for a business called Car Tech Center owned by Mr. Detoya. It provides details of various transactions from February 1-28 including initial investment, purchases, sales, expenses and bank transactions. Special journals are introduced which record specific transactions like sales, purchases, cash receipts and payments to divide the bookkeeping work.

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    Accounting-Chapter-5

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    The document discusses journalizing transactions for a business called Car Tech Center owned by Mr. Detoya. It provides details of various transactions from February 1-28 including initial investment, purchases, sales, expenses and bank transactions. Special journals are introduced which record specific transactions like sales, purchases, cash receipts and payments to divide the bookkeeping work.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    196 views42 pages

    Accounting Chapter 5

    Uploaded by

    Joy Pacot
    The document discusses journalizing transactions for a business called Car Tech Center owned by Mr. Detoya. It provides details of various transactions from February 1-28 including initial investment, purchases, sales, expenses and bank transactions. Special journals are introduced which record specific transactions like sales, purchases, cash receipts and payments to divide the bookkeeping work.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 42

    Journalizing

    Transactions
    CHAPTER 5
    Initial Investment
    Feb. 1. Mr. E. Detoya open an current account with Philippines
    National Bank in the amount of 1,000,000 and Merchandise worth
    of 45,000to start with his business.

    (At this part, An entity Car Tech Center was created separate and
    distinct form the owner , Mr. Detoya)

    Cash in bank 1,000,000


    Merchandise inventory. 45,000
    E. Detoya ,capital. 1,045,000
    Purchase of transportation equipment for
    cash
    Feb. 1 Bought a second hand service vehicle for cash from Mr.
    Cedrick Vel Naranjo For 700,000 and issued check No. 4852 with
    cover by check Voucher No. 001

    Transportation Equipment. 700,000


    Cash in bank. 700,000

    Service Vehicle for Cash


    Barrowed Money From a Bank
    Feb.1. Obtained a bank loan From PNB In the amount of
    500,000 at the rate of 5% per Annum and interest is deducted to in
    advance For 1year of 80,000 . Official receipt No. 0001 was issued .

    Cash in bank 420,000


    Prepaid Interest. 80,000
    Notes payable. 500,000

    Bank loan
    Purchase of store supplies on account

    Feb. 2. Purchased various supplies on account Account to Gaisano


    Metro, 10,000 as per charge sales invoice No. 05913

    Store Supplies inventory 10,000


    Accounts Payable 10,000

    Store Supplies on account


    Purchase of Merchandise on account

    Feb. 3 Purchased Merchandise on account ,180,000 plus 12% Vat


    from Manila car corporation as per charge invoice No. 08432 .
    Term 2/10,n/30

    Purchases. 180,000
    Input Tax. 21,600
    Accounts Payable 201,600

    Merchandise purchase on credit


    Rendered installation Service

    Feb. 4. Received cash of , 16 800 From Rosemarie Jacalan for


    the installation of a car accessory Including Vat 12%.Issued an
    Cash sales Invoice No 001

    Cash in bank 16,800


    Installation Income. 15,000
    OuPut tax 1,800

    Installation service for car


    Freight on Merchandise Purchase (freight
    in )
    Feb 5. Paid 5000 on Air 21 Express for the freight of merchandise
    purchased From manila Car Corporation Issued check No. 48562
    Check Voucher No. 002

    Freight in 5000
    Cash in bank. 5000

    Freight for Merchandise purchase


    Purchase of merchandise of cash
    Feb.5 Purchase merchandise for Cash 200,000 plus 12%0VAT
    From Everlast Car Co. Issued check No. 48503 with covering
    check Voucher No.003

    Purchases 200,000
    Input Tax 24,000
    Cash In Bank. 224,000
    Purchase merchandise for Cash
    Return of Merchandise purchase in cash

    Feb. 6. Returned Merchandise purchase From Everlast Car Co.


    for not confirming with the order 6,500plus 12% Vat .Issued
    official receipt No. 0002 for the refund

    Cash in bank 7,280


    Purchase Return and allowances. 6,500
    output Tax. 780

    Refund for Merchandise Returned


    Merchandise for Cash
    Feb. 6 Sold merchandise for Cash P140,000 to Davao Carplys
    corporation lpus 12% VAT as per Cash sales invoice No. 002

    Cash in bank 156,800


    Sales. 140,000
    Output tax. 16800
    Merchandise Sold for cash

    Sol.
    140,000*12%=16,800

    140,000+16,800=156,800
    Freight on Merchandise Sold

    Feb.6 Freight paid to LBC express ,P3920for


    merchandise shipped to Davao Carplys Corporation
    issued check No. 48504 with covering voucher No. 004.

    Freight out. 3,920


    Cash in Bank. 3920
    Freight out of sold merchandise
    Received , Returned Merchandise Sold for cash

    Feb.10. Returned of merchandise worth P8960 from Davao


    corporation including 12%VAT for not confirming with the order

    Sales Return and Allowancsales. 8000


    Out put Tax 960
    Cash in bank. 8960

    To record sales Return

    Sol. 8000*12%=960

    8000+960=8960
    Full payment of Account

    Feb. 11. Full payment of account with manila car corporation and avail 2%
    discount,197,568. Issued check No. 48506 with covering check Voucher No. 006

    Accounts payable. 201,600


    Purchase Discounts. 3,600
    Input Tax. 432
    Cash in bank. 197,568

    Payment of account on the Discount Period

    Sol. 180,000*2%=3600 PD
    3,600*12%=432 IT
    Payment of Taxes and Licenses

    Feb 12. Paid business and taxes and licenses to the city
    Government of 15,000

    Taxes and Licenses. 15,000


    Cash in bank. 15,000
    . Payment of Taxes and Licenses
    Sold merchandise on account
    Feb. 14. Sold merchandise on account to Mega Plus. Corporation
    amounting to 250,000plus 12% VAT charge sales invoice No.001 terms:
    2/10,n/30

    Accounts Receivable. 280,000


    Sales 250,000
    Output Tax. 30,000

    Merchandise sold on account

    Sol.
    250,000*12%=30,000 OT
    30,000+250,000=280,000 AR
    Hiring of an accountant

    Feb.15. Mr.detoya hired Mrs. Ruby Kudemus,CPA at the rate of


    25,000
    Per month.

    No entry
    Sold merchandise on account

    Feb.18. Sold merchandise to Ultra Corporation amounting to


    210,000 plus 12% VAT per charge sales invoice No. 002.Terms: 2/10,n/30

    Accounts Receivable. 235,200


    Sales 210,000
    Output Tax . 25,200

    Sol.
    210,000*12%=25,200 OT
    25,200+210,000=235,200 AR
    Full Collection of Account
    Feb.23. Received cash in the amount of 274,000 from Mega Plus
    Corporation in full payment of it’s account after availling of a 2%
    discount of 5000. Issued official receipt No. 0004

    Cash in bank. 274,400


    Sales Discount. 5000
    Output Tax. 600
    Accounts Receivable 280,000

    Collection on account in full payment


    Rendered Installation of service
    Feb 24. Received cash of 22400 from Mr. Melchor
    Bombeo for the installation of a car accessory which
    included the012% VAT. Issued cash sales invoice No. 002

    Cash in bank. 22,400


    Installation Income. 20,000
    Output tax. 2,400

    Installation Income received


    Payment of Rental
    Feb.27. Paid rental of the building owned by Edulan
    Realty amounting to 30,000 Issued check No.48508 with
    covering check Voucher No. 008

    Rent expense. 30,000


    Cash in bank. 30,000

    Payment for the month (of rent)


    Sold Merchandise on account
    Feb. 27 SoId merchandise on account to GO cars Inc.
    Amounting to 302,000 plus 12% VAT as per charge sales invoice
    No. 003 terms in 45 day.

    Accounts Receivable 338,240


    Sales 302,000
    Output Tax 36,240

    Sold Merchandise on account


    Partial Collection of account
    Feb. 28. Received cash of 130,000 representing partial
    collection of account from GO Cars ,Inc. Issued official
    receipt No. 0004

    Cash in bank. 130,000


    Accounts Receivable 130,000

    . Partial Collection from a customer


    Purchase of merchandise on account

    Feb.28. Purchases on account costing 295,000 from Ace Car


    Care
    Corporation plus 12% VAT as per charge sales Invoice No. 69250

    Purchases. 295,000
    Input Tax. 35,400
    Accounts Payable. 330,400

    Merchandise purchased on account


    Withdrawal by the Owner
    Feb. 28. Issued check No. 48509 with covering voucher No. 009
    to Mr. Edgar Detoya representing withdrawal form his caputal
    investment 30,000

    E. Detoya , Drawing 30,000


    Cash in bank. 30,000

    Withdrawal by the owner


    Payment of salaries and wages
    Feb. 28. Paid salaries and wages to employees for the
    month 50,000. Issued check No. 48510 with covering
    check Voucher No. 010 .Payee is Dianee Guitierrez.

    Salaries and wages 50,000


    Cash in bank 50,000

    Salaries for the month


    Closing of out put and input tax
    Feb.28. Closing of input Ang output Tax to Vat Payable
    with form part of regular accounting entry.

    Vat output. 110,880


    Vat input. 79,788
    Vat Payable. 31,092

    To close Vat output to Vat input


    Special Journals

    The use of a General Journal as a book of original entry was over emphasized. As illustrated, the General Journal
    Book will become voluminous and unwieldy because of the number of transactions recorded daily. Aside from this,
    only one person can have the knowledge and control of the transactions because only one person can be given task
    to do the recording in the General Journal.

    When special journals are used, however, there can be division of bookkeeping works because each book or journal
    can record a specific transaction and therefore, one person can be assigned to do the recording in the Cash Reciepts
    Journal, the other can be assigned to handle the Cash Disbursement Journal, the Purchases Journal, Sales Journal
    and so on and so forth.
    Uses of Special Journals

    Sales Journal – only transactions involving sales of merchandise on account or on credit terms are recorded in this
    book. The pro-forma entry is :

    Account receivables Pxx


    sales Pxx
    Output Tax xx

    Purchases Journal – only transactions involving purchases of merchandise on account or on credit terms are
    recorded in this book. The po-forma is :

    Purchases Pxx
    Input Tax xx
    Accounts Payable Pxx
    Cash Receipts Journal – only transactions involving receipts of cash are recorded in this book such as, sale of
    merchandise in cash, collection from customer’s account, investment of the owner in terms of cash, cash received
    from the bank loa, refund from supplier for return of merchandise purchased in cash, etc. The pro-forma journal
    entry is :

    Cash Pxx
    Various credits( as mentioned above) Pxx

    Cash received from sale of merchandise:


    (Pro-forma Journal Entry)

    Cash Pxx
    Sales Pxx
    Output Tax xx
    Cash received from refund for merchandise return to supplier:

    (Pro-forma Journal Entry)

    Cash Pxx
    Purchase Returns & Allow Pxx
    Input Tax xx

    Cash received as collections with a discount


    (Pro-forma Journal Entry)

    Cash Pxx
    Sales Discount xx
    Output Tax xx
    Accounts Receivable Pxx
    Cash Disbursements Journal – only transactions involving cash payments are recorded in this book such as,
    purchases of merchandise in cash, payments of suppliers’ accounts, owner’s withdrawal in cash, cash refund to
    customers whose merchandise purchased in cash was returned, cash payment of fixed assets, payments of expences,
    etc. The pro-forma entry is:

    Various debits (as mentioned above) Pxx


    Cash Pxx

    Purchase of merchandise in cash:


    (Pro-forma Journal Entry)

    Purchases Pxx
    Input Tax xx
    Cash Pxx
    Payment of merchandise on account with a discount:
    (Pro-forma Journal Entry)

    Accounts Payable Pxx


    Purchase Discounts Pxx
    Input Tax xx
    Cash xx

    Refund to a customer for merchandise returned:


    (Pro-forma Journal Entry)

    Sales Returns and Allowances Pxx


    Output Tax xx
    Cash Pxx
    General Journal – Even Special Journal are used, a General Journal will still be used but it is limited to recording of
    transaction which cannot be recorded in the above metioned books. Examples of transactions that are recorded in the
    General Journal are as follows:

    1. Original investment of the owner


    2. Return of merchandise by bought on account
    3. Return of merchandise by a customer that were sold on account
    4. Adjusting and correcting journal entries
    5. Closing and Reversing Entries

    The rules of debit and credit are being observed in the recording of transactions on these special journals.

    The transactions of Cebu Car - Tech Center are recorded in the special joirnals as follows:

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