Problem
PC EXPRESS was a retail store for personal computers, laptops and other computer hardware. The company was opened in early September by Perry E. Cortez, a young man previously employed in computer sales specializing in business computers.
Cortez hired Carlo Cris Cruz to set up her bookkeeping and accounting system and recorded the preopening financial transactions as follows:
Investment of Cortez in cash for P650,000 and acquired bank loan for P1,000,000 at a rate of 15% payable in one year.
The company paid the rent for September, P14,850
Purchase goods on account, P1,375,000
Acquired Furniture and Fixtures in cash, P155,000. Cortez estimated that the asset's useful life is 10 years.
Cortez advertised his business and paid P13,200.
Cortez hired an office staff and paid P9,350.
Bought office supplies in cash P11,000. This was fully utilized for the month of September.
The company also paid utilities of P2,750.
At the end of September, Cortez had the following transactions.
Cash sales for September, P380,000.
Credit sales for September, P148,500.
Cash received from credit customers, P36,140.
Payment to merchandise suppliers, P961,950.
New merchandise purchased from credit suppliers, P499,400.
Mr. Cortez ascertained that the cost of goods sold was P381,400.
Salaries paid, P6,880.
Wages earned by employees by unpaid at the end of September, P4,400.
Rent paid for October, P14,850.
Insurance paid for one year effective September 1, P23,100.
Bills received from Meralco but unpaid, P2,260.
Purchased signs and billboards, paying P6,600 and agreeing to pay the P11,000 balance by December 1. The signs was also capitalized and recorded as part of Furniture and Fixtures and allocated the cost for 10 years.
Required:
Analyze and journalize the transactions
Set-up T accounts and determine the balances as at September.
Consider any other transactions that should be considered. Journalize and post to the T accounts
Prepare Income Statement for one-month period ending September.
Prepare Statement of Financial Position as at September.