Transactions with the corresponding journal entries

1. 2011
June 1 Mr. Edgar Detoya opened a bank current account with Land Bank of the Philippines in the
amount of P1,000,000 and invested merchandise inventory valued at P45,000 to start with his business.
GJ
Cash in Bank 1,000,000
Merchandise Inventory 45,000
E. Detoya, Capital 1,045,000
Initial Investment
June 15 Purchased store furniture and fixtures for cash from Ayala de Cebu costing P150,000 plus VAT of
12%. Issued Check No. 48501 covered by Check Voucher No. 001.
CDJ
Store Furniture and Fixtures 150,000
Input Tax 18,000
Cash In Bank 168,000
Store Furniture and Fixtures purchased for cash
July 4 Obtained a bank loan in the amount of P500,000 through a bank credit memo. The principal
amount of the loan was P500,000 less interest and bank charges deducted in advance for one year,
P420,000. Official Receipt No. 0001 was issued.
CRJ
Cash In Bank 420,000
Prepaid Interest 80,000
Notes Payable 500,000
Borrowed money from Land Bank of the Phils.
July 26 Purchased various store supplies on account from Gaisano Metro, P 10,000 as per Charged Sales
Invoice No. 05913. VAT is 12%.
GJ
Store Supplies Inventory 10,000
Input Tax 1,200
Accounts Payable 11,200
Purchased store supplies on account
Aug. 8 Purchased merchandise on account, P180,000 plus 12% VAT from Manila Car Corp. as per
Charged Invoice No. 08432. Terms: 2/10, n/30
PJ
Purchases 180,000
Input Tax 21,600
Accounts Payable 201,600
Merchandise purchased on credit

2. Aug 30 Received cash of P 16,800 from Severo Santos for the installation of a car accessory including
VAT of 12%. Issued an Official Receipt No. 0002.
CRJ
Cash In Bank 16,800
Installation Income 15,000
Output Tax 1,800
Installation service for cash
Sept. 15 Paid P 5,600 including VAT of 12% to Air 21 Express for the freight of merchandise purchased
from Manila Car Corporation. Issued Check No. 48502 with covering Check Voucher No. 002.
CDJ
Freight-in 5,000
Input Tax 600
Cash In Bank 5,600
Payment of freight to customers
Sept 21 Purchased merchandise for cash P200,000 plus 12% VAT from Everlast Car Accessories. Issued
Check No. 48503 with covering Check Voucher No. 003.
CDJ
Purchases 200,000
Input Tax 24,000
Cash In Bank 224,000
Purchase of merchandise for cash
Oct 10 Return of merchandise purchased from Everlast Car Accessories for not confirming with the
order, P 6,500 plus 12% VAT. Issued Official RECEIPT No. 0003 for the refund.
CRJ
Cash In Bank 7,280
Purchase Returns and Allowances 6,500
Input Tax 780
Refund for merchandise returned
Oct 20 Sold merchandise for cash, P140,000 to Davao Carplus Co. plus 12% VAT as per Cash Sales Invoice
No. 001.
CRJ
Cash In Bank 156,800
Sales 140,000
Output Tax 16,800
Merchandise sold for cash
Nov. 5 Freight paid to LBC Express, P3,920 for merchandise shipped to Davao Carplus Co. with 12% VAT
included. Issued Check No. 48504 with covering Check Voucher No. 004.
CDJ

3. Freight-out 3,500
Input Tax 420
Cash In Bank 3,920
Freight Out of merchandise sold
Nov 18 Return of merchandise worth P8, 960 from Davao Carplus Co. including 12% VAT for not
conforming with the order. This was being refunded by Check No. 48505 with covering Check Voucher
No. 005
CDJ
Sales Returns and Allowances 8,000
Output Tax 960
Cash In Bank 8,960
To record sales returns.
Dec 21 Full payment of account with Manila Car Corp. and avail of the 2% discount, P197,568. Issued
Check No. 48506 with covering Check Voucher No. 006.
CDJ
Accounts Payable 201,600
Purchase Discounts 3,600
Input Tax 432
Cash In Bank 197,568
Payment of account within the discount period
Dec 23 Paid business taxes and licenses to City Government of P15,000. Issued Check No. 48507 with
covering Check Voucher No. 007.
CDJ
Taxes and Licenses 15,000
Cash in Bank 15,000
Payment of taxes and licenses
2013
Jan 10 Sold merchandise on account to Elegant Surplus Corporation amounting to P250,000 plus 12%
VAT per Charge Sales Invoice No. 0001. Terms: 2/10, n/30.
SJ
Accounts Receivable 280,000
Sales 250,000
Output Tax 30,000
Merchandise sold on account
Jan 15 Mr Edgar Detoya hired Mrs. Ruby Kudemus, CPA at the rate of P25,000 per month.
NO ENTRY

4. Feb 14 Sold merchandise on account to Cagayan Car Accessories Co. amounting to P210,000 plus 12%
VAT as per Charge Sales Invoice No. 0002. Terms: 2/10, n/30.
SJ
Accounts Receivable 235,200
Sales 210,000
Output Tax 25,200
Sales on account
Feb 28 Received cash in the amount of P274,400 from Elegant Surplus Corp. in full payment of its
account after availing of a 2% discount of P5,000. Issued Official Receipt No. 0004.
CRJ
Cash in Bank 274,400
Sales Discounts 5,000
Output Tax 600
Accounts Receivable 280,000
Full collection of account.
Mar 3 Received cash of P22,400 from Mr.MelchorBombeo for the installation of a car accessory which
included the 12% VAT. Issued an Official Receipt No. 0005.
CRJ
Cash in Bank 22,400
Installation income 20,000
Output Tax 2,400
Installation income received
Mar 16 Paid rental of the building owned by Edulan Co. amounting to P75,000 plus 12% VAT. Issued
Check No. 48508 with covering Check Voucher No. 008.
CDJ
Rent Expense 75,000
Input Tax 9,000
Cash inBank 84,000
Payment of rent for the month
Apr 2 Sold merchandise on account to Dumaguete Car Care Supply, Inc. amounting to P302,000 plus
12% VAT as per Charge Sales Invoice No. 0003. Term: 45 days.
SJ
Accounts Receivable 338,240
Sales 302,000
Output Tax 36,240
Sold merchandise on account
Apr 5 Received cash of P130,000 representing partial collection of account from Dumaguete Car Care
Supply, Inc. Issued Official Receipt No. 0006.

5. CRJ
Cash in Bank 130,000
Accounts Receivable 130,000
Partial collection from a customer
May 5 Purchased merchandise on account costing P295,000 from Bacolod Car Accessory, Inc. plus 12%
VAT as per Charge Sales Invoice No. 69250.
PJ
Purchases 295,000
Input Tax 35,400
Account Payable 330,400
Merchandise purchased on account
May 10 Issued Check No. 48509 with covering Check Voucher No. 009 to Mr. Edgar Detoya representing
withdrawal from his capital investment, P30,000.
CDJ
E. Detoya, Drawing 30,000
Cash in Bank 30,000
Withdrawal by the owner
May 29 Paid salaries and wages to employees for the month, P50,000. Issued Check No. 45810 with
covering Check Voucher No. 0010. Payee is Diane Gutierrez.
CDJ
Salaries and Wages 50,000
Cash in Bank 50,000
Salaries for the month
May 29 Set up the VAT payable by closing the VAT input to the VAT output.
GJ
Output Tax 110,880
Input Tax 109,008
VAT Payable 1,872
May 31 Set up merchandise inventory ending balance of P 350,000.
Merchandise-ending bal 350,000
Income and Summary Expense 350,000