MERCHANDISING BUSINESS

STATEMENT OF FINANCIAL PERFORMCE STATEMENT OF COST OF GOOD SOLD

Company’s Name CLOSING ENTRIES
Statement of Financial Performance Merch. Inventory, Beg xxx Merchandise. Inventory, end
For the month/year ended “Date” Add: Net Cost of Purchases xxx Sales Close temporary
Goods Available for sale xxx Purchases Rets. & Allowances accounts with
credit balances
Net Sales Less: Merch. Inventory, end (xxx) Purchase Discounts
Gross Sales Cost of Goods Solds xxx Income Summary
Less: Sales Returns & Allowances
Sales Discount Income Summary
Cost of Sales Merc. Inv., Beg.
Merchandise Inventory, Beginning STATEMENT OF FINANCIAL POSITION Sales Rets. & Allow.
Purchases Company’s Name Sales Discounts.
Less: Purchases. Rets & Allow Statement of Financial Position Purchases
Purchases Discount For the month/year ended “Date” Transpo. In.
Net Purchases ASSETS All expenses
Transport In Currents Assets (Including
Net Cost of Purchases Ex. Cash xxx Transpo. Out)
Goods Available for Sale Supplies xxx
Less: Merchandise Inventory, Ending Total Current Assets xxx
Cost of sales Non-Current Assets Income Summary (Close Income Summary Account)
Gross Profit (Sum of net sales and cost of sales) Ex. Land xxx Capital
Operating Expenses Building xxx Capital (Close Withdrawal Account)
* Less: Accum. Dep (xxx) Withdrawal
* Office Equipment xxx
Total Operating Expenses Less: Accum. Dep (xxx) A. To close manufacturing account with credit
Operating Profit TOTAL ASSETS xxx balances, and to recorded ending inventory for
(Diff. between GP and total OPEX) LIABILITIES materials and work in process:
Finance Cost Current Liabilities
(Should be lessen in operating profit) * xxx Raw Materials Inventory, end xx
Profit * xxx Work in Process Inventory xx
Non-Current Liabilities Purchases Rets. & Allow. xx
STATEMENT OF CHANGES IN EQUITY * xxx Purchase Discounts xx
Company’s Name * xxx Manufacturing Summary xx
Statement of Changes in Equity Total Liabilities xxx
For the month/year ended “Date” OWNERS EQUITY
Owner’s Equity xxx
Owners’ Equity, Date, Beginning Pxxx Capital, end of the year xxx
Add: Profit (xxx) Total Liabilities and Owner’s Equity xxx
Total xxx
Less: Loss (xxx)
Less: Withdrawals xxx
Owner’s Equity, Date, Ending ____
 STATEMENT OF COST GOOD Total cost Manufactured = Net Purchases + Freight In
B. To close Manufacturing accounts with debit MANUFACTURED Gross Profit – Profit after deducting original cost
balances: Net Sales = Gross Sales – SRA – SD
Manufacturing Summary xx Direct Material Used
Net Profit = Gross Profit – Operating Expense
Raw Materials Inventory, beg xx Raw Mats. Inv., Beg.
Purchases-Raw Materials xx Add: Net Cost of Purchases
TransportationIn xx Purchases-Raw Materials
Direct Labor xx Less: Purch. Rets & Allow
Indirect Labor xx Purchases Discounts
Indirect Materials xx Net Purchases PARTNERSHIP
Dep. Exp. – Factory Bldg. xx Add: Trasnpo. In
Rep. Maint. – Factory Bldg. xx Raw Mats, Available for use BOOK OF PARTNERS,
Amortization of Patents xx Less: Raw Materials Inventory, end  Adjust the asset and liability (Yung pinakahead
Real Property Taxes xx Direct Labor ng partnership) in accordance to the agreement.
Factory Utilities xx Manufacturing Overhead Adjustments are to be made to the head of the
Tools Used xx Indirect Labor partnership capital account.
Lahat ng  Close the books.
Employer’s Payroll Contr.- Factory xx Indirect Materials
Factory Supplies Expense xx Depreciations Expense- Factory Bldg. amount na
Miscellaneous Factory Expense xx Repairs and Maintenance- Factory Bldg. nagamit na BOOKS OF PARTNERSHIP
Amortization of Patents hindi 1. Record the investment of the head of the partnership
C. To close manufacturing summary and beginning Real Property Taxes direktang 2. Record the investment of the other partner
finished goods inventory to income summary Factory Utilities nakikita sa
Tool Used product The following rules will be helpful in make the
Income Summary xx Employer’s Payroll Cont.- Factory necessary adjusting entries:
Manufacturing Summary xx Factory Supplies Expense
Debit Debit Descriptions
Finished Goods Inv., beg xx Miscellaneous Expense
Total Manufacturing Costs Asset Capital For increases in asset value
The debit balance in the manufacturing summary Add: Work in Process, Beg. Capital Asset For decreases in asset value
represents the cost of goods manufactured. Total Cost of Goods Placed in Process Capital Liabilities For increases in liability bal.
Less: Work in Process, end Liabilities Capital For decreases in liability bal.
D. To establish the ending finished goods inventory Cost of Goods Manufactured

Finished Goods Inventory, beg xx STATEMENTS OF COST GOOD In case of contra asset accounts, the following rules shall
Income Summary xx MANUFACTURED apply
.Dr. – Contra asset account
The other closing entries after this procedure are Finished Goods Inventory, Beginning xxx Cr. – Capital
the same as those for a merchandising entity. Add: COG Manufactured xxx Des. – For increase in asset values
Goods available for sale xxx .Dr. – Capital
Less: Finished Goods, Inventory, end (xxx)
.Cr. – Contra asset account
Cost of Good sold xxx