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On June 1, 2014, DM Company, a printing, publishing, and distribution company was established by Mr. Tan.
the month of June, the following transactions were completed:
6/1 Tan invested the following to his business: Cash of P1,100,000;
6/2 Bought desks, tables, and chairs costing P200,000; Copiers, printers, and machines costing P400,000 all in c
6/3 Tan bought additional chairs and tables from SL Ruiz on account for P12,
6/5 Bought various office supplies from Paperworld by paying P20,500 in cash
6/8 Paid for 1 year insurance for the office building for P20,
6/10 Rendered printing services to UPVTC on account for P50,
6/11 Paid ½ of the account owed to SL Ruiz in cash
6/15 Paid salaries of workers amounting to P20,
6/18 Ordered additional equipment from Five Star Co. by paying ½ of the cost in cash for P20,
6/20 Borrowed P500,000 from BDO payable in 1 year by issuing a promissory note
6/22 Received and paid the electric bill from LEYECO P10,
6/23 Collected 1/3 of the account owed by UPVTC to DM Company
6/25 Tan’s wife wanted to buy an LV handbag so he withdrew P80,000 from DM Company for personal use
6/26 Paid for the remaining balance of the account owed to SL Ruiz
6/28 Paid for advertising to Leyte-Samar Daily Express amounting to P2,
6/29 Paid for the current month’s rent for P20,
6/30 Received payment of the remaining balance owed by UPVTC
Requirement: Prepare the journal entries for the above transactions.
Jan 2: Mr. A borrowed P500,000 from the bank. He in turn deposited it in the account of Good Spasm, a massage
organizing today.
Jan 2: Signed a contract to rent a building. A deposit refundable at the end of a contract term equivalent to two m
paid. Also, advance rent for three months was paid. Also, advance rent for three months was paid. Monthly rent w
P15,000.
Jan 4: Purchased some massage equipment worth P250, 000 for use in the business. As payment, he used cash
been keeping in his house.
Jan 5: Purchased on credit massage supplies worth P50,000 for use in the business.
Jan 6: Hired five employees today. Three would serve as masseuses and will be paid P18,000/month. One was h
receptionist and will be paid P12,000/month. The fifth was hired as security guard and will receive P10,000/month
pesos to the person who helped find these workers.
Jan 7: Placed an ad on TV to promote the business. Contract price was P25,000 (to be paid by February 1) for TV
running daily starting today until the end of February.
Jan 8: Grand opening today. As promo, the first fifty customers were given massage services at 50% off. Regular
P120/hour. 150 clients came today and were all given 1-hour massage services. All paid cash.
Jan 9: Eighty clients came today and were given massage services at the regular rate of P120/hour. Half paid in c
1.5 hours massage) while the other half (all given 2 hours massage) paid 50% of their bill and the balance payab
Jan 15: Paid P38,000 as half month salary to employees. 10% was withheld for income tax.
Jan 15: Rendered massage services to 75 clients at P120/hour. 25% were given 2 hours of massage and the rem
had 1 hour of massage. All were on credit.
Jan 16: 50% of the on credit clients from Jan 9 settled their accounts today.
Requirement: Prepare the journal entries for the above transactions.
You were given the following transactions of Padala Tacloban Branch for 2014:
Jan 1 Mr. X, the owner, made the following investments: Cash (P900,000), Building (cost was P
Land (with cost of P250,000 and appraised value of P900,000).
Jan 2 Purchased delivery truck (take up as Delivery Vehicles) worth P440,000. There was a 10% d
January 2, 2015 at 12% annual interest. Freight cost for the truck paid by Padala was P10,
Jan 3 Paid building insurance premiums for the entire year, P13,200.
Feb 12 Purchased supplies for cash, P30,000.
Mar 15 Received P120,000 for delivery services to be rendered starting June 2014.
Apr 30 Paid a total of P76,800 to employees. This represented their salaries for the first half of the y
paid every 30th^ of the month.
Jul 1 Paid the electricity bill for Jan-June, P13,500.
Aug 18 A client paid a total of P25,000 for delivery services rendered today.
Sept 20 Earned a total P219,500 for services during the day. All were on credit.
Oct 21 Purchased supplies on credit for P2,000.
Nov 23 Mr. X withdrew P5,000 worth of supplies for his personal use. He doesn’t intend to replace th
Dec 25 Collected half of the receivable from Sep 20.
Journal Entries: 1-Jun Cash 1,100, Tan, Capital 1,100, 2-Jun Furnitures & Fixtures 200, Office Equipment 400, Cash 3-Jun Furnitures & Fixtures 12, A/P 5-Jun Office Supplies 20, Cash 8-Jun Prepaid Insurance 20, Cash 10-Jun A/R 50, Service Revenue 50, 11-Jun A/P 6, Cash 6, 15-Jun Salaries Exp 20, Cash 20, Trial Balance: Cash 845,500. Office Suplies 20,500. Prepaid Insurance 20,000. Furnitures & Fixtures 212,000. Office Equipment 440,000. A/P N/P Tan, Capital Tan, Withdrawals 80,000. Service Revenue Salaries Exp 20,000. Utilities Exp 10,000. Advertising Exp 2,000. Rent Exp 20,000.
was established by Mr. Tan. During
hines costing P400,000 all in cash
ash for P20,
e
ompany for personal use
Total 1,670,000. 2-Jan Cash 500, A, Capital 500, Ref. Deposit 30000 Prep. Rent 45000 Cash 75000 4-Jan Equipment 250, A, Capital 250, 5-Jan Supplies 50, A/P 50, Jan-16 Misc. Exp 5, Cash 5, 7-Jan Advertising Exp 25, A/P 25, 8-Jan Cash 15000 Discount 3000 Service Rev 18000 9-Jan Cash 12000 A/R 4800 Service Rev 16800 15-Jan Salaries Exp 25,333. Prep. Salaries 12,666. Withholding Taxes Paayable 3800 Cash 34,200. A/R 11250 Service Revenue 11250 16-Jan Cash 2400 A/R 2400 Basic J/Es: 1-Jan Cash Bldg Land X, Capital 2-Jan Delivery Truck Cash N/P 3-Jan Prep. Insurance Cash
nt of Good Spasm, a massage business he is
ract term equivalent to two months’ rent was
nths was paid. Monthly rent was set at
ss. As payment, he used cash that he had
s.
id P18,000/month. One was hired as
nd will receive P10,000/month. Paid P5,00 0
be paid by February 1) for TV ad spots
e services at 50% off. Regular rate is
paid cash.
te of P120/hour. Half paid in cash (all given
eir bill and the balance payable next month.
ome tax.
hours of massage and the remaining clients all
0), Building (cost was P700,000 and market value is P850,000) and
40,000. There was a 10% downpayment and the balance payable on
paid by Padala was P10,000.
une 2014.
ies for the first half of the year. The employees a re supposed to be
ay.
redit.
doesn’t intend to replace the supplies he got.
Cash
Adjusting J/Es: 900,000.00 1.) Interest Exp 47,520. 850,000.00 Interest Pay. 900,000. 2,650,000.00 2.) Insurance Exp 13,200. Prep. Insurance 450,000. 54,000.00 3.)^ Sup. Exp 22,200. 396,000.00 Supplies 13,200.00 4.)^ Unearned Service Rev. 96,000. 13,200.00 Service Revenue
- 18-Jun Office Equipment 40, - 20-Jun Cash 500, A/P - 600,000 Note Payable 500, - 22-Jun Utilities Expense 10, - 23-Jun Cash 16666. 12,000 Cash - 20,500 A/R 16666. - 25-Jun Tan, Withdrawals 80, - 26-Jun A/P 6, 20,000 Cash - Cash 6, - 28-Jun Advertising Exp 2, - 29-Jun Rent Exp 20, Cash - Cash 20, - 30-Jun Cash 33,333. - A/R 33,333. - 20,000.
- 500,000.
- 1,100,000. - 50,000. - 30,000.00 5.) Salaries Exp 102,400.
- Unearned Service Rev. 120,000. 120,000.00 Salaries Pay. - 6.) Utilities Expense 11,200. - 25,600. 51,200.00 Utilities Payable - 76,800.00 7.) Bad Debts Expense 21,025. - 13,500. Allowance for Bad Debts - 13,500.00 8.) Depreciation Exp 103,750. - 25,000. Accum. Dep.
- Service Rev. 25,000.
- Service Rev. 219,500. - 2,000. - 2,000. - 5,000. - 5,000. - 109,750. - 109,750. - 80,000.
- Service Rev. 80,000. - 2,800. - 2,800.
- 20,
- 20,
- 10,
- 80,
- 2,
- Cash 964,450. Unadjusted Trial Balance
- 47,520.00 Bldg 850,000.
- Land 900,000.
- Delivery Truck 450,000.
- 13,200.00 Prep. Insurance 13,200.
- Supplies 27,000.
- Prep. Salaries 25,600.
- 22,200.00 A/R 189,750.
- 96,000.00 Unearned Service Revenue 120,000. - X, Capital 2,650,000. - X, Withdrawals 5,000.
- 25,600.00 Service Revenue 324,500.
- 50,800.00 Tax Expense 2,800.
- 26,000.00 Utilities Expense 13,500.
- 11,200.
- 21,025.
- 103,750.
- Cash 913,650. Adjusted Trial Balance
- Bldg 850,000.
- Acc. Dep. - Bldg 103,750.
- Land 900,000.
- Delivery Truck 450,000.
- Supplies 4,800.
- A/R 189,750.
- Allowance for Bad Debts 21,025.
- N/P 396,000.
- A/P 2,000.
- Interest Payable 47,520.
- Salaries Payable 26,000.
- Utilities Payable 11,200.
- Unearned Service Revenue 24,000.
- X, Capital 2,650,000.
- X, Withdrawals 5,000.
- Service Revenue 420,500.
- Tax Expense 2,800.
- Utilities Expense 24,700.
- Salaries Expense 153,600.
- Insurance Expense 13,200.
- Interest Expense 47,520.
- Supplies Exp 22,200.
- Bad Debts Expense 21,025.
- Depreciation Expense 103,750.
