March

2020 Debit Credit

1 Cash 140,000.00
David Laundry's Capital 140,000.00
Account Receivable 100,000.00
Revenue 100,000.00
Utilities Expense 7,000.00
Cash 7,000.00
Wages 20,000.00
Cash 20,000.00
Rent 12,000.00
Cash 12,000.00
Cash 30,000.00
Account Receivable 30,000.00
Ads Expense 10,000.00
Ads Payable 10,000.00

Total Assets 201,000.00

Total Liabilities 10,000.00
Owner's Equity 191,000.00

Total Expense 49,000.00

Total Revenue 100,000.00
Net Income 51,000.00

Owner's Equity, Jan 1 ₱ 220,000.00

Add: Additional Investment 94,000.00
Add: Net Income 308,000.00
402,000.00
Less: Drawing - 56,000.00
Increase in Owner's equity 346,000.00
Less: Total Expenses - 232,000.00
Owner's Equity, Dec 31 334,000.00

Revenues
Revenue rendred for cash 490,000.00
Revenue rendred fr accnt 160,000.00
650,000.00
Expenses
Expenses on accnt 48,000.00
Expenses on cash 140,000.00
188,000.00
Net Income ₱ 462,000.00
 Assets 670,000.00
Less: Liabilities 300,000.00
Owner's Equity 370,000

Owner's Equity 370,000.00

Add: Net Loss 20,000.00
Add: Drawing 60,000.00
80,000.00
Less: Additional Investment 35,000.00
45,000.00
Beginning Capital, dec 2020 415,000.00

Asset 520,000.00
Less: Owner's Equity 415,000.00
Liabilities 105,000.00

Jan, 31 Salaries Expense 37,800.00

Salaries Payable 37,800.00

Dec, 31 Service Fees Receivable 42,000.00

Service Fees 42,000.00

2020
Jan, 1 Building 1,410,000.00
Cash 1,410,000.00
To record the acquired building

Dec, 31 Depreciation Expense-Building 50,400.00

Accrumulated Depreciation-Building 50,400.00

Cost 1,410,000.00
Residual Value 150,000.00
Estimated Life 25
C-RV/EL
Annual Depreciation 50,400.00

Doubtful Account Expense 3,540.00

Allowance for Doubtful Account 3,540.00

Required ending balance of Allowance for Doubtful Acc 4,300.00

(10% x P43,000)
less credit balance of Allwance before Adjustment 760.00
Doubtful Accounts Expense for the preiod 3,540.00
Doubtful Account Expense 15,000.00
Allowance for Doubtful Account 15,000.00

Required ending balance of Allowance for Doubtful Acc 7,000.00

(1% x P700,000)
add debit balance of Allwance before Adjustment 8,000.00
Doubtful Accounts Expense for the preiod 15,000.00
a Dec 31 Supplies 14,125.00
Cash 14,125.00

Supplies Expense 9,905.00

Supplies 9,905.00
14,125-4220= 9905

b Oct 1 Insurance Expense 46,800.00

Cash 46,800.00

Dec 31 Prepaid Insurance 35,100.00

Insurance Expense 35,100.00
46,800/12= 3,900
3,900x3(for 3months)= 11,700
46,800-11,700= 35,100

c Oct 15 Prepaid Rent 27,000.00

Cash 27,000.00

Rent Expense 11,250.00

Prepaid Rent 11,250.00
27,000/6= 4,500
4,500x2.5(for 2.5 months)= 11,250

d April 30 Taxes Expense 64,800.00

Cash 64,800.00

Dec 31 Prepaid Tax 21,600.00

Taxes Expense 21,600.00
64,800/12= 5,400
5,400/8(for 8months)= 43,200
64,800-43,200= 21,600

e Advertising Expense 111,072.00

Cash 111,072.00

Dec 31 Prepaid Advertising 42,720.00

Advertising Expense 42,720.00
111,072/12= 2,136
2,136x32(for 32 issues)= 68,352
111,072-68,352= 42,720

f Jan 1 Equipment 235,200.00

Cash 235,200.00

Dec 31 Depreciation Expense- Equip 15,040.00

Accumulated Depreciation- Equip 15,040.00
235,200-9,600= 225,600
225,600/15= 15,040
g July 1 Automobile 720,000.00
Cash 720,000.00

Dec 31 Depreciation Expense- Automobile 39,375.00

Accumulated Depre- Automobile 39,375.00
720,000-90,000= 630,000
630,000/8= 78,750
78,750/12= 6,562.50
6,562.50x6= 39,375
 Doubtful Account Expense 26,600.00
Allowance for Doubtful Account 26,600.00

Required ending balance of Allowance for Doubtful Accs 17,840.00

(1% x P356,800)
add debit balance of Allwance before Adjustment 8,760.00
Doubtful Accounts Expense for the preiod 26,600.00

Doubtful Account Expense 48,760.00

Allowance for Doubtful Account 48,760.00

Required ending balance of Allowance for Doubtful Accs 40,000.00

add debit balance of Allwance before Adjustment 8,760.00
Doubtful Accounts Expense for the preiod 48,760.00

Doubtful Account Expense 53,440.00

Allowance for Doubtful Account 53,440.00

Required ending balance of Allowance for Doubtful Accs 34,680.00

(10% x P356,800)
add debit balance of Allwance before Adjustment 18,760.00
Doubtful Accounts Expense for the preiod 53,440.00

Account Receivable
Less: Allowance for Bad debts
Net Realizable Value

a Account Receivable 356,800.00

Less: Allowance for Bad debts - 17,840.00
Net Realizable Value 338,960.00

b Account Receivable 356,800.00

Less: Allowance for Bad debts - 40,000.00
Net Realizable Value 316,800.00

c Account Receivable 346,800.00

Less: Allowance for Bad debts - 34,680.00
Net Realizable Value 312,120.00
1 Oct 1 Insurance Expense 72,000.00
Cash 72,000.00

Dec 31 Prepaid Insurance 63,000.00

Insurance Expense 63,000.00
72,000/24= 3,000
3,000x3= 9,000
72,000-9,000= 63,000

2 Nov 1 Cash 58,500.00

Rent Income 58,500.00

Dec 31 Rent Income 45,500.00

Unearned Rent Income 45,500.00
58,500/9=6,500
6,500x2= 13,000
58,500-13,000= 45,500

3 Dec 31 Depreciation Expense-Machinery 136,250.00

Accumulated Depre- Machinery 136,250.00
558,000-78,000=480,000
480,000x.25= 120,000
78,000x.25=19,500
19,500x10/12=16,250
120,000+16,250= 136,250

4 Dec 31 Account Receivable 18,000.00

Commission 18,000.00

5 Dec 31 Supplies Expense 8,000.00

Supplies 8,000.00

6 Cash 76,000.00
Unearned Subscription 76,000.00

Dec 31 Unearned Subscription 30,400.00

Subscription Revenue 30,400.00
76,000x.40= 30,400

7 Dec 31 Interest Expense 2,340.00

Interest Payable 2,340.00
360,000x.09x26/360= 2,340

8 Dec 31 Unearned Fees 360,000.00

Fees Earned 360,000.00
600,000x.60= 360,000

9 Nov 16 Interest Receivable 4,500.00

 Interest Income 4,500.00
300,000x.12x45/360= 4,500

10 March 1 Prepaid Insurance 60,000.00

Cash 60,000.00

August 1 Prepaid Insurance 45,000.00

Cash 45,000.00

Dec 31 Insurance Expense 43,750.00

Prepaid Insurance 43,750.00
60,000/24(for 2yrs)= 2,500
2,500x10(for 10mnths)= 25,000
45,000/12(for 1yr)= 3,750
3,750x5(for 5mnths)= 18,750
25,000+18,750= 43,750
a Oct 31 Cash 48,000.00
Rent Revenue 48,000.00

Rent Revenue 16,000.00

Unearned Revenue 16,000.00
48,00/6=8,000
8,000x2(for 2months)= 16,000
48,000-16,000= 32,000

b Cash 35,100.00
Unearned Commissions 35,100.00

Dec 31 Unearned Commisions 14,625.00

Commission 14,625.00
35,100/12= 2,925
2,925x5= 14,625

c April 1 Cash 264,000.00

Unearned Service Fees 264,000.00

Dec 31 Unearned Service Fees 198,000.00

Service Fees 198,000.00
264,000/12= 22,000
22,000x9= 198,000

d May 31 Cash 14,040.00

Subscription Income 14,040.00

Dec 31 Subscription Income 5,850.00

Unearned Subscription Income 5,850.00
14,040/12= 1,170
1,170x7= 8,190
14,040-8,190= 5,850

e Wages Expense 54,000.00

Wages Payable 54,000.00
90,000/5= 18,000
18,000x3= 54,000

f Account Receivable 14,100.00

Service Revenue 14,100.00
 JERRY WEST, CPA JERRY WEST, CPA
Trial Balance Trial Balance
December 31, 2020 December 31, 2020
Debit Credit
Cash 28,400.00 Cash 31,100.00
Acc Receivable 22,310.00 Acc Receivable 19,610.00
Supplies 30,000.00 Supplies 6,600.00
Office Equipment 50,000.00 Office Equipment 73,400.00
Acc Payable 46,600.00 Acc Payable 47,140.00
Jerry West, Capital 90,000.00 Jerry West, Capital 90,000.00
Jerry West, Drawing 8,000.00 Jerry West, Drawing 13,000.00
Professional fees 42,660.00 Professional fees 50,670.00
Salaries Expense 24,000.00 Salaries Expense 25,000.00
Advertising Expense 9,100.00 Advertising Expense 4,100.00
Rent Expense 4,000.00 Rent Expense 4,000.00
Utilities Expense 5,000.00 Utilities Expense 10,000.00
Miscallaneous Expense 1,000.00 Miscallaneous Expense 1,000.00
181,810.00 179,260.00 187,810.00 187,810.00
-
The following errors were detected:
1. Cash received from a customer on account was debited for P 4,700 and Accounts Receivable
was credited for the same amount. The actual collection was for P 7,400.
2. The purchase of a computer on account for P 23,400 was recorded as a debit to supplies for
P 23,400 and a credit to Accounts payable for P 23,400.
3. Services were performed on account to a client for P 8,900. Accounts receivable was debited
for P 8,900 while Professional fees was credited for P 890.
4. A debit posting to Salaries expense of P 6,000 was omitted.
5. A payment on account for P 2,060 was credited to Cash for P 2,060 but debited to Accounts
payable for P 2,600.
6. The withdrawal of P 5,000 cash by the owner for his personal use was debited Salaries
expense.
7. Utilities expense of P 2,500 was posted as a credit rather than a debit.
8. The balance of Advertising expense is P 4,100 but it was listed as P 9,100 on the trial balance.