Ang Salon ng Bayan

BY: GIL O. ANASIN, C.P.A.

ZODIACAL, FELICITY G.
NAME OF STUDENT
BSA 1-1
COURSE/YEAR & SECTION
_______

Page 1 of 37
 PREFACE
In order to have a strong foundation in basic accounting, this
practice set has been designed for students taking up accounting course
with the following objectives:

1. To illustrate the application of general accounting principles and

procedures affecting a sole proprietorship engaged in small service-type
enterprise

2. To provide the students the experience of going through the series of

activities involved in a service-type business.

3. To have a full grasp of the accountant’s work.

4. To serve as a vital tool to fully understand and appreciate the processes

from the first step of the accounting cycle up to the presentation of the
financial statements.

With this material, it is the author’s intention to arouse the student’s

interest in accounting as a career as he believes that accounting is still
the most in demand job for all kinds of organizations.

Good luck and welcome to the world of accountants.

Gil Ortua Anasin,

C.P.A.

Page 2 of 37
 Table of contents

I Introduction 4

Ii Chart of Accounts 5

III Narrative of Transactions for December 6

IV Additional Information for Adjustments 9

V General Journal 10

VI General Ledger 15

VII Trial Balance 24

X Adjusting Entries 25

XI Adjusted Trial Balance 26

XII Worksheet 28

XIII Statement of Comprehensive Income 30

XIV Statement of Changes in Owner’s Equity 31

XV Statement of Financial Position 33

XVI Statement of Cash Flows 33

XVII Closing Entries 34

XVIII Post Closing Trial Balance 35

XIX Reversing Entries 36

XX Acknowledgement 37

Page 3 of 37
 Introduction

Ms. Gemma R. Angeles decided to put up her business, GEMS

HAIRCUTTERS. She hired you to help her start her business and provide her all
the necessary records: general journal, general ledgers, worksheet, and financial
statements.

Chart of accounts have been provided to you for reference. Specific

instructions on how to continue working with this practice set will be given to you
by your teacher or you can follow the steps of accounting cycle.

Upon completion of this practice set, you should be able to submit to your
teacher the following:
1. General Journals

2. General Ledgers

3. Trial Balance

4. Adjusting Entries

5. Worksheet

6. Payroll

7. Statement of Comprehensive Income

8. Statement of Financial Position

9. Statement of Changes in Equity

10. Statement of Cash Flows

11. Closing Journal Entries

12. Post-Closing Trial Balance

13. Reversing Journal Entries

Good luck and may your self-discovery learning be a productive journey

Gil Ortua Anasin, C.P.A.

Page 4 of 37
 GEMS HAIRCUTTERS
CHART OF ACCOUNTS

ACCOUNTS NUMBERS ACCOUNT TITLES

ASSETS
101 Cash on Hand
102 Cash in Bank
103 Accounts Receivable
103A Allowance for Doubtful Account
104 Notes Receivable
105 Shop Supplies
106 Prepaid Rent
107 Prepaid Insurance
108 Shop Equipment
108A Accumulated Depreciation – Shop Equipment
109 Furniture and Fixture
109A Accumulated Depreciation- Furniture & Fixture
LIABILITIES
201 Accounts Payable
206 Notes Payable
207 Interest Payable
OWNER’S EQUITY
301 Gemma R. Angeles, Capital
302 Gemma R. Angeles, Drawing
REVENUE
401 Service Revenue
EXPENSES
501 Taxes and Licenses
502 Salaries Expense
503 Shop Supplies Expense
504 Rent Expense
505 Utilities Expense
506 Insurance Expense
507 Advertising Expense
508 Interest Expense
509 Employee’s Benefits
510 Doubtful Account Expense
511 Depreciation Expense
512 Income and Expense Summary

Page 5 of 37
 NARRATIVE OF TRANSACTIONS FOR DECEMBER

Ms. Gemma R. Angeles opened a business in the name of GEMS Haircutters by investing
P500,000 cash on December 1, 2012. The following transactions have occurred during the
month of December, 2012

December 1 Rented a space for her beauty parlor for P12,000 per month by paying P36,000
for 3 month’s rent

1 Hired 1 Supervisor and 4 Beauticians.

2 Secured business permits and other municipal licenses and paid P10,000

3 Deposited P50,000 with Delmont Bank from the cash investment

3 Paid P3,500 cash for billboard and signage

3 Purchased Shop Equipment for P100,000 on cash

4 Purchased Shop Supplies for P50,000 cash

6 Purchased the following Furniture

Tables and Chairs – P6,500

Sofa – P15,000
Aircon – P25,000

Note: Paid 50% by issuing check no. 1501 and the balance after 30 days

6 Secured insurance for her parlor for P500,000 and issued Check No. 1502
amounting to P36,000 representing annual premium

7 Got a contract from GMA Talent Centers. Rendered service for P100,000 and
received 50% down payment and the balance after 30 days.

Page 6 of 37
 8 Deposited P50,000 with Delmont Bank

8 Bought additional supplies for P10,000 cash

14 The customer’s logbook showed total cash receipts of P55,000 for services
rendered to walk-in customers for week 1 of operation

15 Rendered service on account to the following customers:

Zeny Alviar – P3,000

Elisa Lopez – P2,500
Samuel Barros – P5,000

15 Paid the semi-monthly salaries of Employees, P30,000.00

16 Rendered service to Ms. Imelda Dela Peña wedding for P50,000 on account

16 Purchase additional tables and chairs and issued a 60-day 6% promissory note
to City Appliance Store, P15,000

16 Paid P15,000 for advertisements and other promotional materials

17 Ms. Gemma R. Angeles withdrew cash for her personal use, P10,000

18 Collected the account of Ms. Imelda Dela Peña

21 The customer’s logbook showed total cash receipts of P47,000 for services
rendered to walk-in customers for week 2 of operation

22 Paid the following bills: Meralco for electricity – P16,250,Ccheck No. 1503,
PLDT for Telephone service – P2,400, Check No. 1504

23 Collected the account of Ms. Zeny Alviar

23 Rendered service to Ms. May Manuel and received a promissory note of

P5,000

Page 7 of 37
 24 Made the following purchases on account: Shop Supplies – from HBC -
Amount – P31,250, Terms: 30 days

26 Rendered service to Ms. Arlene Dela Paz for cash – P3,500

27 Rendered service on account to the following customers:

Angel Lora – P1,500

Janet Fuentes – P3,500
Jeffrey Reyes – P3,000

27 Ms. Gemma R. Angeles made an additional withdrawal for her personal use,
P5,000

28 The customer’s logbook showed total cash receipts of P84,000 for services
rendered to walk-in customers for week 3 of operation

29 Collected half of the balance in December 7 transaction.

30 Received the bill from Maynlad Water Company for water consumption for
the month of December, P3,570

30 Paid salaries of employees, P30,000.00

31 The customer’s logbook showed total cash receipts of P28,000 for services
rendered to walk-in customers for 3 days.

31 Additional information:
 The expense method of recording prepayments is followed

 Three percent (3%) of doubtful accounts are allowed on accounts

receivable

 Shop Equipment are expected to last for 5 years with no salvage value

 Furniture and Fixture are expected to have a useful life of 5 years with
a salvage value of P5,000

 It is the company’s policy to take full month’s depreciation on the

Page 8 of 37
 month fixed asset was purchased

 The 2 depreciation expense may be combined

 Unused supplies amounted to P35,000

 The rent paid is for 3 months

 The insurance paid is for 1 year

 The notes payable is to be accrued for an interest of 6% for 15 days

PAGE _____
GENERAL JOURNAL
DATE DESCRIPTION PR DEBIT CREDIT
1 Decembe 1 Cash on Hand 101 5 0 0 0 0 0 1
r
2 2012 Gemma R. Angeles, 301 5 0 0 0 0 0 2

Capital
3 To record investment 3

4 4

5 1 Rent Expense 504 3 6 0 0 0 5

6 Cash On Hand 101 3 6 0 0 0 6

7 To record paid rent for 3 months 7

8 8

9 2 Taxes And Licenses 501 1 0 0 0 0 9

10 Cash In Bank 102 1 0 0 0 0 10

11 To record paid Business Permit and other 11

Municipal Licenses
12 12

Page 9 of 37
13 3 Cash In Bank 102 5 0 0 0 0 13

14 Cash In Bank 101 5 0 0 0 0 14

15 Torecord Deposited from the Cash 15

Investment
16 16

17 3 Advertising Expenses 507 3 5 0 0 17

18 Cash On Hand 101 3 5 0 0 18

19 To record Paid for Signage and Billboard 19

20 20

21 3 Shop Equipment 108 1 0 0 0 0 0 21

22 Cash On Hand 101 1 0 0 0 0 0 22

23 To record Purchase of Shop Equipment 23

24 24

25 4 Shop Supplies Expense 503 5 0 0 0 0 25

26 Cash On Hand 101 5 0 0 0 0 26

27 To record Purchase of Shop Supplies 27

28 28

29 6 Furniture and Fixture 109 4 6 0 0 0 29

30 Cash In Bank 102 2 3 2 5 0 30

31 Accounts Payable 201 2 3 2 5 0 31

32 To record Purchased of Furniture 32

33 33

34 6 Insurance Expense 506 3 6 0 0 0 34

35 Cash In Bank 102 3 6 0 0 0 35

36 To record Paid Insurance 36

37 37

PAGE _____
GENERAL JOURNAL
DATE DESCRIPTION PR DEBIT CREDIT
1 December 7 Cash On Hand 101 5 0 0 0 0 1

2 2012 Accounts Receivable 103 5 0 0 0 0 2

3 Service Revenue 401 1 0 0 0 0 0 3

4 To record Service Rendered 4

5 5

6 8 Cash In Bank 102 5 0 0 0 0 6

7 Cash On Hand 101 5 0 0 0 0 7

8 To record Deposited Cash In Bank 8

9 9

10 8 Shop Supplies Expense 503 1 0 0 0 0 10

11 Cash On Hand 101 1 0 0 0 0 11

12 To record Puchased of Shop Supplies 12

13 13

Page 10 of 37
14 14 Cash On Hand 101 5 5 0 0 0 14

15 Service Revenue 401 5 5 0 0 0 15

16 To record Service Rendered to walk in 16

customer for week 1 of operation
17 17

18 15 Accounts Receivable 103 1 0 5 0 0 18

19 Service Revenue 401 1 0 5 0 0 19

20 To record Service Rendered on Account 20

21 21

22 15 Salaries Expense 502 3 0 0 0 0 22

23 Cash On Hand 101 3 0 0 0 0 23

24 To record Paid the Semi-Monthky Salary 24

25 25

26 16 Accounts Receivable 103 5 0 0 0 0 26

27 Service Revenue 401 5 0 0 0 0 27

28 To record Service Rendered on Account 28

29 29

30 16 Furniture and Fixture 109 1 5 0 0 0 30

31 Notes Payable 206 1 5 0 0 0 31

32 To Record Purchased of Tables and Chairs 32

33 33

34 16 Advertising Expense 507 1 5 0 0 0 34

35 Cash On Hand 101 1 5 0 0 0 35

36 To record Paid for Advertisement 36

37 37

PAGE _____
GENERAL JOURNAL
DATE DESCRIPTION PR DEBIT CREDIT
1 December 17 Gemma R. Angeles, Drawing 302 1 0 0 0 0 1

2 2012 Cash On Hand 101 1 0 0 0 0 2

3 To record Withdrawal 3

4 4

5 18 Cash On Hand 101 5 0 0 0 0 5

6 Accounts Receivable 103 5 0 0 0 0 6

7 To record Collected Account 7

8 8

9 21 Cash On Hand 101 4 7 0 0 0 9

10 Service Revenue 401 4 7 0 0 0 10

11 To record Service Rendered to walk in 11

customer for week 2 of operation
12 12

13 22 Utilities Expense 505 1 8 6 5 0 13

Page 11 of 37
14 Cash In Bank 102 1 8 6 5 0 14

15 To record Paid for Bills 15

16 16

17 23 Cash On Hand 101 5 0 0 0 17

18 Accounts Receivable 401 5 0 0 0 18

19 To record Service Rendered 19

20 20

21 24 Shop Supplies Expense 503 3 1 2 5 0 21

22 Accounts Payable 201 3 1 2 5 0 22

23 To record Purchased of Shop Supplies 23

24 24

25 26 Cash On Hand 101 3 5 0 0 25

26 Service Revenue 401 3 5 0 0 26

27 To record Service Rendered 27

28 28

29 27 Accounts Receivable 103 8 0 0 0 29

30 Service Revenue 401 8 0 0 0 30

31 To record Service Rendered on 31

Account
32 32

33 27 Gemma R. Angeles, Drawing 302 5 0 0 0 33

34 Cash On Hand 101 5 0 0 0 34

35 To record Withdrawal 35

36 36

37 37

PAGE _____
GENERAL JOURNAL
DATE DESCRIPTION PR DEBIT CREDIT
1 December 28 Cash On Hand 101 8 4 0 0 0 1

2 2012 Service Revenue 401 8 4 0 0 0 2

3 To record Service Rendered to walk in 3

customer for week 3 of operation
4 4

5 29 Cash On Hand 101 2 5 0 0 0 5

6 Accounts Receivable 103 2 5 0 0 0 6

7 To record Service Rendered in December 7 7

Transaction
8 8

9 30 Utilities Expense 505 3 5 7 0 9

10 Accounts Payable 201 3 5 7 0 10

11 To record Payment for Water Bill 11

12 12

13 30 Salaries Expense 502 3 0 0 0 0 13

Page 12 of 37
14 Cash On Hand 101 3 0 0 0 0 14

15 To record Paid Salaries of Employees 15

16 16

17 31 Cash On Hand 101 2 8 0 0 0 17

18 Service Revenue 401 2 8 0 0 0 18

19 To record Service Rendered to walk in 19

customer for 3 days
20 20

21 21

22 22

23 23

24 24

25 25

26 26

27 27

28 28

29 29

30 30

31 31

32 32

33 33

34 34

35 35

36 36

37 37

PAGE _____
GENERAL JOURNAL
DATE DESCRIPTION PR DEBIT CREDIT
1 1

2 2

3 3

4 4

5 5

6 6

7 7

8 8

9 9

10 10

11 11

12 12

13 13

14 14

Page 13 of 37
15 15

16 16

17 17

18 18

19 19

20 20

21 21

22 22

23 23

24 24

25 25

26 26

27 27

28 28

29 29

30 30

31 31

32 32

33 33

34 34

35 35

36 36

37 37

GENERAL LEDGER
CASH ON HAND Account No. 101
Date Items PR Debit Date Items PR Credit
Dece 1 Investment GJ1 500,000 Dece 1 Paid Rent GJ1 36,000
mber mber
2012 7 Service Rendered GJ2 50,000 2012 2 Paid Business Permit GJ1 10,000
1 Service Rendered GJ2 55,000 3 Bank Deposit GJ1 50,000
4
1 Collected Balance GJ3 50,000 3 Paid Advertisement GJ1 3,500
8
2 Service Rendered GJ3 47,000 3 Purchases GJ1 100,000
1
2 Collected Balance GJ3 3,000 4 Purchases GJ1 50,000
3
2 Service Rendered GJ3 3,500 8 Bank Deposit GJ2 50,000
6
2 Service Rendered GJ4 84,000 8 Purchases GJ2 10,000
8
2 Collected Balance GJ4 25,000 1 Paid Employee’s Salaries GJ2 30,000
9 5
3 Rendered Service GJ4 28,000 1 Paid Advertisement GJ2 15,000
1 6
845,500 1 Owner’s Drawing GJ3 10,000
7
2 Owner’s Drawing GJ3 5,000
7
3 Employee’s Salaries GJ4 30,000
0
399,500
Page 14 of 37
 446,000

CASH IN BANK Account No. 102

Date Items PR Debit Date Items PR Credit
December 3 Cash Deposit GJ1 50,000 December 6 Purchase of Furniture GJ1 23,250
2012 8 Cash Deposit GJ2 50,000 2012 6 Payment for Insurance GJ1 36,000
100,000 2 Payment for Bills GJ3 18,650
2
77,900
22,100

ACCOUNTS RECEIVABLE Account No.103

Date Items PR Debit Date Items PR Credit
December 7 Revenue on Account GJ2 50,000 December 18 Receive Payments GJ3 50,000
2012 15 Revenue on Account GJ2 10,500 2012 23 Receive Payments GJ3 3,000
16 Revenue on Account GJ2 50,000 29 Receive Payments GJ4 25,000
27 Revenue on Account GJ3 8,000 78,000
118,500

40,500

ALLOWANCE FOR DOUBTFUL ACCOUNTS Account No. 103A

Date Items PR Debit Date Items PR Credit
Decembe 31 Allowance for bad ADJ 1,215
r debt E1
2012

NOTES RECEIVABLE Account No. 104

Date Items PR Debit Date Items PR Credit
Decemb 2 Service Rendered GJ3 5,000
er 3
2012
5,000

Page 15 of 37
SHOP SUPPLIES Account No. 105
Date Items PR Debit Date Items PR Credit
December 3 Unused Supplies ADJ 35,000
1 E1
2012

PREPAID RENT Account No. 106

Date Items PR Debit Date Items PR Credit
December 3 Prepaid Rent ADJ 24,000
1 E1
2012

PREPAID INSURANCE Account No. 107

Date Items PR Debit Date Items PR Credit
December 3 Prepaid ADJE1 33,000
1 Insurance
2012

SHOP EQUIPMENT Account No. 108

Date Items PR Debit Date Items PR Credit
December 3 Purchased GJ1 100,000
Equipment
2012 100,000

Page 16 of 37
ACCUMULATED DEPRECIATION – SHOP EQUIPMENT Account No. 108A
Date Items PR Debit Date Items PR Credit
December 3 Monthly ADJ 1,666.66
1 Depreciatio E1
n
2012

FURNITURE AND FIXTURE Account No. 109

Date Items PR Debit Date Items PR Credit
Decembe 6 Purchased GJ1 46,500
r Furniture
2012 16 Purchased GJ2 15,000
Furniture
61,500

ACCUMULATED DEPRECIATION- FURNITURE AND FIXTURE Account No. 109A

Date Items PR Debit Date Items PR Credit
December 3 Monthly ADJE1 941.66
1 Depreciation
2012

ACCOUNTS PAYABLE Account No. 201

Date Items PR Debit Date Items PR Credit
Decem 6 Purchases GJ1 23,250
ber
2012 2 Purchases GJ3 31,250
4
3 Utility Bills GJ4 3,570
0
58,070

Page 17 of 37
NOTES PAYABLE Account No. 206
Date Items PR Debit Date Items PR Credit
December 1 Purchase of GJ2 15,000
6 Furniture
2012 15,000

INTEREST PAYABLE Account No. 207

Date Items PR Debit Date Items PR Credit
Decemb 3 Accured ADJ 900
er 1 Interest E1
2012

GEMMA R. ANGELES, CAPITAL Account No. 301

Date Items PR Debit Date Items PR Credit
Decem 1 Investment GJ1 500,000
ber
2012

GEMMA R. ANGELES, DRAWING Account No. 302

Date Items PR Debit Date Items PR Credit
Decem 1 Withdrawal GJ3 10,000
ber 7
2012 2 Withdrawal GJ3 5,000
Page 18 of 37
 7
15,000

SERVICE REVENUE Account No. 401

Date Items PR Debit Date Items PR Credit
December 31 Closing Revenue CE1 391,000 December 7 Service Rendered GJ2 100,000
Account
2012 2012 14 Service Rendered GJ2 55,000
15 Service Rendered GJ2 10,500
16 Service Rendered GJ2 50,000
21 Service Rendered GJ3 47,000
23 Service Rendered GJ3 5,000
26 Service Rendered GJ3 3,500
27 Service Rendered GJ3 8,000
28 Service Rendered GJ4 84,000
31 Service Rendered GJ4 28,000
391,000

TAXES AND LICENSES Account No. 501

Date Items PR Debit Date Items PR Credit
December 2 Paid Business GJ1 10,000 December 3 Closing Expense CE1 10,000
Permit Account
1
2012 10,000 22012

SALARIES EXPENSE Account No. 502

Date Items PR Debit Date Items PR Credit
December 15 Salary for GJ2 30,000 Decembe 31 Closing CE1 60,000
Employees Expense
r Account
2012 30 Salary for GJ4 30,000 2012
Employees
60,000

SHOP SUPPLIES EXPENSE Account No. 503

Date Items PR Debit Date Items PR Credit
December 4 Purchase of GJ1 50,000 December 31 Closing CE1 91,250
Shop Supplies Expense
Account
2012 8 Purchase of GJ2 10,000 2012
Shop Supplies

Page 19 of 37
 24 Purchase of GJ3 31,250
Shop Supplies
91,250

RENT EXPENSE Account No. 504

Date Items PR Debit Date Items PR Credit
December 1 Paid Rent GJ1 36,000 December 31 Payment of ADJE1 24,000
rent Expense
2012 36,000 2012 31 Closing CE1 12,000
Expense of
Account

UTILITIES EXPENSE Account No. 505

Date Items PR Debit Date Items PR Credit
December 2 Utility Bills GJ3 18,650 December 31 Closing Expense CE1 22,220
of Account
2
2012 3 Utility Bills GJ4 3,570 2012
0
22,220

INSURANCE EXPENSE Account No. 506

Date Items PR Debit Date Items PR Credit
December 6 Payment of GJ1 36,000 December 31 Insurance Prepaid ADJE1 33,000
Insurane
2012 36,000 2012 31 Closing Expense CE1 3,000
of Account

ADVERTISING EXPENSE Account No. 507

Date Items PR Debit Date Items PR Credit
December 3 Paid GJ1 3,000 December 31 Closing Expense CE1 18,500
Advertisement of Account

Page 20 of 37
 2012 1 Paid GJ2 15,000 2012
Advertisement
6
18,000

INTEREST EXPENSE Account No. 508

Date Items PR Debit Date Items PR Credit
December 3 Accrued Interest ADJ 900 December 31 Closing Expense CE1 900
of Account
1 E1
2012 2012

EMPLOYEES BENEFITS Account No. 509

Date Items PR Debit Date Items PR Credit

DOUBTFUL ACCOUNT EXPENSE Account No. 510

Date Items PR Debit Date Items PR Credit
December 3 Bad Debt ADJE1 1215 December 31 Closing Expense CE1 1215
of Account
1
2012 2012

Page 21 of 37
DEPRECIATION EXPENSE Account No. 511
Date Items PR Debit Date Items PR Credit
December Equipment monthly ADJE1 December Closing Expense
31 1666.66 31 CE1 2,608.32
depreciation of Account
2012 Furniture monthly ADJE1 2012
31 941.66
depreciation

INCOME AND EXPENSE SUMMARY Account No. 512

Date Items PR Debit Date Items PR Credit
December 31 Closing Expense of CE1 186,693.32 December 31 Closing revenue CE1 391,000
Account account
2012 31 Closing Income and CE1 204,306.68 2012
Expense Summary
Account

GEMS HAIRCUTTERS
TRIAL BALANCE
DECEMBER 31, 2012
Page 22 of 37
 ACCOUNT ACCOUNT DEBIT CREDIT
NUMBER TITLES
1 101 Cash On Hand 4 4 6 0 0 0 1
2 102 Cash In Bank 2 2 1 0 0 2
3 103 Accounts Receivable 4 0 5 0 0 3
4 104 Notes Receivable 5 0 0 0 4
5 108 Shop Equipment 1 0 0 0 0 0 5
6 109 Furniture and Fixture 6 1 5 0 0 6
7 201 Accounts Payable 5 8 0 7 0 7
8 206 Notes Payable 1 5 0 0 0 8
9 301 Gemma R. Angeles, Capital 5 0 0 0 0 0 9
10 302 Gemma R. Angeles, Drawing 1 5 0 0 0 10
11 401 Service Revenue 3 9 1 0 0 0 11
12 501 Taxes and Licenses 1 0 0 0 0 12
13 502 Salaries Expense 6 0 0 0 0 13
14 503 Shop Supplies Expense 9 1 2 5 0 14
15 504 Rent Expense 3 6 0 0 0 15
16 505 Utilities Expense 2 2 2 2 0 16
17 506 Insurance Expense 3 6 0 0 0 17
18 507 Advertising Expense 1 8 5 0 0 18
19 19
20 TOTAL BALANCE 9 6 4 0 7 0 9 6 4 0 7 0 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
35 35
36 36
37 37

GEMS HAIRCUTTERS
ADJUSTING ENTRIES
DECEMBER 31, 2012

Page 23 of 37
 DATE DESCRIPTION PR DEBIT CREDIT
1 Doubtful Accounts Expense 510 1 2 1 5 1
2 Allowance for Doubtful Accounts 103A 1 2 1 5 2
3 To adjust allowance for bad debt 3
4 4
5 Depreciation Expense 511 1 6 6 6 6 .66 5
6 Accumulated depreciation - shop 108A 1 6 6 6 6 .66 6
equipment
7 Equipment’s Monthly depreciation 7
8 8
9 Depreciation Expense 511 9 4 1 .66 9
10 Accumulated depreciation - Furniture 109A 9 4 1 .66 10
and Fixure
11 Furniture’s Monthly Depreciation 11
12 12
13 Shop Supplies 105 3 5 0 0 0 13
14 Shop Supplies Expense 503 3 5 0 0 0 14
15 Unused Supplies 15
16 16
17 Prepaid Rent 106 2 4 0 0 0 17
18 Rent Expense 504 2 4 0 0 0 18
19 Adjusting rent expense for the month 19
20 20
21 Prepaid Insurance 107 3 3 0 0 0 21
22 Insurance Expense 506 3 3 0 0 0 22
23 Adjust Insurance Expense for the month 23
24 24
25 Interest Expense 508 9 0 0 25
26 Interest Payable 207 9 0 0 26
27 Accrued Interest 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
35 35
36 36
37 37

GEMS HAIRCUTTERS
ADJUSTING ENTRIES
DECEMBER 31, 2012

DATE DESCRIPTION PR DEBIT CREDIT

1 101 Cash on Hand 4 4 6 0 0 0 1

Page 24 of 37
2 102 Cash in Bank 2 2 1 0 0 2
3 103 Accounts Receivable 4 0 5 0 0 3
4 103A Allowance for Doubtful Account 1 2 1 5 4
5 104 Notes Receivable 5 0 0 0 5
6 105 Shop Supplies 3 5 0 0 0 6
7 106 Prepaid Rent 2 4 0 0 0 7
8 107 Prepaid Insurance 3 3 0 0 0 8
9 108 Shop Equipment 1 0 0 0 0 0 9
10 108A Accumulated Depreciation – Shop 1 6 6 6 .66 10
Equipment
11 109 Furniture and Fixture 6 1 5 0 0 11
12 109A Accumulated Depreciation- Furniture & 9 4 1 .66 12
Fixture
13 201 Accounts Payable 5 8 0 7 0 13

14 206 Notes Payable 1 5 0 0 0 14

15 207 Interest Payable 9 0 0 15
16 301 Gemma R. Angeles, Capital 5 0 0 0 0 0 16
17 302 Gemma R. Angeles, Drawing 1 5 0 0 0 17
18 401 Service Revenue 3 9 1 0 0 0 18
19 501 Taxes and Licenses 1 0 0 0 0 19
20 502 Salaries Expense 6 0 0 0 0 20
21 503 Shop Supplies Expense 5 6 2 5 0 21
22 504 Rent Expense 1 2 0 0 0 22
23 505 Utilities Expense 2 2 2 2 0 23
24 506 Insurance Expense 3 0 0 0 24
25 507 Advertising Expense 1 8 5 0 0 25
26 508 Interest Expense 9 0 0 26
27 510 Doubtful Account Expense 1 2 1 5 27
28 511 Depreciation Expense 2 6 0 8 .32 28
29 29
30 TOTAL BALANCE 9 6 8 7 9 3 .32 9 6 8 7 9 3 .32 30
31 31
32 32
33 33
34 34
35 35
36 36
37 37

GEMS HAIRCUTTERS
ADJUSTED TRIAL BALANCE
DECEMBER 31, 2012
ACCOUNT ACCOUNT DEBIT CREDIT
NUMBER TITLES
1 1
2 2

Page 25 of 37
3 3
4 4
5 5
6 6
7 7
8 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
35 35
36 36
37 37

Page 26 of 37
 WORKSHEET
FOR THE MONTH ENDED
DECEMBER 31, 2012
FINANCIAL POSITION

CREDIT
STATEMENT OF

DEBIT
INCOM

CREDIT
E

Page 27 of 37
 TRIAL BALANCE ADJUSTMENTS ADJUSTED STATEM
TRIAL BALANCE ENT

ACCOUNT NO ACCOUNT TITLES DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT

Page 28 of 37
 FINANCIAL STATEMENTS
FOR THE MONTH ENDED
DECEMBER 31, 2012

Page 29 of 37
 GEMS HAIRCUTTERS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE MONTH ENDED DECEMBER 31, 2012

Service Revenue 391,000

Less: Expenses

Taxes and Licenses

10,000
Salaries Expense 60,000

Shop Supplies Expense

56,250
Rent Expense 12,000

Utilities Expense 22,220

Insurance Expense 3,000

Advertising Expense 18,500

Interest Expense 900

Doubtful Account Expense 1,215

Depreciation Expense 2,608.32

Total Expenses 186,693.32

Net Income 204,306.68

GEMS HAIRCUTTERS
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2012

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Gemma R. Angeles, Capital - December 1, 2012 0

Add: Investment 500,0000

Net Income 204,306.68

Total 704,306.68

Less: Gemma R. Angeles, Drawings (15,000)

Gemma R. Angeles, Capital- December 31, 2012 689,306.68

GEMS HAIRCUTTERS
STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2012

ASSETS

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CURRENT ASSETS
Cash on hand 446,000
Cash in Bank 22,100
Accounts Receivable 40,500
Allowance for Doubtful Account (1,215)
Notes Receivable 5,000
Shop Supplies 35,000
Prepaid Rent 24,000
Prepaid Insurance 33,000
TOTAL CURRENT ASSETS 604,385
NON-CURRENT ASSETS
Shop Equipment 100,000
Accumulated Depreciation – Shop Equipment (1,666.66)
Furniture and Fixture 61,500
Accumulated Depreciation- Furniture & Fixture (941.66)
TOTAL NON-CURRENT ASSETS 158.891.68
TOTAL ASSETS 763,276.68

CURRENT LIABILTY
Accounts Payable 58,070
Notes Payable 15,000
Interest Payable 900
TOTAL LIABILITY 73,970
OWNER’S EQUITY
Gemma R. Angeles, Capital 689,306.68
TOTAL LIABILITY and OWNER’S EQUITY 763,276.68

GEMS HAIRCUTTERS
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED DECEMBER 31, 2012

Cash Flow from Operating Activities:

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Cash receipts from customers ₱345,500
Payment for Taxes and Licenses (10,000)
Payment for Advertisement (18,500)
Payment for Shop Supplies (60,000)
Payment for Salaries (60,000)
Payment for Utilities (18,650)
Payment for Rent (36,000)
Payment for Insurance (36,000)
Total Operating Inflow ₱106,350

Cash Flow from Investing Activities:

Payment for Shop Equipment (100,000)
Payment for Furniture and Fixture (23,250)
Total Investing Outflow ₱(123,250)

Cash Flow from Financing Activities:

Investment from the owner ₱500,000

Withdrawal of the owner (15,000)
Total Financing Inflows 485,000
Net Increase ₱468,100
Beginning Balance - December 1,2012 -
Ending Balance - December 31, 2012 ₱468,100

GEMS HAIRCUTTERS
CLOSING ENTRIES
DECEMBER 31, 2012
DATE DESCRIPTION PR DEBIT CREDIT
1 Service Revenue 401 3 9 1 0 0 0 1

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2 Income and Expense Summary 512 3 9 1 0 0 0 2
3 Closing for revenue account 3
4 4
5 Income and Expense Summary 512 1 8 6 6 9 3 .32 5
6 Taxes and Licenses 501 1 0 0 0 0 6
7 Salaries Expense 502 6 0 0 0 0 7
8 Shop Supplies Expense 503 5 6 2 5 0 8
9 Rent Expense 504 1 2 0 0 0 9
10 Utilities Expense 505 2 2 2 2 0 10
11 Insurance Expense 506 3 0 0 0 11
12 Advertising Expense 507 1 8 5 0 0 12
13 Interest Expense 508 9 0 0 13
14 Doubtful Account Expense 510 1 2 1 5 14
15 Depreciation Expense 511 2 6 0 8 .32 15
16 Closing Expense Accounts 16
17 17
18 Income and Expense Summary 512 2 0 4 3 0 6 .68 18
19 Gemma R. Angeles, Capital 301 2 0 4 3 0 6 .68 19
20 Closing income and expense summary 20
account
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GEMS HAIRCUTTERS
POST-CLOSING TRIAL BALANCE
DECEMBER 31, 2012
ACCOUNT ACCOUNT DEBIT CREDIT
NUMBER TITLES
1 101 Cash on Hand 4 4 6 0 0 0 1

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2 102 Cash in Bank 2 2 1 0 0 2
3 103 Accounts Receivable 4 0 5 0 0 3
4 103A Allowance for Doubtful Account 1 2 1 5 4
5 104 Notes Receivable 5 0 0 0 5
6 105 Shop Supplies 3 5 0 0 0 6
7 106 Prepaid Rent 2 4 0 0 0 7
8 107 Prepaid Insurance 3 3 0 0 0 8
9 108 Shop Equipment 1 0 0 0 0 0 9
10 108A Accumulated Depreciation – Shop 1 6 6 6 .66 10
Equipment
11 109 Furniture and Fixture 6 1 5 0 0 11
12 109A Accumulated Depreciation- Furniture & 9 4 1 .66 12
Fixture
13 201 Accounts Payable 5 8 0 7 0 13

14 206 Notes Payable 1 5 0 0 0 14

15 207 Interest Payable 9 0 0 15
16 301 Gemma R. Angeles, Capital 6 8 9 3 0 6 .68 16
17 17
18 TOTAL BALANCE 7 6 7 1 0 0 7 6 7 1 0 0 18
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GEMS HAIRCUTTERS
REVERSING ENTRIES
DECEMBER 31, 2012

DATE DESCRIPTION PR DEBIT CREDIT

1 December 1 Shop Supplies Expense 503 3 5 0 0 1
2 2013 Shop Supplies 105 3 5 0 0 2
3 Reversing shop supplies adjustment 3

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4 4
5 1 Rent Expense 504 2 4 0 0 0 5
6 Prepaid Rent 106 2 4 0 0 0 6
7 Reversing rent adjustment 7
8 8
9 1 Insurance 506 3 3 0 0 0 9
10 Prepaid Insurance 107 3 3 0 0 0 10
11 Reversing insurance adjustment 11
12 12
13 1 Interest payable 207 9 0 0 13
14 Interest Expense 508 9 0 0 14
15 Reversing Interest adjustment 15
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ACKNOWLEDGEMENT

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STUDENT’s SIGNATURE

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