PROBLEM I.

On 31 December 2017, end of the first year of operations, BLACKANGEL

Consultancy presented the following UNADJUSTED trial balance:

BLACKANGEL Consultancy
Preliminary Trial Balance
31-Dec-17

Cash P 50,000
Accounts Receivable 30,000
Office Supplies 5,000
Office Equipment 10,000
Office Furniture 15,500
Accounts Payable P 25,000
Black Angel, Capital 70,500
Black Angel, Drawings 10,000
Consultancy Fees 54,000
Rent Expense 5,000
Advertising Expense 12,000
Utilities Expense 12,000
Total P 149,500 P 149,500

Additional Information:

1. The office equipment has a service life of 10 years with no salvage value, while the office
furniture has an economic life of 15 years and a scrap value of P500.
2. Office supplies on hand at the end of the calendar year amount to P3,000.
3. The rent expense is for 2 years starting on January 1, 2017.
4. Salaries and Wages from Dec 16 to 31, 2017 have not been paid at year-end, 5,000.
5. P500 of the accounts receivable is doubtful as to collection.
6. Consultancy fees of P4,000 that were received but not yet earned are part of the
consultancy fees account.

Based on the above information, prepare (1) Adjusting Journal Entries, (2) Adjusted Trial balance,
(3) Statement of Operations, (4) Statement of Financial Position (5) Closing Entries (6) Post
Closing Trial Balance and (6) Reversing Entries

PROBLEM Ii. Based on the following ADJUSTED Trial balance of ANTMAN Store, prepare the
following basic financial statements, all in good form.

1. Statement of Operations (Multi-step form)

2. Statement of changes in Owner’s Equity
3. Statement of Financial Position/Condition (Account Form)
4. Statement of Cash Flows
 ANTMAN Store
Final Trial Balance
31-Dec-17

Accounts Payable P 400,000

Accounts Receivable-X 300,000
Accumulated Depreciation-Building 10,000
Accumulated Depreciation-Furniture and Fixtures 5,000
Building 105,000
Cash 200,000
Depreciation Expense 25,000
Furniture and Fixtures 50,000
Freight-In 15,000
Freight-Out 20,000
Interest Income 5,000
Interest Expense 10,000
Merchandise Inventory, beginning 300,000
Bank Loan Payable 100,000
Notes Receivable 200,000
Sales 1,200,000
Purchases 700,000
Sales Discounts 10,000
Purchase Returns and Allowances 5,000
Purchase Discounts 20,000
Sales Returns and Allowances 10,000
Utilities Expense 20,000
Ant Man, Capital ?
Ant Man, Drawings 50,000
Rent Expense 24,000
Prepaid Rent 6,000
Supplies on Hand 1,000
Supplies Used 4,000
Miscellaneous Expense 10,000
Salaries and Wages 100,000
Accrued Interest Income 5,000
Accrued Interest Expense 10,000
Mortgage Payable 150,000

Additional Information:

1. The mortgage payable is due 6 months after the balance sheet date.
2. 50% of the bank loan payable is to be paid on June 2018, while the other half is due on
2019.
3. The December 2017 inventory count showed merchandise of P400,000.

PROBLEM III. Using the information in the previous problem, prepare the following:

1. Closing entries
2. Post closing Trial Balance