ACCOUNTING CYCLE

EXERCISE 1: JOURNALIZE THE BUSINESS TRANSACTIONS OF LAURA DIMOS

USING A JOURNAL SHEET

Laura Dimos started her own consulting firm, Dimos Consulting, on 1 May 2015.
The following transactions occurred during the month of May.
1. Dimos invested 16,000 cash in the business
2. Paid 1,600 for office rent for the month.
3. Purchased 1000 supplies on account.
4. Paid 100 to advertise in the Philippine Daily Inquirer.
5. Received 6000 cash for services provided.
6. Withdrew 1,400 cash for personal use.
7. Performed 6,600 of services on account.
8. Paid 8000 for employee salaries.
9. Paid for the supplies purchased on account on May.
10. Received a cash payment of 4,000 for services provided
11. Borrowed 10,000 from the bank on a note payable.
12. Purchased office equipment for 4,800 on account
13. Paid 300 for utilities
14. Collected half of the receivables.
15. Purchased equipment for 8,800 and paid 2,000 in cash only.

EXERCISE 2: JOURNALIZE THE FOLLOWING TRANSACTIONS OF SAM SHEERAN

Sam Sheeran opened a legal services business on June 1. During July, the following transactions
occurred:

July 2: Paid P 2,400 cash on accounts payable.

4: Collected P 1,200 of accounts receivable.
6: Purchased additional office equipment for P 8,400 on account.
8: Earned revenue of P 23,600.
10: Sam Sheeran withdrew P 12,000 for personal use.
12: Paid salaries P 14,000 for July.
14: Paid rent P 18,000.
16: Received P 28,000 from PS Bank for money borrowed on a note payable.
18: Represented a client in a court hearing and earned P 20,000 but the client did not pay cash.
20: Bought office supplies for P 2000 on credit.
EXERCISE 3: JOURNALIZE THE FOLLOWING BUSINESS TRANSACTIONS

Mar. 2 Purchased auto cleaning supplies from Robert Suppliers for $750 on account.
4 Collected an account receivable of $525 from a customer, Elegant Kitchens.
5 Paid $275 in partial payment of an account payable to Lucy Co for equipment purchased in
February.
7 Issued shares in exchange for $5,600 cash.
9 Purchased office equipment from Diamond’s Warehouse for $3,700; paid $1,700 cash and issued
a note payable due in 90 days for the balance.

EXERCISE 4: JOURNALIZE THE FOLLOWING TRANSACTIONS

Capital Financial Advisors Limited had the following transactions during January, its first month of operations:

Jan. 1: Issued to Marvin Tycoon 9,000 shares of share capital in exchange for his investment of $45,000
cash.
5: Borrowed $30,000 from a bank and signed a note payable due in three months.
8: Purchased office furniture costing $19,750; paid $6,000 cash and charged the balance on account.
12: Paid $6,000 of the amount owed for office furniture.
15: Issued an additional 2,000 shares to an individual who invests $10,000 in the business.