MANILA, Philippines – Did you miss the income tax return (ITR) filing

deadline on April 15? If yes, you will have to pay the price.

Republic Act 8424 or the Tax Reform Act of 1997 imposes penalties on
late filers, as well as persons who commit tax-related offenses.
(READ: Why do we pay taxes?)

In general, if you missed the April 15 deadline, you should pay 25% of
the tax amount due plus 20% interest per annum (from the
deadline until the amount is fully paid), on top of the tax you are
required to pay.

The 25% surcharge is also imposed if you file your ITR with the wrong
internal revenue officer.

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T-Accounts, Journal Entry and Trial

Balance Question
by Jane
(Philippines)

Q: Juan de la Cruz began professional practice as a system analyst on July 1. He

plans to prepare a monthly financial statement. During July, the owner completed
these transactions (PHP = Philippine Peso, currency of Philippines):

July 1. Owner invested PHp 500,000 cash along with computer equipment that
had a market value of php. 120,000 two years ago but was now worth Php.
100,000 only.
July 2. Paid php. 15,000 cash for the rent of office space for the month.
July 4. Purchased php. 12,000 of additional equipment on credit (due within 30
days).
July 8. Completed awork for a client and immediately collected the php. 32,000
cash.
July 10. Completed work for a client and sent a bill for php. 27,000 to be paid
within 30 days.
July 12. Purchased additional equipment for php. 8,000 in cash.
July 15. Paid an assistant php. 6,200 cash as wages for 15 days.
July 18. Collected php. 15,000 on the amount owed by the client.
July 25. Paid php. 12,000 cash to settle the liability on the equipment purchased.
July 28. Owner withdrew php. 500 cash for personal use.
July 30. Completed work for another client who paid only php. 40,000 for 50% of
the system design.
July 31. Paid salary of assistant php. 700.
July 31. Received PLDT bill, php. 1,800 and Meralco bill php. 3,800.

Required:
Prepare the journal entries, T accounts and trial balance for this business.

A:
This is a really good question to practice.

Journal entries for the above transactions:

July 1 Dr Cash 500,000

Dr Computer Eqpt 100,000
Cr Capital 600,000
Owner started business with cash and computer Eqpt.

2 Dr Rent Exp 15,000

Cr Cash 15,000
Paid rent of office for the month of July.
4 Dr Equipment 12,000
Cr Creditors 12,000
Equipment purchased for business use.

8 Dr Cash 32,000
Cr Services rendered (income) 32,000
Services rendered for a client.

10 Dr Debtors 27,000
Cr Services rendered (income) 27,000
Services rendered for a client.

12 Dr Equipment 8,000
Cr Cash 8,000
Additional equipment purchased.

15 Dr Salaries & Wages 6,200

Cr Cash 6,200
Paid wages to assistant for 15 days.

18 Dr Cash 15,000
Cr Debtors 15,000
Received cash from debtor.

25 Dr Creditors 12,000
Cr Cash 12,000
Creditors of Eqpt purchased, settled.

28 Dr Drawings 500
Cr Cash 500
Owner withdrew cash for personal use.

30 Dr Cash 40,000
Dr. Debtors 40,000
Cr Services rendered (income) 80,000
50% amount received by a client on a/o work completed.
31 Dr Salaries & Wages 700
Cr Cash 700
Paid salary to the assistant.

31 Dr Utilities Exp (PLDT) 1,800

Dr Utilities Exp (Meralco) 3,800
Cr Creditors 5,600
PLDT and Meralco have been assumed to be the utility companies.

Note: In this example we have combined salaries and wages into one account, but
sometimes in real life these are kept separate - one account for wages and another
account for salaries.
T-ACCOUNTS:
TRIAL BALANCE:
Tutorials relating to this T-Accounts, Journal Entry and Trial Balance Question:
 Journal Entry - Equity Example

 Journal Entry - Expenses Example

 Journal Entry - Cash Income Example

 Journal Entry - Income on Credit Example

 Journal Entry - Debtor Pays Example

 Journal Entry - Example of Buying an Asset

 Journal Entry - Drawings Example

 Journal Entry - Incurring a Liability or Debt

 Journal Entry - Drawings Example

 T-accounts

 How to Balance a T-account

 The Trial Balance

There you go. Hope you liked this detailed accounting question and answer.

Best of luck with your studies!

- Michael Celender
Founder of Accounting Basics for Students

For more exercises return to the Full Accounting Questions and Answers page.

Comments for T-Accounts, Journal

Entry and Trial Balance Question
Click here to add your own comments

Please can you make P/L accounts and Balance

Sheet for this Question
by: Anonymous

Please can you provide P/L accounts and Balance

sheet for this question.

Please provide
by: Anonymous

Sir thank your for this example... Can you please

provide the trading, p and l and balance sheet of
this example?

Answer this pls - Journals, Ledger Accounts,

Trial Balance, Profit & Loss, Balance Sheet
by: Anonymous

2017
October 1 Started business with $50,000
deposited in bank
October 4 Purchased delivery van for $18,000
paying by cheque
October 5 Bought office equipment on credit from
Elvis Ltd., for $8,000
October 8 Paid for advertising $540 cheque
October 11 Withdrew $3,000 cash from bank for
business use
October 14 Bought goods on credit from: Gunner
$560 and Philo $760
October 16 Returned goods to Gunner worth $100
October 19 Sold goods on credit to: Samuel
$1,130 and C Dimmock $890
October 21 Paid for stationery $230 cash
October 22 Withdrew $2,750 from bank for
personal use
October 25 Paid rent $2,700 paying by cheque
October 26 Goods returned by Samuel worth $270
October 29 Sales made on credit to J Rudling for
$960
October 30 Commission received by firm: $290
cash

1. Inventory at 31st October 2017 is $520.

2. Prepare Journal accounts and Ledger accounts,
balance off the accounts.
3. Trial balance for 31 October 2017.
4. Statement of comprehensive income for 31
October 2017.
5. Statement of Financial Position for 31 October
2017.

What is Balance C/F and Where Did It Come

From?
by: boybato

What is balance C/F?

And where did it come from?

Thanks...

"C/F" stands for Carried Forward. It is just a

term used in accounting to mean that you will
take a balance from one period and "carry it
forward" (copy it) to the next period. For
example, we will carry forward the balance of
$600 cash on January 31 to February 1 (the next
period).

See the detailed lesson on how to balance a T-

account for more information.

Hope that makes sense!

- Michael
Founder of Accounting-Basics-for-Students.com

hello
by: Anonymous

Instead of using Debtors Account Use Accounts

Receivable.

Instead of Creditors Account use Accounts

Payable. In that way its more clear that you have
receivables and payables.

ENTRIES
by: ALJHUN

I really don't know if this journal entries as what

you presented as example is applicable to the
Philippines. Specifically the entries like debit
debtors credit cash? or credit creditors debit cash?
You know what I mean? This samples that you
have is not that typical source that we can rely on
for our studies. Especially we are accounting
major.

18 Cash 15,000
Debtors (Mr. X) 15,000
Received cash from debtor (Mr. X).

25 Creditors (Mr. Y) 12,000

Cash 12,000
 Creditors of Equipment purchased, settled.

*Editor

Click here to add your own comments

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