Problem:

Mabel Wong began professional practice as a system analyst on July 1.

She plans to prepare a monthly financial statements. During July the owner completed these transactions.

1 Owner invested P50,000 cash along with furniture and fixtures that had a P20,000 market value two years ago
but worth 10,000 only on investment date.
2 Paid P25,000 cash for July rent including P 500 water bill for fully furnished office space
4 Purchased P120,000 worth of state of the art equipment on credit for thirty monthly instalment payments.
6 Purchased office supplies for cash, P 2,500.
8 Completed work for a client and immediately collected P 32,000 cash.
10 Billed client P 25,000
15 Paid an assistant P6,200 cash as wages for 15 days.
16 Collected P15,000 cash on client billed on July 10.
25 Owner withdrew P5,000 for personal use.
28 Paid the first instalment to settle the liability on the equipment purchased.
30 Paid salary of the assistant.
31 Paid PLDT bill P1,800 and Meralco bill P 1,800.
31 Used up P2,000 worth of supplies.
 Date Cash A/R Supplies Furniture Equipment A/P L/P Capital Changes in OE
01-Jul P50000 P10000 P60000
2 (P25000) (P500) Utilities Expense
(P24,500) Rent Expense
4 P120000 P120000
6 (P2500) P2500
8 P32000 P32000 Revenue
10 P25000 P25000 Revenue
15 (P6200) (P6200) Salaries Expense
16 P15000 (P15000)
25 (P5000) (P5000) Drawings
28 (P4000) (P4000)
30 (P6200) (P6200) Salaries Expense
31 (P3600) (P3600) Utilities Expense
31 (P2000) (P2000) Supplies Expense
BALANCE P44500 P10000 P500 P10000 P120000 P116000 - P69000
 Mabel Wong's Professional Practice
Statement of Financial Position
July 31, 2020

ASSETS LIABILITIES AND OWNER'S EQUITY

Cash P44500 Accounts Payable P116000
Accounts Receivable P10000 Loans Payable -
Supplies P500 Wong Capital P69000
Furniture and Fixtures P10000
Equipment P120000
Total Assets P185000 Total Liabilities and Owner's Equity P185000
 Mabel Wong's Professional Practice
Income Statement
For the Month Ended July 31, 2020

Service Revenue P57000

Less: Expenses
Rent Expense (P24500)
Salaries Expense (P12400)
Utilities Expense (P4100)
Supplies Expense (P2000)
Net Income P14000
 Mabel Wong's Professional Practice

Statement of Changes in Owner's Equity

For the Month Ended July 31, 2020

Beginning Capital -

Add: Net Income P14000

Total P14000

Less: Drawings (P5000)

Ending Capital P9000

 Mabel Wong's Professional Practice
Statement of Cash Flows
For the Month Ended July 31, 2020

Operating Activities:
Collection from Customers P47000
Payment of Expense (P41000)
Payment for the Purchase of Supplies (P2500)
Net Cash Inflow from Operation P3500

Financing Activities:
Borrowed by the Bank -
Withdrawal by the Owner (P5000)
Net Cash Outflow from Financing (P5000)

Investing Activities:
Payment for the Purchase of Equipment (P4000)
Net Cash Outflow from Investing (P4000)

Decrease in Cash (P5500)

Add: Cash Balance July 1 P50000
Cash Balance July 31 P44500