3-44 I Basic Financial Accounting-----

- ... - --- a
--- by Prof WIN_!Jallad_
and Reporting --- ~ ~ .

NAME:
SCORE:
-
PROFESSOR:
SECTION:

Problem #1
Debits and Credits

The following accounts are used by Godofredo Cadelina Maintenance Services:

1. Cash
2. Accounts Receivable
3. Supplies
4. Prepaid Insurance
5. Equipment
6. Notes Payable
7. Accounts Payable
8. Cadelina, Capital
9. Cadelina, Withdrawals
10. Service Revenues
11. Rent Expense
12. Repairs Expense

Cadelina Ma,i ntenance Services completed the following transactions:

Debit Credit
a. Paid for supplies purchased on account last month.
b. Billed customers for services performed.
c. Paid the current month's rent.
d. Purchased supplies on credit.
e. Received cash from customers for services performed.
f. Acquired equipment on account. I
g. Received a bill for repairs.
I
h. Returned part of the equipment purchased in (f) for
credit. I
i. Received cash from customers previously billed.
j. Paid the bill received in (g).
I
k. Booked an appointment for services. I
I. Paid for repairs with cash.
I
m. Made cash withdrawals.
------ I
Required:
I
Analyze each transaction and show the accounts affected by entering the corresponding I
numbers in the appropriate debit or credit column. Indicate no entry, if approprJ~t~~ ,.: .,.
. \,l · .,t .;.

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 Recor ding Business Transactions I 3-45
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NAME:
SECTION: !~~::~SOR:--_~_-_---~~~--=]
Problem #2
Debits and Credits

Innovative Designs, owned by Leopoldo Medina, has been operating for two years.
Below is a series of transactions. For each transaction indicate t he accounts that should
I •

be debited and credited . If no journal entry is required, write " n/a" in the columns. Use
the following account titles : Cash; Accounts Receivable; Suppli es; Prepaid Expen ses;
Equipment; Patents; Accounts Payable; Notes Payable; Salaries Payable; Med ina,
Capital; Medina, Withdrawals; Service Revenues and Operating Expenses .

Transactions Debit Credit 1

a. Purchased equipment for use in the business; paid one- I
third cash and gave a note payable for the balance.
b. Paid cash for salaries.
c. Collected cash for services performed this period.
d. Collected cash for services performed last period. _ _
1 1
e. Performed services this period on credit. __ __ __
1 1
f. Paid operating expenses incurred this period.
g. Paid cash for operating expenses incurred last period .
h. Incurred operating expenses this period to be paid next
period .
i. Purchased supplies for inventory to be used later; pa id
cash .
j. Used some of the supplies from inventory for
operations. -
l'
f

k. Purchased a patent (an intangible): paid cash . - - -- ·i I

I. Made a payment on the equipment note in (a); the --
payment was part principal and part interest expense . __ __ ___ --
.,.

m. Collected cash on ·accounts receivable for services

previously performed . _ _ _ _ _ ._. ___ .._
n. Paid cash on accounts payable for expenses previously
incurred. ... - ·- --·------
I
i
----- - - -4

o. On the last day of current period, pa id cash for an

insurance policy covering the next twely~m _opt~s. -· ..,_,, __ --· __ ,I j
3-46 I Basic Financial Accounting ond Reporting by Prof. WIN Ballada
....
SCORE:
-
NAME: -
PROFESSOR:
SECTION:

Problem #3.

Complete the following table by stating the accounting element of each account, and
whether increases and decreases in the accounts are represent ed by a debit or credit
entry. For example:

I
Increase Decrease
! Accounts I Element
Supplies l Debit Credit
I Asset

a. Service Revenues - g. Salaries Expense

b. Withdrawa l h. Office Equipmen t
C. Utilities Expense i. Fixtures and Fittings
d. Rent Expense J. Interest Expense
e. Cash in Bank k. Loans Payable
f. Trade Payables I. Capital

I I Accounts Element
I Increase Decrease
I
a. ' Service Revenues
!
! b. Withdrawa ls I
I
t C. Utilities Expense I
1

; :: ! Rent Expense
I

I Cash in Bank
I
I

;
I
I
I
-
!
i ~- : ,,aue Payables
:_~1_aries Expense
! I i _
: · _
l II , umce tqu1pment I
I
I
i. Fixtures and J

Fittings ! i I
j. Interest Expense
I
i
I
'
I
-
,-
I
I l
k.
-
I
1 Loans Payable I I

I.
J I I
Capital i I
1 ----

l,
 Recording Business Transactions I 3-4 7
iill

NAME: SCORE:
SECTION: PROFESSOR:

Problem #4
T-Account Analysis

The ten accounts that follow summarize the first week's transactions of the Kasan Usop
Airport T~xi:

Cash 11 Usop, Capital 31

(a) 140,000 100,000 (b) 140,000 (a )
(e) 10,000 2,000 (d)
3,000 (f)
5,000 (g) Usop, Withdrawals 32
1,000 (h) (h) 1,000
20,000 (i)
3,000 (j)
Fees Income 41
10,000 (e)

(d)
Supplies
2,000
12
(f) 3,000 I
Salaries Ex pense 51

13 Rent Expense 52
I
Service Vehicle
{b) 100,000
(g) 5,000 I
(c) 60,000

21 Gasoline Expense 53
(i) 20,000 I
Accounts Pa yable
60,000 c) U) 3,000

Required:
Determine whether the account debited or credit ed has increased or decreased.
 . · b p ,; WIN Bailado
3-48 Basic Financial Accountmg and Reportmg _Y ro~--=
§lli&lii C I

-
NAME: SCORE:
SECTION: PROFESSOR: -

Problem #5
Developing a Chart of Accounts

Cleofe Arib organized a new business and named it Arib Business Consultancy. Listed
below are the accounts that will be needed in the ledger:

Consulting Revenues Arib, Withdrawals

Accounts Receivable Income Summary
Building Office Supplies Expense
Cash Arib, Capital
Rent Expense Notes Payable
Furniture and Fixtures Prepaid Rent
Land Interest Expense
Miscellaneous Expense Salaries Expense
Referral Revenues Unearned Consulting Revenues
Accu. Depreciation-Building Office Supplies
Accu. Depreciation-F/F Interest Payable
Depreciation Expense-Building Insurance Expense
Depreciation Expense-F/F Accounts Payable

Required:

Arrange these accounts in the order in which they· would appear in the ledger. Assign
each account a number, using a three-digit numbering scheme: the 100 series for assets,
the 200 series for liabilities, etc. Use the second digit to indicate specific accounts
within a major category; for example, Cash would be account number 110.
-
~ AME: I SCORE:
Recording Business Transactio ns
- -
I 3-49

;ECTION: PROFESSOR:

problem #6
classification of Accounts

The following ledger accounts are used by Elizabeth Figueroa Tutorials:

a. Cash m. Figueroa, Withdraw a Is

b. Salaries Expense n. Salaries Payable
C. Accounts Receivable o. Unearned Revenues
d. Figueroa, Capital p. Office Equipmen t
e. Service Revenues q. Rent Payable
f. Prepaid Rent r. Notes Receivable
g. Accounts Payable s. Interest Expense
h. Land t. Notes Payable
i. Supplies Expense u. Supplies
j. Prepaid Insurance V. Interest Receivable
k. Utilities Expense w. Rent Expense
I. Service Revenues

Required: Indicate each account's classification and normal balance by placing(/ ) marks.
Type of Account
Owner's Equity Normal Balance

Asset Liability Figueroa, Figueroa,

Capital Withdrawals Revenues Expenses Debit Credit

a. I I
b.
C.
d.
e.
f.
g.
h.
i.
j.
k.
I.
m.
I
n.
o.
p,
--
q,
-
r.
s.
t.
u.
v.
w.
 3-50 I Basic Fin ancial Acco unting and Reporting by Prof WIN Ballada
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~ -- C - I - T '
- ---
◄

I NAME:
SECTION: ~
I SCORE:
: PROFESSOR:
j
Problem #7
Developing a Chart of Accounts and Recording Transactions in T-Accounts

Jackielyn M agpantay organized Eternal Images, a photogra phy and portrait studio, on
Oct. 1, 2019 . The studio complete d the following transactions during the month:

Oct. 1 Deposited P350,000 in a bank account in the name of the business .

3 Paid two month's rent deposit and one-mon th advance, P40,500.
5 Transferred to the business personal photogra phy equipme nt
valued at P129,000.
7 Ordered additiona l photogra phy equipme nt, P75,000.
8 Purchased office equipme nt for cash, P54,000.
10 Received and paid for the photogra phy equipme nt ordered on Oct.
7, P75,000.
12 Purchased photogra phy supplies on credit, P21,000.
13 Received cash for previously unbilled portraits , Pll,400.
17 Billed customers for portraits, P22,500.
19 Paid fifty percent of the supplies purchased on Oct. 12, Pl0,500.
25 Paid the electricit y bill for Oct., P3,600.
26 Paid the telephon e bill for Oct., P2,100.
28 Received payments from the customers billed on Oct. 17, P7,500.
29 Paid salaries to personnel, P12,000.
30 Received an advance paymen t from a custome r, Pl,500.
31 Withdre w P16,000 from the business for a personal emergency.

Required :

1. Read the transactions and develop a chart of accounts applicab le to the bu siness.

2. Record the transactions directly into T-accounts.

3. Determine the balance of each account.

 Recording Business Transac tions I 3-51

NAME: SCORE:
SECTION: PROFESSOR:

problem #8
Recording Transactions in T-Accounts and Preparing a Trial Balance

Apr. l,
Jay Omotoy opene d a plumb ing service, Alabang Plumbing. Operations began on
2020, and the follow ing transactions were completed during the month :
Apr. 1 Withd rew P67,000 from a personal savings account and used it to
open a new account in the name of Alabang Plumbing.
2 Acquir ed a service vehicle costing P81,000. A payment of Pl 7,500
in cash was made and a note payable given for the P63,500
remain der. -
3 Paid rent for the month , P7,150.
6 Acquir ed plumb ing supplies on account PlS,700.
7 Paid for three month s of advertising and recorded Prepaid
Advert ising in the amoun t of PG,000.
8 Cash in the amoun t of Pl8,35 0 was received for plumb ing services
render ed.
9 Acquir ed additio nal plumbing supplies for cash, PS,050.
11 Paid salaries, Pll,60 0.
15 Rendered plumb ing services and billed the customer, P42,200.
16 Paid PS, 700 of the amoun t owed from the transaction of Apr. ·6.
19 Paid miscellaneous expenses, P4,300.
20 Collected P21,000 from the customer on the Apr. 15 transaction.
21 Withd rew P14,S00 from the business.
22 Paid salaries, P14, 100.
24 Paid the firs! install ment of the note payable, P3,850.
25 Paid teleph one expense, Pl,250 .
27 Billed the Cleme nt Resort for plumb ing services rendered, P14,150.

Required:
1. Establish the follow ing T-accounts: Cash; Accounts Receivable; Plumbing Supplies;
y,
Prepaid Adver tising; Service Vehicle; Notes Payable; Accounts Payable; Omoto
e;
Capital; Omoto y, Withd rawals ; Plumbing Revenues; Salaries Expense; Rent Expens
Teleph one Expense; and Miscellaneous Expense.
of the
2. Record the transa ctions directl y into the T-accounts using the dates
transa ctions to identif y each transa ction.

3. Prepare a trial balance.

 3-52 I Basic Financial Accounting and Reporting by Prof. WIN
Bailado
-.....,,.-=.,~-~

-
NAME: SCORE: -
SECTION: PROFESSOR:
-
Problem #9
Recording Transactions in T-Accounts and Preparin
g a Trial Balance

On May 1, 2019, Jimelyn Evangelista opened

Self-Service Lau ndry . Dur ing May, the
following transactions wer e com plet ed:

a. Evangelista dep osit ed P250,000 in a bank acc oun

t in the nam e of the business.
b. Bought chairs and a tabl e paying cash, P6, 700.
c. Bought laun dry supplies on account from s·ubic
Supply Inc., P3,250.
d. P2 id rent for the mon th, PS, 750.
e. Bought was hing machines and dryers from Bata
an Equ ipm ent Cor p., PllS ,00 0,
paying P35,000 in cash and the balance on acc
ount.
f. Revenues earn ed on cash basis for the first half
of the mon th, Pl9 ,25 0.
g. Bought insurance for one year, P5,600.
h. Paid accounts to Bataan Equipment Corp., P7,0
00.
i. Received and paid elec tric bill, P2,080.
j. Revenues earn ed on cash basis for the second
half of the ·mon th, P12 ,350 .
k. Paid salaries of the par t-tim e assistant, P7,400.
I. Evangelista with dre w cash for personal use, P5,0
00.
m. Paid accounts to Subic Supply Inc., P2, 750.
n. Paid the city gov ern men t for sidewalk repair asse
ssment, P2,800.

Required:

l. Establish the follo win g T-accounts: Cash; Acc

ounts Receivable; Prepaid Insu ranc e;
Equipment; Fur nitu re and Fi~tures; Accoun
ts :aya ble; Evangelista, Capital;
Evangelista, With draw als; Laundry Revenues;
Salaries Expense; Supplies Expense;
Rent Expense; Util ities Expense and Miscellaneo
us Expense.
2. Record the tran sac tion s dire ctly into the T-ac
counts using the alphabets to iden tify
each transaction.
3. Prepare a trial balance.
 _..
't -
Recording Business Transactio ns 3-53
~

I ~:
SECTION: .
I. SCORE:
PROFESSOR:
I
I

I problem #10

I Recording Transactions in T-Accounts and Preparing a Trial Balance

Clyde Gamolo opened Cagayan Chiropractic Clinic. The following transactions occurred
during June of this year:

a. Gamolo invested P180,000 cash in the professional practice.

b. Gamolo invested in the firm professional equipment with a fair market
value of P72,000.
c. Bought a filing cabinet on account from Andrews Office Essentials, P3,260.
d. Paid cash for chairs for the waiting room, P4,620.
e. Bought a multi-fu nction printer for PlS,400 from Main Office Machine s,
paying P7,400 down; the balance is due in thirty days.
f. Received and paid telephon e bill, P990.
g. Billed patients for professional services performed, P16,120.
h. Paid Pl,800 as member ship dues to the national chiropractic association .
i. Received and paid electric bill, P910.
j. Received P6,900 from P,atients previously billed in transaction (g).
k. Paid in full accounts related to purchase of a filing cabinet.
I. Paid office rent for the month, PS,000.
m. Received P2,420 cash from walk-in patients.
n. Paid salaries of nurse assistant, P8,250.
o. Gamolo withdre w cash for personal use, Pll,500.

Required:
1. Establish the followin g T-accounts: Cash; A<:counts Receivable; Office Equipment;
Medical Equipme nt; Accounts Payable; Gamolo, Capital; Gamolo, Withdrawals;
Service Revenues; Salaries Expense; Rent Expense; Utilities Expense and
Miscellaneous Expense.
2. Record the transact ions directly into the T-accounts using the alphabets to identify
each transact ion.

3. Prepare a trial balance.

3-54 I Basic Financ ial Accou nting and Reporting by Prof WIN Bailad o

I SECT
NAME: I• SCORE:
PROFESSOR:
j
ION:

Probl em #11
Journalizing Transactions

The chart of accounts for Vincent Boron Delivery Service is as follows:

Assets Income
110 Cash 410 Delivery Revenues
120 Accou nts Receivable Expenses
130 Prepaid Insurance 510 Salaries Expense
140 Service Vehicle 520 Gas and Oil Expense
150 Office Equip ment 530 Repair Expense
Liabili ties 540 Advertising Expense
210 Accou nts Payable 550 Supplies Expense
Owne r's Equity 590 Miscellaneous Expense
310 Boron , Capital
320 Boron , Withd rawals

The entity comp leted the follow ing transa.ctions in May 2020:

May 3 Placed four week-end advertisements in the Sun Daily Central

Luzon for P18,500; the amount is due i·n 30 days.
6 Bought supplies on account from Supplies, Inc., PB,800.
15 Boron invested in the business own office equip ment with a fair
mark et value of P52,500.
17 Received P61,800 from charge customers to apply on their
accounts. .
22 Received a bill from Park Trucking for repair services performed,
PS,500.
26 Paid Supplies, Inc., P8,800 in full payment of account.
29 Paid salaries to employees, P21,000.
30 Received P39,000 for services performed.
31 Received and paid gasoline and oil bill relating to the service
vehicle, P12,500.
31 Billed South China Bank for services performed, P45,000.
31 Boron withd rew cash for personal use, P14,S00.

Required:
Prepare the journal entries for the May transactions.
 Recording Business Transactions I 3-55
a::
- NAME: SCORE:
SECTION: PROFESSOR:
-
Problem #12
s and Preparing a Trial Balance
Recording Tra nsa ctio ns in T-Account
nsactions
Kar la Da lan gin , a den tist , est abl ish ed Dalangin Clinic. The foll ow ing tra
John ·
occurred dur ing Jun e of this yea r:
ss.
Da lan gin dep osi ted P280,0 00 in a bank account in the name of the busine
a. ing
fro m Pitular Equipment for P4,950, pay
b. Bo ugh t a 3-in -1 offi ce equ ipm ent
ount.
Pl, 00 0 in cash and the balance on acc
table, paying cash, P12,300.
c. Bo ugh t wa itin g roo m chairs and a
t fro m-NE Office Supply, P2, 750.
d. Bo ugh t off ice inte rco m on accoun
bill, Pl, 080 .
e. Received and paid the tele pho ne
on account, P12,940.
f. Pe rfo rm ed professional services
, Pl,850.
g. Received and paid the electric bill
ved arid pai d the bill for the Reg ional Dental Convention, P3,500.
h. Recei
h, P17,650.
1. Pe rfo rm ed professional services for cas
Office Supply, Pl,000.
j. Pa rtia lly set tled accounts w fth NE
k. Paid ren t for the mo nth , P8,400.
ionist, P3,500.
I. Paid salaries of the par t-ti me recept
al use, P8,500.
m. Dalangin wit hd rew cash for person
cei ved PS ,500 on acc oun t fro m pat ients wh o were previously billed.
n. Re

Required:
uipment;
abl ish the fol low ing T-a cco unt s: Cash; Accounts Receivable; Office Eq
1. Est hdrawals;
e; Dalangin, Capital; Dalangin, Wit
Office Fu rni tur e; Accounts Payabl e and
e; Rent Expense; Uti litie s Expens
Professional Fees; Salaries Expens
Miscellaneous Expense.
ctio ns dir ect ly into the T-a cco unt s using the alphabets to ide ntif y
2. Record the tra nsa
each transacti.on.

3. Prepare a tria l balance.

 . b Prof WIN Ballada
3-56 I Basic Financial Accounting and Reportmg ~ ·

ISECTION:
NAME:
I SCORE:
PROFESSOR :
j
Problem #13
Journalizing, Posting and Preparing a Trial Balance
. . . • J arie Uy decided to establish
After several ye ars with a large accounting ftrm, oannam . ·
her own accounting practice. The following transaction s of Joannaman e Uy, CPA, were
completed during May 2019 :

May 2 Transferred P92,500 cash from a personal savings account to a checking

account, Joannamar ie Uy, CPA.
3 Acquired office equipment on account from Liboro Furniture, P36,800.
4 Acquired office supplies on account from Palatine Office Supply,
P17,100.
6 Performed accounting services for Gabayan Computers and submitted a
bill of P29,200 for those services.
7 Paid for accounting and tax books for use in the practice, Pl9,500 .
8 Paid Palatine Office Supply, P4,100 on account.
10 Acquired a condominiu m unit for the accounting practice, P265,000. A
down payment of P38,000 was made and issued a note payable for the
remaining P227,000.
12 Paid salaries, P14,200 .
13 Received P9, 750 from Gabayan Computers, billed on May 6.
16 Paid telephone expense, P650.
19 Received cash in the amount of P14,600 from Mallari Books for
accounting services rendered for the month.
22 Acquired office supplies on account from Palatine Office Supply,
P4,650.
23 Withdrew P8,150 for personal use.
25 Paid salaries, Pl0,300.
26 Billed Chua Exporters P31,600 for accounting services rendered.
27 Paid PICPA-Palawan PS,500 for professiona l dues.
28 Paid P3,250 rent on an office-copyi ng machine .

Required:

1. Prepare the journal entries for the May transactions .

2. Post the entries to the ledger accounts, using account numbers for cross •reference
and using journal page number 1.. The following accounts will be needed : cash
(110); Accounts Receivable (120); Office Suppli es (130); Office Con dominium (140);
Office Equipment (150); Accounting Library (160); Notes Payable (210); Accounts
Payable (220); Uy, Capital (310); Uy, Withdrawal s (320); Accoun ting Revenues (410);
Salaries Expense (510); Rent Expense (520); Telephone Expense (530) and
Professional Dues Expense (540).
3. Prepare a trial balance.
 Recording Business Transactions I 3-5 7

AME: N
t~ECTIO ISCORE:
PROFESSOR:

Problem #14
Journalizing Transactions

er 2019:
Joanne Java Review School entere d into the follow ing transactions during Octob

Oct. 1 Java made additio nal investments of PS0,000 in the business.

2 Bough t liabilit y insurance for one year, P14,S00.
3 Received a bill for advertising from South Min News, P3,200.
4 Paid rent for the month , P8,900.
7 Received a bill for equipm ent repair from E. Hipolit o, P2,880.
10 Received and depos ited tuition from students, P62,500.
11 Received and paid the teleph one bill, P2,300.
15 Bough t chairs from E. Awayan Furniture, P18,800, paying P8,800 in
cash and the balance on account.
18 Paid accou nts to South Min News, P3,200.
21 Java withd rew P8,000 for personal use.
24 Received a bill for gas and oil from Minda nao Oil Corp., Pl,800 .
25 Received and depos ited tuition from stude.nts, P61,400.
27 Paid salaries of the office assistants, P12,000.
28 Bough t a photo copier on account from Dadiangas Office Machines,
P7,500. 1

tuition
29 Received P7,000 tuition from a studen t who had charged~the
on accou nt last month .
30 Received and paid the water utilitie s bill, P3,600.
31 Paid for flower arrangements for front office, P620.
31 Java invest ed personal computer~ with a fair marke t value of
Pl2,30 0, in the business.

Required:
accounts:
Prepare the journa l entrie s for the Octob er transactions . . Use the follow ing
Payable;
Cash; Accounts Receivable; Prepaid Insurance; Equipment; Furniture; Accounts
Gas and
Java, Capital; Java, Withd rawals ; School Fees; Salaries _Expense; Rent Expense;
Expense;
Oil Expense; Adver tising Expense; Repair Expense; Supplies Expense; Utilitie s
Telecommunications Expense and Miscellaneous Expense.
3-58 I Bnsir Financial Accounting, orn;i Rc:~porting by Prof~WIN Bollada

I NAME: ----------- iLS~c~-o~R~E3._::- :-: -:---------j

[SECTION~- - - - - - - - - PROFESSOR:
Problem #1S
Journalizing,. Posting and Preparing a Trial Balance

Kareen Leon won a co ncess ion to rent out bicycles in the Burnham Park_during the
summer. During the month of April, Leon co mpleted the following transactions for her
bicycle rental bu si ness:
Apr. 2 Bega n business by pl acing P120,000 in a business checking account.
3 Purchased supplies on acco unt for Pl,500.
4 Purchased ten bicycles for P25,000, paying P12,000 down and agreed to pay
the balance in thirty days.
5 Paid P29,000 in cash for a furnished container to store the bicycles and use for
other operations.
6 Received P4, 700 in cash for rentals during the first week of operation.
8 Paid P4,000 in cash for shipping and installation costs (considered an addition
to the cost of the container) to place the container at the park entrance.
9 Hired a part-time assistant to help on weekends.
10 Paid a maintenance person P750 to clean the grounds.
13 Received PS,000 in cash for rentals during the second week of operation.
16 Paid the assistant P480 for a weekend's work.
17 Paid for the supplies purchased on April 3.
18 Paid a PSS0 repair bill on bicycles.
20 Received PS,500 in cash for rentals during the third week of operation.
22 Paid the assistant P480 for a weekend's work.
23 Billed an entity Pl,100 for bicycle rentals for employees' outing.
25 Paid the P3,000 fee for April to the Park Administration for the right to the
bicycle concession.
27 Received P4,100 in cash for rentals during the week.
29 Paid the assistant P480 for a weekend's work.
30 Transferred PS,000 to personal checking account.

Required:

1. Prepare the journal entries for the April transactions.

2. Set u_p the following ledger accounts and post all the journal entries: cash; Accounts
Re_ce1vable; Supplies; Container; Bicycles; Accounts Payable; Leon, Capital; Leon,
Withdrawals; Rental Revenues; Wages Expense; Maintenance Expense; Repair
Expense; and Concession Fee Expense.

3. Prepare a trial balance.

 Recording Business Transactions I 3-59
.,;iiiF'-- --1111/J

SCORE:
SECTION: PROFESSOR:

problem #16
Journalizing, Posting, Preparing a Trial Balance and Financial Statements

Vincent Fabella owns the Jose Rizal Heavy Bombers, a collegiate basketball team in the
Phil-Am Basketball Association. Presented below is the Nov. 30, 2019 trial balance
representing activities from Jan. 1, 2019 to Nov. 30, 2019, together with the account
numbers and titles:
Jose Rizal Heavy Bombers
Trial Balance
Nov. 30, 2019

Acct. No. Account Titles Debit Credit

110 Cash P 1,129,800
120 Accounts Receivable 3,712,500 ·
130 Uniform Supplies 31,050
140 , Prepaid Insurance -0-
150 Land 2,025,000
160 Training Facilities 12,750,000
170 Training Equipment 2,625,000
180 Player Contracts 11,250,000
210 Notes Payable ,r
P 1,800,000
220 Accounts Payable 4,725,000
230 Mortgage Payable 10,500,000
310 Fabella, Capital 17,643,750
320 Fabella, Withdrawals 1,875,000
410 Game Attendance Revenues . 10,125,000
510 Salaries Expense 4,875,000
520 Advertising Expense 400,950
530 Travel Expense 1,532,400
540 Laundry Expense 528,000
550 Medical Expense 194,550
560 Utilities Expense 1,734,000
570 Miscellaneous Expense 130,500
Totals P44, 793,750 P44, 793,750

uring the month of December 2019, the Bombers were participating in the 2019
layoffs and the following transactions took place:

Dec. 1 Acquired the contract of Agustin Tiangco from the Negros Navigators
for Pl,875,000; paying P225,000 in cash and financing the Pl,650,000
by issuing a note payable.
2 Collected P2,809,S00 on accounts receivable from season-ticket
holders.
3-60
ii

Dec. 3
Basic Financial Accounting and Reporting by Prof WIN Ba/Jada
-------;.;;;;;;;;;;=====:..--=~--=-=

Settled accounts payable, Pl,657,500.

~ ~ a
avnzr
-
4 Paid for TV advertising, P78,600.
5 Acquired on account additional uniforms for the upcoming series with
the San Alcantara Padres, P30, 750.
9 Billed season -ticket holders for the last five games, P320,25~.
10 Paid the amount due on this date for a note payable, P600,000.
11 Acquired insurance for the months of December to June, P215,250.
Record as prepaid insurance.
12 Acquired additional training equipment on account, P319,500.
15 Paid players ' salaries, Pl,136,250.
17 Received P3,316,0S0 cash for tickets to playoff games.
19 Paid travel expenses to San Alcantara, PSSS,000.
20 Paid laundry expenses, P12,600.
23 Paid creditors, P941,850.
25 Paid miscellaneous expenses, P26,850.
26 Paid medical expenses, P18,900.
27 Paid utilities expenses, P210,450.
28 Paid players' salaries, Pl,240,650.
30 Vincent Fabella withdrew P250,000.

Required:

1. Enter the amounts from the November 2019 trial balance into the appropriate
ledger accounts.

2. Prepare the journal entries for the December transactions.

3. Post the entries to the ledger using page 12 as the journal page reference.

4. Prepare a trial balance as at Dec. 31, 2019.

5. Prepare an income statement and a statement of changes in equity for the year
ended Dec. 31, 2019, and a balance sheet as at Dec. 31, 2019 (Note: The
accomplishm ent of this requirement may be deferred).
 Reco rding Business Transactions I 3-61

~ E:

l
SCORE:
~N:
~ PROFESSOR:

problem #17
Journalizing, Posting and Preparing a Trial Balance

Winnie Villa nuev a is a pain ting cont racto r. During the

mon th of April, she completed
the follo wing trans actio ns:

Apr. 2 Inve sted in the business paint ing equi pme nt valued at
P12,300 and
place d P71,000 in a business checking account.
3 Acqu ired a service vehicle costing P80,000. Paid PS0,0
00 cash and
signe d a note for the balance.
4 Purchased pain ting supplies on account for P3,200.
5 Com plete d a pain ting job and billed the customer P4,80
0.
7 Received Pl,50 0 cash for paint ing an apar tmen t room.
10 Purchased pain ting supplies for Pl,60 0 cash.
11 Received a P4,800 check from the customer billed on April
5.
12 Paid P4,000 for an insurance policy for a one-year cove
rage.
13 Bille d a cust ome r P6,200 for a painting job.
14 Paid the assis tant Pl,50 0 for twen ty-fiv e hours' work.
15 Paid P400 for a tune -up of the service vehicle.
18 Paid for the pain ting supplies purchased on April 4.
Purc hase d a new ladd er for PG,000 and paint ing supplies
20 for P2,900,
on acco unt.
Received a telep hone bill for PGOO, due next mon th.
22
Received P3,300 in cash from the customer billed on April
23 13.
Tran sferr ed P3,000 to a personal checking a<::count.
24
Received P3,600 in cash for paint ing a two- room apar tmen
25 t.
Paid P2,0 00 on the note signed for the service vehicle.
27
Paid the assis tant Pl,80 0 for thirty hours' work.
29

Required:
1. Prepare the journ al entries to record the April transactions.
2. Set-up the follo wing ledger accounts and post all the
journal entries: Cash;
Accounts Receivable; Painting Supplies; Prepaid Insurance
; Painting Equipment;
Service Vehicle; Notes Payable; Accounts Payable; Villan
ueva, Capital; Villanueva,
With draw als; Painting Revenues; Wages Expense;
Utilities Expense; and
Main tena nce Expense.

3. Prep are a trial balance.

 .:5- bL I t3as,c J- 1nanc1a1A ccoun tin g and Reporting b y Prof. WIN 1301/aaa

I NAME:
I SECTION:
l SCORE:
PROFESSOR:
3
Problem #.18
Effects of Errors on the Trial Balance

Which of t he following errors wou ld cau se a trial balance to have unequal totah?
Explain you r answ ers briefly. Be able to sta t e amou nt of t he error, if any,

a. A payment to a cred itor was recorded as a debit to Accounts Payabte for

P12 ,900 and as a credit to Cash for Pl0,200.
b. A payment of PlS,000 to a creditor for an account payable was debited to
Accounts Receivable and credited to Cash .
c. A purchase of office supplies of P42,000 in cash was recorded as a deb,t tr;
Office Supplies for P4,200 and as a credit to Cash for P4,200.
d . A purchase of equipment for P45,000 in cash was recorded as a debit to
Supplies for P45,000 and as a credit to Cash for P45,000.

Problem #19
Effects of Errors on the Trial Balance

The following errors occurred in posting transactions from the journal to the ledger:

1. A payment of Pl, 700 for advertising was posted as a Pl, 700 debit to
advertising expense and a P7,100 credit to cash .
2. The receipt of P3,000 from a client on account was posted as a P3,000
debit to cash and a P3,000 credit to sales .
3. The purchase of supplies on account for Pl,400 was posted twice as a
debit to supplies and once as a credit to accounts payable .
4. The payment of P2,200 to a creditor on account was posted as a credit
to accounts payable for P2,200 and a cred it to ca sh for P2 ,200.

For each of these errors, determ ine th e foJlowing;

a. Is the trial balance out of balance?

b. If out of balance, what is the difference between the col umn totals?
c. Which column total is larger?
 3-63
... ~~ - ~-----=- -~ Recording Business Transactions

NAME: SCORE:
SECTION: PROFESSOR:

problem #20
Effects of Errors on the Trial Balance

The trial balance prepare d by Glen De Leon -Consulting as at Sept. 30, 2020 was not in
balance. In searching for the error, an employee discovered that a transaction for the
purchase of a typewr iter on credit for PG,100 has been recorded by a debit of PG,100 to
the Office Equipm ent accoun t and a debit of PG,100 to Accounts Payable. The credit
column of the incorre ct trial balance had a total of P926,000.

a. Was the Office Equipm ent account overstated, understated, or correctly

stated in the trial balance?

b. Was the total of the debit column of the trial balance overstated,
unders tated, or correct ly stated?

c. Was the Accoun ts Payable account overstated, understated, or correctly

stated in the trial balance?

d. Was the total of the credit column of the trial balance overstated,
unders tated or correct ly stated?

e. How much was the total of the debit column of the trial balance before
correct ion of the error?

, Required:
Explain briefly the reasons underly ing your answer and state the amount of the error, if

any.
 3 -54 I Ba.sic Financial Accounting and Reporting by F>ro_f. WIN Bal/:ado

INAME:
SECTION:
SCORE:
' PROf ESSOR: =
Problem #21
Correcting a Trial Balance

The June 2020 t rial balance for Davao Duplicators1 owned by Allan Brillantes ~
presented below. The regular bookkeeper has resigned and left the f ollowing hiai
balance. It did not balance.
Davao Duplicators
Trial Balance
June 30, 2020

Cash P 44,800
Accounts Receivable 189,600
Supplies 70,800
Equipment 560,000
Accounts Payable P 72,600
Brillantes, Capita l 513,000
Brillantes, Withdrawals 50,000
Revenues 371,600
Salaries Expense 35,000
Rent Expense 10,000
Utilrties Expense 6,400
Totals P916,600 Pl,017,200

Upon reviewing the trial balance and the process of transferring the amounts in the
ledger accounts to the trial balance, two errors were discovered:
a. The debit column in the trial balance was footed incorrectly.
b. The balance in the accounts payable ledger account of P62, 700 was transferred as Pn,600.

When the balances of the ledger accounts were re,computed, two more errors were
discovered:
c. The Utilities Expense account balance was overstated by Pl,800.
d. The total debits in the Cash account amounted to P184,600 and t he credits totaled
P149,800.

Discovered four more errors when postings were retraced from the j ournal to the
ledger:

e. A debit posting to Accounts Receivable in the amount of PS2,000 should have been P5t200-
f. A debit posting to Accounts Payabfe for P461000 was missing.
g. A credit posting to Revenues in the amount of P7,600 was missing.
h. A credit of P31,000 was posted to Accounts Payable rath er than P30,100.

Req1.1ired: Prepare a corrected trial balance.