Practice Problem 11.0: Name Date Course/Year Score

Completing the Accounting Cycle for a Name Date
Service Provider
PRACTICE PROBLEM 11.0 Course/Year Score
The Siesta Motel opened for business on July 1, of the current year. Its trial balance before adjustment
on July 31 contained the following accounts:
Debit Credit
Cash Accounts payable
Prepaid insurance Unearned rent revenue
Supplies Loan payable
Furniture Jullina Bautista, capital
Lodge Rent revenue
Land
Salaries expense
Utilities expense
Advertising expense
The following transactions were completed during the month of July.
1 The owner invested cash ₱270,000, land ₱750,000, and lodge ₱3,500,000 in the business.
The lodge was ready for occupancy on July 1 with a 25-year estimated useful life and
₱200,000 residual value.
1 Borrowed money from a bank ₱1,750,000 at 12% per annum; principal and interest due on
December 31.
1 Bought furniture for ₱965,000 with a 10-year estimated useful life and ₱65,000 residual
value.
2 Paid ₱90,000 for a nine-month term insurance policy beginning July 1.
5 Bough supplies on account ₱210,000.
10 Incurred ₱25,000 of advertising cost on account.
15 Paid electricity and water bill for ₱50,000.
18 Received ₱180,000 from customers for future service.
25 Received ₱460,000 cash from various customers.
31 Paid employee’s salary ₱150,000.
Other data:
1. An inventory of supplies shows ₱182,500 of unused supplies on July 31.
2. Unearned rent of ₱75,000 has been earned on July 31.
Required:
a. Journal entries
b. Ledger accounts
c. Trial balance
d. Adjusting entries
e. Adjusted trial balance
f. Six-column worksheet
Service Provider
Answer Sheet
General Journal
Date Account titles Debit Credit
July 1 Cash 270,000
Land 750,000
Lodge 3,500,000
Jullina Bautista, capital 4,520,000
1 Cash 1,750,000
Loan payable 1,750,000
1 Furniture 965,000
Cash 965,000
2 Prepaid insurance 90,000

Cash 90,000
5 Supplies 210,000
Accounts payable 210,000
10 Advertising expense 25,000

Accounts payable 25,000
15 Utilities expense 50,000

Cash 50,000
18 Cash 180,000
Unearned Rent revenue 180,000
25 Cash 460,000
Rent revenue 460,000
31 Salaries expense 150,000

Cash 150,000
Adjusting entries
July 31 Insurance expense 10,000

Prepaid insurance 10,000
~ 1 month expired insurance ~
31 Supplies expense 27,500

Supplies 27,500
~ supplies expense for the month of July ~
Service Provider
31 Depreciation expense – lodge 11,000

Accumulated depreciation – lodge 11,000
~ depreciation of lodge ~
31 Depreciation expense – furniture 7,500

Accumulated depreciation – furniture 7,500
~ depreciation of furniture ~
31 Interest expense 17,500

Interest payable 17,500
~ 1 month interest expense from loan payable ~
31 Unearned rent revenue 75,000

Rent revenue 75,000
~ earned rent revenue ~
Answer sheet
Ledger
Cash Prepaid insurance Supplies Furniture

Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
270,000 965,000 90,000 10,000 210,000 27,500 965,000
1,750,000 90,000 --------- ---------
180,000 50,000 80,000 182,500
460,000 150,000
--------- ---------
2,660,000 1,255,000
--------- ---------
1,405,000
Accumulated dep. – Accumulated dep. –

furniture Lodge lodge Land
7,500 3,500,000 11,000 750,000
Service Provider
Unearned rent
Accounts payable Interest payable revenue Loan payable
210,000 17,500 75,000 180,000 1,750,000
25,000 ----------
----------- 105,000
235,000
Jullina Bautista, capital Rent revenue Salaries expense Utilities expense

4,520,000 460,000 150,000 50,000
75,000
----------
535,000
Advertising expense Insurance expense Supplies expense Interest expense

25,000 10,000 27,500 17,500
Depreciation - furniture Depreciation - lodge

7,500 11,000
Service Provider
Siesta Motel
Work Sheet
July 31, _____
Trial Adjusted
Account titles Balance Adjustments Trial Balance
Debit Credit Debit Credit Debit Credit
Cash 1,405,000 1,405,000
Prepaid insurance 90,000 10,000 80,000
Supplies 210,000 27,500 182,500
Furniture 965,000 965,000
Lodge 3,500,000 3,500,000
Land 750,000 750,000
Accounts payable 235,000 235,000
Unearned rent revenue 180,000 75,000 105,000
Loan payable 1,750,000 1,750,000
J. Bautista, capital 4,520,000 4,520,000
Rent revenue 460,000 75,000 535,000
Salaries expense 150,000 150,000
Utilities expense 50,000 50,000
Advertising expense 25,000 25,000
Totals 7,145,000 7,145,000
Insurance expense 10,000 10,000
Supplies expense 27,500 27,500
Depreciation expense – lodge 11,000 11,000
Accumulated dep. – lodge 11,000 11,000
Depreciation expense – furniture 7,500 7,500
Accumulated dep. – furniture 7,500 7,500
Interest expense 17,500 17,500
Interest payable 17,500 17,500
Totals 148,500 148,500 7,181,000 7,181,000

Practice Problem 11.0: Name Date Course/Year Score

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Practice Problem 11.0: Name Date Course/Year Score

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Completing the Accounting Cycle for a Name Date

The following transactions were completed during the month of July.

2 Prepaid insurance 90,000

10 Advertising expense 25,000

15 Utilities expense 50,000

31 Salaries expense 150,000

July 31 Insurance expense 10,000

31 Supplies expense 27,500

31 Depreciation expense – lodge 11,000

31 Depreciation expense – furniture 7,500

31 Interest expense 17,500

31 Unearned rent revenue 75,000

Cash Prepaid insurance Supplies Furniture

Accumulated dep. – Accumulated dep. –

Jullina Bautista, capital Rent revenue Salaries expense Utilities expense

Advertising expense Insurance expense Supplies expense Interest expense

Depreciation - furniture Depreciation - lodge

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