ACC101 Fundamentals of Accounting

I. Reece Repair Services, which specializes in appliance repair services, is owned and operated by Joni
Reece. Reece Repair Services’ accounting clerk prepared the unadjusted trial balance at July 31, 2014
shown below:

Reece Repair Services

Unadjusted Trial Balance
July 31, 2014

Debit Credit

Cash 10,200

Accounts Receivable 34,750

Prepaid Insurance 6,000

Supplies 1,725

Land 50,000

Building 155,750

Accumulated Depreciation - Building 62,850

Equipment 45,000

Accumulated Depreciation - Equipment 17,650

Accounts Payable 3,750

Unearned Rent 3,600

Joni Reece, Capital 153,550

Joni Reece, Drawing 8,000

Fees Earned 158,600

Salaries and Wages Expense 56,850

Utilities Expense 14,100

Advertising Expense 7,500

Repairs Expense 6,100

Miscellaneous Expense 4,025

Totals 400,000 400,000

The data needed to determine year-end adjustments are as follows:

1. Depreciation of the building for the year, P6,400.

2. Depreciation of equipment for the year, P2,800.
3. Accrued salaries and wages at July 31, P900.
4. Unexpired insurance at July 31, P1,500.
5. Fees earned but unbilled on July 31, P10,200.
6. Supplies on hand at July 31, P615.
7. Rent unearned at July 31, P300.

Additional accounts to be used:

Salaries and Wages Payable

Rent Revenue
Insurance Expense
Depreciation Expense, Building
Depreciation Expense, Equipment
Supplies Expense

II. Closing entries

After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were
taken from the ledger of Green and Shine Landscaping Co.

Felix Mendoza, Capital P643,600 Wages Expense P283,100

Felix Mendoza, Drawing 10,500 Rent Expense 56,000
Fees Earned 356,500 Supplies Expense 11,500
Miscellaneous Expense
13,000
Journalize the closing entries.

III. Balance sheet

Labrador Weight Loss Co. offers a personal weight reduction consulting services to individuals. After all
the accounts have been closed on June 30, 2018, the end of the current fiscal year, the balance of
selected accounts from the ledger of Labrador Weight Loss Co. are as follows:

Accounts Payable P18,500 Prepaid Insurance P19,200

Accounts Receivable 78,250 Prepaid Rent 18,000
Accumulated Depreciation 103,300 Salaries Payable 8,500
Cash ? Shi Deng, Capital 609,000
Equipment 300,000 Supplies 5,350
Land 290,000 Unearned Fees 9,000

Prepare a classified balance sheet that includes the correct balance for Cash.
 IV. Income Statement

The following revenue and expense account balances were taken from the ledger of Veggie Health
Services Co. after the accounts have been adjusted on February 28, 2018, the end of the current fiscal
year.

Depreciation Expense P9,000 Service Revenue P270,900

Insurance Expense 4,000 Supplies Expense 3,000
Miscellaneous Expense 6,000 Utilities Expense 17,600
Rent Expense 42,000 Wages Expense 213,100

Prepare an income statement.

V. Statement of Owner’s Equity

Wella Systems Co. offers its services to residents in the Davao area. Selected accounts from the ledger
of Wella Systems Co. for the current fiscal year ended October 31, 2018 are as follows:

Wendy McGee, Capital Wendy McGee, Drawing

Oct. 31 48,000 Nov. 1 (2013) 475,000 Jan 31 12,000 Oc. 31 48,000
Apr. 30 12,000
Oct 31 90,000
July 31 12,000
Oct. 31 12,000
Income Summary
Oct. 31 270,000 Oct. 31 360,000
31 90,000

Prepare a Statement of Owner’s equity for the year.