TRANSACTIONS (2018)

Oct. 1 Mr. Cruel invested P250,000 cash in an accounting firm called Cruel
Accounting & Tax Services.
1 Purchased office equipment costing P50,000 by signing a 3-month, 12%,
P50,000 note payable.
2 Mr. Cruel received P60,000 cash advance from R. Mesina, a client, for
bookkeeping services that are expected to be completed by December 31.
3 Mr. Cruel paid office rent for October in cash, P15,000.
4 Mr. Cruel paid P30,000 for a one-year insurance policy that will expire
next year on September 30.
5 Mr. Cruel purchased an estimated 3-month supply of office materials on
account from Franco Supply for P25,000.
9 The firm hired four employees to begin work on October 15. Each
employee is to receive a weekly salary of P5,000 for a 5-day work week,
payable every 2 weeks – first payment on October 26.
20 Mr. Cruel withdrew P25,000 for personal use.
26 Mr. Cruel paid P40,000 to its employees (see October 9 event).
31 Mr. Cruel receives P200,000 in cash from Ravela Company for
bookkeeping and taxation services performed in October.
 GENERAL JOURNAL
Date Account Title & Explanation PR Debit
Oct. 1 Cash 101 250,000.00
Cruel's Capital 301
to record investment to business

1 Equipment 157 50,000.00

Notes Payable 200
to record purchase of equipment on account

2 Cash 101 60,000.00

Unearned Service Revenue 209
to record advance payment for service

3 Rent Expense 729 15,000.00

Cash 101
to record payment of rent

4 Prepaid Insurance 130 30,000.00

Cash 101
to record pre-payment of insurance

5 Supplies 126 25,000.00

Accounts Payable 201
to record the purchase of supplies on account

20 Cruel's Drawings 306 25,000.00

Cash 101
to record owner's withrawals

26 Salaries and Wages Expense 726 40,000.00

Cash 101
to record paid Salaries and Wages payable

31 Cash 101 200,000.00

Service Revenue 400
to record cash recieved in service
PAGE 1
Credit

250,000.00

50,000.00

60,000.00

15,000.00

30,000.00

25,000.00

25,000.00

40,000.00

200,000.00
 GENERAL LEDGER
CASH 101 UNEARNED SERVICE REVENUE
Debit Credit Debit Credit
Oct. 1 250,000.00 15,000.00 Oct. 3 60,000.00
Oct. 2 60,000.00 30,000.00 Oct. 4 20,000.00 60,000.00
Oct. 31 200,000.00 25,000.00 Oct. 20 40,000.00
40,000.00 Oct. 26
510,000.00 110,000.00 CRUEL'S CAPITAL
400,000.00 Debit Credit
250,000.00
250,000.00
25,000.00 149,250.00
SUPPLIES 126 374,250.00
Debit Credit
Oct. 5 25,000.00 CRUEL'S DRAWINGS
25,000.00 10,000.00 Debit Credit
15,000.00 Oct. 20 25,000.00
25,000.00 25,000.00
PREPAID INSURANCE 130 0
Debit Credit
Oct. 4 30,000.00 SERVICE REVENUE
30,000.00 2,500.00 Debit Credit
22,500.00 200,000.00
200,000.00
20,000.00
EQUIPMENT 157 10,000.00
Debit Credit 230,000.00 230,000.00
Oct. 1 50,000.00 0
50,000.00
SALARIES AND WAGES EXPENSE
ACCOUNS PAYABLE 201 Debit Credit
Debit Credit Oct. 9 40,000.00
25,000.00 Oct. 5 Oct. 26 40,000.00
25,000.00 12,000.00
52,000.00 52,000.00
NOTES PAYABLE 200 0
Debit Credit
50,000.00 Oct. 1 RENT EXPENSE
50,000.00 Debit Credit
Oct. 3 15,000.00
15,000.00 15,000.00
0
ACCOUNTS RECEIVABLE 112 DEPRECIATION EXPENSE
Debit Credit Debit Credit
10,000.00 750.00
10,000.00 750.00 750.00
0
INTEREST PAYABLE 230
Debit Credit ACCUMULATED DEPRECIATION
500.00 Debit Credit
500.00 750.00
750.00
SUPPLIES EXPENSE 631
Debit Credit INSURANCE EXPENSE
10,000.00 Debit Credit
10,000.00 10,000.00 2,500.00
0 2,500.00 2,500.00
0
INCOME SUMMARY
Debit Credit INTEREST EXPENSE
80,750.00 230,000.00 Debit Credit
149,250.00 500.00
230,000.00 230,000.00 500.00 500.00
0 0

SALARIES AND WAGES PAYABLE

Debit Credit
12,000.00
12,000.00
 209

Oct. 2

301

Oct. 1

306

400

Oct. 31

726

729
711

158

722

905

212
 CRUEL ACCOUNTING & TAX SERVICES
Trial Balance
October 31, 2018

Account Title Ref. Debit Credit

Cash 101 400,000.00
Supplies 126 25,000.00
Prepaid Insurance 130 30,000.00
Equipment 157 50,000.00
Accounts Payable 201 25,000.00
Unearned Service Revenue 209 60,000.00
Notes Payable 200 50,000.00
Cruel's Capital 301 250,000.00
Cruel's Drawings 306 25,000.00
Service Revenue 400 200,000.00
Salaries and Wages Expense 726 40,000.00
Rent Expense 729 15,000.00
Totals 585,000.00 585,000.00
 GENERAL JOURNAL

Date Account Title and Explanation Ref. Debit

Oct. 31 Supplies Expense 631 10,000.00
Supplies 126
To record used supplies.

31 Insurance Expense 722 2,500.00

Prepaid Insurance 130
To record expired insurance.

31 Depreciation Expense 711 750.00

Accumulated Depreciation- Equipment 158
To record depreciation.

31 Unearned Service Revenue 209 20,000.00

Service Revenue 400
To record earned revenue.

31 Accounts Receivable 112 10,000.00

Service Revenue 400
To record accrued revenue.

31 Interest Expense 905 500.00

Interest Payable 230
To record accrued interest expense.

31 Salaries and Wages Expense 726 12,000.00

Salaries and Wages Payable 212
To record accrued salaries and wages.
PAGE 2

Credit -

10,000.00

2,500.00

750.00

20,000.00

10,000.00

500.00

12,000.00
 CRUEL ACCOUNTING & TAX SERVICES
Adjusted Trial Balance
October 31, 2018

Account Title Ref. Debit Credit

Cash 101 400,000.00
Supplies 126 15,000.00
Prepaid Insurance 130 27,500.00
Equipment 157 50,000.00
Accounts Payable 201 25,000.00
Unearned Service Revenue 209 40,000.00
Notes Payable 200 50,000.00
Cruel's Capital 301 250,000.00
Cruel's Drawings 306 25,000.00
Service Revenue 400 230,000.00
Salaries and Wages Expense 726 52,000.00
Rent Expense 729 15,000.00

Adjustments
Accounts Receivable 112 10,000.00
Salaries and Wages Payable 212 12,000.00
Interest Payable 230 500.00
Supplies Expense 631 10,000.00
Insurance Expense 722 2,500.00
Interest Expense 905 500.00
Depreciation Expense 711 750.00
Accumulated Depreciation 158 750.00

Php 608,250.00 Php 608,250.00

 GENERAL JOURNAL

DATE ACCOUNT TITLE AND EXPLANATION Ref.

Service Revenue 400
Income summary 350
to close sales revenvue account to income summary

Income summary 350

Supplies Expense 631
Depereciation Expense 711
Insurance Expense 722
Salaries and Wages expense 726
Rent expense 729
Inerest Expense 905
to close expense accounts to income summary

Income summary 350

Cruel's Capital 301
to close capital account to income summary

Cruel's Capital 301

Cruel's Drawing 306
to close withdrawal with capital account
 PAGE 3

DEBIT CREDIT
230,000.00
230,000.00

80,750.00
10,000.00
750.00
2,500.00
52,000.00
15,000.00
500.00

149,250.00
149,250.00

25,000.00
25,000.00
 CRUEL ACCOUNTING & TAX SERVICES
Post-Closing Trial Balance
October 31, 2018

Account Title Ref. Debit Credit

Cash 101 400,000.00
Supplies 126 15,000.00
Prepaid Insurance 130 27,500.00
Equipment 157 50,000.00
Accounts Payable 201 25,000.00
Unearned Service Revenue 209 40,000.00
Notes Payable 200 50,000.00
Cruel's Capital 301 374,250.00

Adjustments
Accounts Receivable 112 10,000.00
Salaries and Wages Payable 212 12,000.00
Interest Payable 230 500.00
Accumulated Depreciation 158 750.00

Php 502,500.00 Php 502,500.00

 CRUEL ACCOUNTING & TAX SERVICES
Statement of Comprehensive Income
For the Month Ended October 31, 2018

Service Revenue Php 230,000.00

Less: Operating Expenses
Salaries and Wages Expense Php 52,000.00
Rent Expense 15,000.00
Supplies Expense 10,000.00
Depreciation Expense 750.00
Insurance Expense 2,500.00
Interest Expense 500.00 80,750.00
Net Income Php 149,250.00
 CRUEL ACCOUNTING & TAX SERVICES
Owner’s Equity Statement
For the Month Ended October 31, 2018

Cruel's Capital, Beginning Php 250,000.00

Add: Net Income Php 149,250.00
Less: Cruel's Drawings (25,000.00) 124,250.00
Cruel's Capital, Ending Php 374,250.00
 CRUEL ACCOUNTING & TAX SERVICES
Statement of Financial Position
As of October 31, 2018

CURRENT ASSETS
Cash Php 400,000.00
Accounts Receivable 10,000.00
Supplies 15,000.00
Prepaid Insurance 27,500.00
NON-CURRENT ASSETS
Equipment Php 50,000.00
Accumulated Depreciation-Equipment (750.00) 49,250.00
Total Assets Php 501,750.00

LIABILITIES
Accounts Payable Php 25,000.00
Salaries and Wages Payable 12,000.00
Interest Payable 500.00
Unearned Service Revenue 40,000.00
Notes Payable 50,000.00
Total Liabilities Php 127,500.00

EQUITY
Cruel's Capital 374,250.00
Total Equity Php 374,250.00

Total Liabilities and Equity Php 501,750.00