Accounting Cycle for Service Business

Journalizing, Posting, and Preparing Trial Balance

Carla Raulo established a service business to be known as C. Raulo Photography on July 1, 2020. During the first month,
the following transactions occurred:

July 1 Carlo transferred cash of ₱300,000 from her personal bank account to an account to be used for her
business. She also invested the following: digital camera, ₱45,000; manual camera, ₱25,000; desktop
computer, ₱28,000; photo papers and ink, ₱14,000; and her personal debts evidenced by a note which
would be assumed by the business, ₱12,000.
July 4 Paid six-month advance rent to Cyrene Commercial Complex, ₱30,000.
July 6 Received a statement of account from Brian News for advertising this month, ₱5,500.
July 8 Bought photo enhancing and editing equipment from Mirzi Outlet for ₱40,000. Carla paid 30% down
payment and the balance on account.
July 12 Hired office assistant with a monthly salary of ₱6,000. The office assistant officially started on July 16,
2020.
July 13 Photography services rendered totaled ₱180,000. Terms: 25% cash and the balance settled on account.
July 14 Purchased office sofa set from Renzo Designs for$30,000 on account.
July 15 Paid various operating expenses during the month: Meeting potential clients, ₱4,000; Electricity, ₱23,000;
Telephone expense, ₱6,000; and Repairs expense, ₱2,500.
July 18 Photography services rendered totaled ₱180,000, of which 25% was settled with an interest-bearing note
and the balance on account
July 20 Received photography advances from a couple for a prenuptial coverage to be rendered next month,
₱60,000.
July 22 Collected 90% of the outstanding receivable from July 13 transaction.
July 24 Paid in full the statement of account received last July 6.
July 26 Paid 80% of the outstanding obligation to Mirzi Outlet and for the remaining balance, she issued an
interest-bearing note.
July 28 Paid half of the outstanding obligation to Renzo Designs.
July 31 Paid salary of the office assistant for 16 days, ₱3,097.

C. Raulo Photography uses the following account titles

Cash Notes Payable

Accounts Receivable Loan Payable
Notes Receivable Salaries Payable
Interest Receivable Raulo, Capital
Photography Supplies Raulo, Drawing
Prepaid Rent Photography Services Revenue
Furniture and Fixtures Advertising Expense
Photography Equipment Repairs Expense
Office Equipment Representation Expense
Delivery Vehicle Utilities Expense
Accounts Payable Insurance Expense
Advances from Clients Salaries Expense
Require:

1. Journalize the foregoing transactions.

2. Post the transactions in the ledger/T-account.
3. Prepare a trial balance.

Please write your answers on a yellow paper/bond paper/pad paper.