Module 1 & 2 Activity

Prepare the following:

1. Journalizing and posting adjusting entries.
2. Worksheet
3. Financial Statement
a. Income Statement
b. Changes in Owner’s Equity
c. Balance Sheet
May 1 Maria Conception Jennifer Perez-Manalo is a social entrepreneur from the south. She is into a
lot of interesting causes. Her fine taste is preeminent such that she is considered an authority in planning
weddings. Upon the advice and prodding of an esteemed colleague, Bendalyn Landicho, Perez-Manalo
decided to organize her wedding consultancy. She invested P250,000 into this entity.
May 1 Rented office space and paid two-months’ rent in advance, P8 000.
May 2 Maria Conception Jennifer Perez-Manalo issued a promissory note for a P210,000 loan from
Metrobank. This availment will be used for the acquisition of a service vehicle. The note carries a 20%
interest per annum. The arrangement with the bank is that both the interest and the principal are payable
in full in one year.
May 2 Hired an office assistant and an account executive each with a P7,800 monthly salary. Or, each is
to receive P300 per day for the 26-day work month. They started work immediately.
May 4 Acquired service vehicle for P420,000
May 4 Paid prudential Guarantee and Assurance, Inc. P14,400 for a one-year comprehensive insurance
coverage on the service vehicle.
May 5 Acquired office equipment from Fair and Square Emporium for P60,000, paying P15,000 in cash
and the balance next month.
May 8 Purchased supplies on credit for P18,000 from San Jose Merchandising
May 9 Paid San Jose Merchandising P10,000 of the amount owed
May 10 Coordinate and finalized simple bridal arrangements for three couples and collected fees of
P8,800 per couple. Services include prospecting and selecting the church and reception location,
couturier, caterer, car service, flowers, souvenirs, and invitations
May 13 Paid salaries, P6,600. The entity pays salaries every two Saturdays.
May 15 The entity is earning additional revenues by referring consulting clients to friendly hotels,
caterers, printers, and couturiers. Received P10,000 advance fees for three clients referred
May 19 Coordinate and finalized elaborate bridal arrangements for three couples and billed fees of
P12,000 per couple. Additional services include documents preparation, consultation with a feng shui
expert as to the ideal wedding date for prosperity and harmony, provision for limousine service and
honeymoon trip.
May 25 Perez-Manalo withdrew P14,000 for personal expenses.
May 27 Paid salaries, P7,200.
May 30 Received the ICC-BayanTel telephone bill, P1,400.
May 30 Received P24,000 from two clients for services billed last May 19.
May 31 Settled the electricity bill of P3,000 for the month.

Wedding "R" Us
Unadjusted Trial Balance
May 31, 2019

Debit Credit
Cash 22,200
Accounts Receivable 12,000
Supplies 18,000
Prepaid Rent 8,000
Prepaid Insurance 14,400
Service Vehicle 420,000
Office Equipment 60,000
Accounts Payable 53,000
Notes Payable 210,000
Utilities Payable 1,400
Unearned Referral Revenues 10,000
Perez-Manalo, Capital 250,000
Perez-Manalo, Drawing 14,000
Consulting Revenue 62,400
Salaries Expense 13,800
Utilities Expense 4,400
586,800 586,800

Adjustments:
Deferrals:
On May 1 Weddings “R” Us paid P10,000 for two months’ rent in advance. This expenditure resulted to
an asset consisting of the right to occupy the office for two months. A portion of the asset expires and
become an expense each day. By May 31, one-half of the asset expires and becomes expense.
Weddings “R” Us acquired a one-year comprehensive insurance coverage on the service vehicle and paid
P14, 400 premiums. In a manner similar to prepaid rent, prepaid insurance offers protection that expires
daily.
On May 5, Company ABC purchased supplies, P12, 000. At the end of the accounting period, the owner
makes a careful physical inventory of the supplies. The inventory count showed that supplies costing P9,
000 are still on hand.
Suppose that Weddings “R” Us estimated that the service vehicle, which was bought on March 4 for will
last for 7 years (84 months) and with salvage value of P84 000.
The office equipment that was acquired on May 5 for P60 000 will have a useful life of five years (60
months) and will be worthless by that time.

On May 15, Weddings “R” Us received P10, 000 as an advance payment. Assume that by the end
of the month, one of the three couples has already taken the service and as a result the amount of
P4 000 pertaining to the event has been realized.
Accruals:
Weddings “R” Us pay salaries every two Saturdays. Use the calendar for May 2017. The employees were
paid salaries on May 13 and 27. At month-end, the employees have worked for three days beyond the last
period.
On May 2, Perez Manalo, borrowed P210 000 from Metrobank. She issued a promissory note that carried
a 20% interest per annum. Both the interest and principal will be payable in one year. (Note: May 2-31 is
considered a month).
Suppose that Weddings “R” Us agreed to arrange a rush but simple wedding in the afternoon of May 31.
The entity intended to charge fees of P5 300 for the services, which is earned but unbilled.