JOURNALIZING ENTRIES

Dec 1 Automobile P200,000

Cash P200,000 Dec 6 Salaries Expense P65,000
Cash P65,000
Dec 2 Cash P50,000
Sales P50,000 Dec 7 Cash P98,000
Sales Discount P2,000
Dec 2 Freight-out P2,500 A/R P100,000
Cash P2,500
Dec 8 Prepaid Rent P25,000
Dec 3 A/R P100,000 Cash P25,000
Sales P100,000
Dec 9 Supplies P15,000
Dec 4 Purchases P10,000 A/P P15,000
A/P P10,000
Dec 10 A/P P10,000
Dec 5 Purchases P15,000 Cash P10,000
Cash P15,000

CASH RECEIPTS JOURNAL

Date OR no. Description DE BIT CRE DIT OTHER ACCOUNTS
Cash Sales Discount Sales Accounts Receivable Debit Credit
Dec 2 #3 P50,000 P50,000
Dec 7 P98,000 P2,000 P100,000

CASH DISBURMENTS JOURNAL

Date Check no. Description OTHER ACCOUNTS DE BIT CREDIT
Debit Credit Accounts Payable Purchases Cash
Dec 1 #5 Automobile P200,000 P200,000
Dec 2 #10 Freight-out P2,500 P2,500
Dec 5 #15 P15,000 P15,000
Dec 6 #20 Salaries Expense P65,000 P65,000
Dec 8 #25 Prepaid Rent P25,000 P25,000
Dec 10 P10,000 P10,000

PURCHASES JOURNAL
Date Account Debited Terms Dr. Purchases
Cr. Accounts Payable
Dec 4 DEZ 3/5, n/30 P10,000
Dec 9 Supplies P15,000

SALES JOURNAL
Date Account Debited Invoice no. Dr. Accounts Receivable
Cr. Sales
Dec 3 KM Company #4 P100,000

NOTES:
Shipping Point (Freight-in) – Buyer
Destination (Freight-out) – Seller
BUYER SELLER

1. Purchase 1. Sales
Purchase xxx Accounts Receivable xxx
Accounts Payable xxx Sales xxx

2. Purchases Returns and Allowances (PRA) 2. Sales Returns and Allowances (SRA)
Accounts Payable xxx Sales Returns and Allowances xxx
PRA xxx Accounts Receivable xxx

3. Purchase Discount 3. Sales Discount

Accounts Payable xxx Cash xxx
Purchase Discount xxx Sales Discount xxx
Cash xxx Accounts Receivable xxx

4. Freight in 4. Freight out

Freight in xxx Freight out xxx
Cash xxx Cash xxx
__________________________________________________________________________________________________

INCOME TAXATION
Annual Per Year
INCOME BRACKET TAX ON LOWER LIMIT TAX ON EXCESS OVER
Lower Limit Upper Limit LOWER LIMIT
0 P250,000 0 0%
P250,000 P400,000 0 20%
P400,000 P800,000 P30,000 25%
P800,000 P2,000,000 P130,000 30%
P2,000,000 P8,000,000 P490,000 32%
P8,000,000 Above P2,410,000 35%

TAX DUE = Tax on Lower Limit + [(Annual Taxable Income – Lower Limit) x Tax on excess over limit]

Example: Finding the Tax Due Example:

= 0 + [(P350,000 - P250,000) x 20%] = P30,000 + [(P450,000 – P400,000) x 25%]
= 0 + (P100,000 x 20%) = P30,000 + (P50,000 x 25%)
= 0 + P20,000 = P30,000 + P12,500
= P20,000 > Tax due for the whole year = P42,500 > Tax due for the whole year

Example: Finding the Annual Taxable Income (Work back)

= [(Tax due – Tax on lower limit) / Tax on excess over lower limit] + Lower limit
= [(P42,500 – P30,000) / 25%] + P400,000
= (12,500 / 25%) + P400,000
= P50,000 + P400,000
= P450,000 > Annual Taxable Income
Example: Finding the Annual Taxable Income
Gross Compensation Income xxx
Statutory Payments (GSIS, SSS, PAGIBIG/HDMF, PhilHealth) (xxx)
Tax Exempt 13th month (xxx)
Bonuses (xxx)
Tax withheld (xxx)
Annual Taxable Income xxx

Example: Finding the Annual Taxable Income

Gross Compensation Income P700,000
Statutory Payments (GSIS, SSS, PAGIBIG/HDMF, PhilHealth) (P10,000)
Tax Exempt 13th month (P5,000)
Bonuses (P5,000)
Tax withheld (P10,000)
Annual Taxable Income P670,000

Finding the Tax Due

= P30,000 + [(P670,000 – P400,000) x 25%]
= P30,000 + (P270,000 x 25%)
= P30,000 + P67,500
= P97,500 > Tax due for the whole year

BANK RECONCILIATION
Problem 1
Bank Book
Unadjusted Balance P1,805,000 Unadjusted Balance P1,925,000
Deposit in Transit P325,000 NSF (P60,000)
Outstanding Checks (P275,000) Debit Memo (P10,000)
Adjusted Balance P1,855,000 Adjusted Balance P1,855,000

Problem 2
Bank Book
Unadjusted Balance P1,010,000 Unadjusted Balance P1,000,000
Outstanding Checks (P235,000) Debit Memo (P3,000)
Deposit in Transit P300,000 Credit Memo P375,000
Adjusted Balance P1,075,000 Credit Memo P15,000
NSF (P62,000)
Debit Memo (P250,000)
Adjusted Balance P1,075,000

NOTES:
Reconciling on the bank side
(-) Oustanding checks – mga checke na inissue ng kompanya sa supplier (kaya nalista na ni book side) pero hindi pa
naeencash ng supplier sa banko, kaya dapat mabawasan ng pera si banko
(+) Deposit in Transit – mga checke na matatanggap ng kompanya, nailista na sa book side pero hindi pa nalista ng
banko kasi nasaraduhan o naideposit ng kompanya sa banko after ng cut-off time, kaya dapat
madagdagan ng pera si banko
Errors – mga pagkakamali ni banko kaya dapat iadjust ni banko (depende sa pagkakamali kung magdadagdag o
magbabawas)

Reconciling on the book side

(+) Credit Memo – mga kita o pera na pumasok sa banko pero hindi aware ang kompanya na may pumasok na pera,
kaya kailangan magdagdag ng pera sa book side. Ex: interest income, collections made by bank,
collections from the customer, interest on cutomer
(-) Debit Memo – mga nabawas sa banko pero hindi aware ang kompanya o book side na nabawasan siya ng pera dahil
diretso yung bawas sa banko kaya kailangan magbawas ng pera sa book side. Ex: interest
expense, bank service charge, depositor’s payment to the note payable charge on account
(-) NSF chekcs – mga checke na natanggap mo kaya dineposit ng book side o ng kompanya pero wala palang laman yung
banko non, kaya hindi tinanggap ng banko, kaya yung dineposit na pera ng book side kailangan
ibawas dahil nga di tinanggap ni banko.
Errors – mga pagkakamali ni kompanya o book side kaya dapat iadjust ni kompanya o book side (depende sa
pagkakamali kung magdadagdag o magbabawas)