Professional Documents
Culture Documents
BOOKKEEPING
BBTLEDHE 1-1 Ms. Bautista
A. DISCUSSION QUESTIONS
1. Why is a journal considered the book of original entry?
Journal is known as books of original entry because in this book business transactions are initially
recorded.
2. How do you ensure the accuracy of the journal entries?
There are several ways to maintain accurate records. These include identifying revenue streams, keeping
track of invoices and receipts, preparing financial statements, tracking deductible expenses and preparing
tax returns.
3. Why is the ledger said to be the book of final entry?
The ledger is called the book of final entry because it is the book in which all the business transactions
would ultimately find their place.
4. How do you ensure the accuracy of posting of entries from journal to ledger?
To keep your records accurate, you should post to the general ledger as you make transactions. At the end
of each period (e.g., month), transfer journal entries into your ledger.
5. Why is pencil footing of the ledger accounts become important in preparing a trial balance?
Footings are commonly used in accounting to determine final balances to be put on financial statements.
6. How do you distinguish the two types of trial balance?
Trial balance of balances means the difference between the totals of debits and credits in each account.
Meanwhile, trial balance of totals contains the totals of both debit and credit in each account.
7. How do you correct errors when the trial balance is not balanced?
The easiest way to start is by retracing the trial balance steps. Look at the ledger balances and compare
them to the amount posted to the trial balance. If these numbers match, then once again add the debit and
credit columns. If the numbers do not change, then you can try the transposition trick.
B. J. Lopez, a young lawyer, completed the following transactions during the month of June, 2020 under the name: J.
LOPEZ LEGAL SERVICES
June 1 – Began the practice of law by investing the following to his law firm:
Cash P200,000; library books P150,000; and Office Furnitures P60,500.
2 – Bought Office equipment for P20,000 from Warehouse Office paying P10,000 cash and the balance on account.
3 – Bought office supplies to NBS for P15,000 and issue promissory note for the amount.
7 – Completed legal work for A. Cortes for 25,650 cash
9 – Paid insurance premium, P6,200 cash
10 – Billed Mr. G. Blanca for legal services rendered P8,200.
13 – Paid Salaries of the part-time secretary P5,000; space rent for P7,000
14 – Paid 1⁄2 of the account to Warehouse Office
15 – Collected P21,225 for legal works rendered to various customers
17 – Paid the following bills for the month: Telephone P1,320; Water P1,125, electricity P2,450
20 – Paid NBS in full plus interest of the note, P150.
25 – Withdrew P5,000 cash for personal use
27 – Bought additional office supplies for P18,420 to NBS issuing a promissory note.
27 – Collected 1⁄2 of Mr. G. Blanca’s account
30 – Paid salaries of secretary for P5,000 cash
30 – Rendered legal services to various customers, receiving P12,650 cash and P10,850 on Account.
Directions:
1. Journalize the above transactions using a pro-forma journal (in an excel program).
2. Post the journal entries using excel pro-forma ledgers (use an excel program).
3. Pencil foot all ledger accounts.
4. Prepare a Trial Balance of Balances.
5. Print and submit all your works.
DATE
DESCRIPTION P/R DEBIT CREDIT
2020
June 1 Cash 200 000.-
Library Books 150 000.-
Office Furnitures 60 500.-
Mr. J Lopez, Capital 410 500.-
Invested the following to his law firm.
7 Cash 25 650.-
Legal Service Income 25 650.-
Completed legal work for a customer.
PAGE 2
PAGE 3
27 Cash 4 100.-
Accounts Receivable 4 100.-
Collected ½ of Mr. G Blanca’s account.
A. DISCUSSION QUESTIONS
1. Why is worksheet important to the preparation of financial statements?
The main objective of the worksheet is to verify the accuracy of accounting information before the
preparation of financial statements.
2. Describe each three basic financial statement.
The income statement is the summary of the business’ profit and losses during a period whether monthly,
quarterly or semi-annually or annually.
The capital statement is the financial report that summarizes all the changes in owner’s equity that
occurred during a specific period.
The balance sheet shows what the business own and owed by breaking down the assets, liabilities and
equity.
3. Explain the relationship between the three basic financial statements.
The financial statements are a collection of business’ financial information. It includes line-by-line items
as well as total amounts of what stakeholders are looking for. Each type of financial statement reports
varying information during a period to give insights of the business’ financial health.
B. Classify the account titles/word as to what financial statement they can be found. Write IS for Income Statement; CS
for Capital Statement and BS for Balance Sheet on the blanks provided before the number.
IS 1. Advertising Expense CS 11. Land
BS 2. Notes Payable IS 12. Unearned service
BS 3. Building IS 13. Rent Expense
BS 4. Notes Receivable IS 14. Interest Income
BS 5. Accounts Payable CS 15. Mr. V, Capital
IS 6. Service Fees earned BS 16. Office supplies
BS 7. Cash in Bank CS 17. Net Loss
CS 8. Mr. V, Personal BS 18. Store Equipment
BS 9. Mortgage Payable BS 19. Salaries & Wages Payable
BS 10. Furniture and Fixtures CS 20. Net Income
C. Below is a list of accounts and amounts found in the ledgers of SANSUNG PHOTO SHOP for the month ended, July
31, 2020:
Rent Expense 29, 400
Cash on hand ?
Accounts Receivable 12, 000
Supplies Expense 10, 200
Mr. Soo Sung, Capital 256, 900
Photo Service Income 210, 000
Loans Payable 100, 000
Office furniture 105, 000
Office Equipment 170, 000
Shop Equipment 156, 000
Notes Payable 10, 000
Salaries Expense 36, 000
Utilities Expense 9, 800
Permits & License 3, 500
Mr. Soo Sung, Drawing 15, 000
Directions:
1. Arrange the accounts and prepare a trial balance.
2. Prepare a 6-column worksheet (either manually or excel file).
3. Prepare the financial statements. Use Account form of Balance Sheet.
1. TRIAL BALANCE
2. 6-COLUMN WORKSHEET
3. FINANCIAL STATEMENTS
REVENUE
Photo Service Income P210 000.-
LESS EXPENSE:
Rent Expense P29 400.-
Salaries Expense 36 000.-
Utilities Expense 9 800.-
Supplies Expense 10 200.-
Total Expenses: 85 400.-
NET INCOME FOR THE MONTH: P124 600.-
A. DISCUSSION QUESTIONS:
1. Why is closing entries important?
The purpose of the closing entry is to reset the temporary account balances to zero on the general ledger,
the record-keeping system for a company's financial data.
2. Why are the ledger accounts need to be double ruled?
Double ruling is typically used to indicate a grand total. Double ruling across the total below the amounts
indicates that the account is closed and balanced.
3. When do double rule be done in the ledger accounts?
Double ruling only appears in the figure at the bottom of a column and indicates the completion of that
specific accounting procedure.
4. Why Nominal Accounts called temporary accounts?
Temporary accounts, which are also called nominal accounts, are company accounts whose balances are
not carried over from one accounting period to another, but are closed, or transferred, to permanent
accounts at the end of an accounting period.
B. PROBLEM:
On June 1, 2020, C.J. Castro opened the CJC Men’s Wear Shop; and the following transactions were completed during
the month:
June 1 – Invested the following assets in the business:
Cash P80,000
Sewing Equipment 30,000
Sewing Tools 5,500
1 – Bought sewing supplies P8,600 from Arthurs’ Trading on account
5 – Received P15,230.50 cash from various customers for tailoring services
7 – Billed Mr. Jo for completed suit worth, P20,420
10 – Bought clothing materials from Divi Market worth P7,550 issuing a 30-day promissory note.
12 – Paid P2,150 cash to Arthur’s Trading and issued promissory note for the balance
15 – Paid 3 sewers for P6,500 each for the first half of the month
15 – Rendered services to customer for the barong and pants made and delivered, P8,750 cash
18 – Mr. Jo gave P10,000 cash as partial payment of his account, and the balance on account
20 – Paid in full the account to Divi Market.
22 – Made an additional investment of P50,000 cash to the business
25 – Paid in full the account to Arthur’s Trading
27 – Delivered the “Americana” suit to Mr. J. Santos receiving P25,850 cash. Paid P1,200 for the Delivery of Mr. J.
Santos’ Americana
29 – Bought additional clothing materials to Barclay Clothing for P15,920 on account
30 – Paid the 3 sewers for P6,500 each; rent for the month, P10,500; and utilities, P5,250.
30 – Withdrew P50,000 cash for personal use.
Directions:
1. Journalize the above transactions.
2. Post the journal entries to the ledgers.
3. Prepare a trial balance.
4. Prepare a 6-column worksheet.
5. Prepare the financial statements.
6. Journalize and Post the closing entries.
7. Balance, and Rule the ledger accounts.
8. Prepare a Post-Closing Trial Balance.
9. Note: You may use the pro-forma type for the accounting forms needed or you may computerize your work. Be
sure you will use the correct format of each accounting forms.
Provide the account number for each account title.
CHART OF ACCOUNTS ACCOUNT NUMBER
CASH 11
ACCOUNTS RECEIVABLE 12
SEWING SUPPLIES 13
CLOTHING MATERIALS 14
SEWING TOOLS 15
SEWING EQUIPMENT 16
ACCOUNTS PAYABLE 21
NOTES PAYABLE 22
C.J. CASTRO, CAPITAL 31
C.J. CASTRO, DRAWING 32
TAILORING SERVICES 41
WAGES EXPENSE 51
DELIVERY EXPENSE 52
RENT EXPENSE 52
UTILITIES EXPENSE 54
1. JOURNALIZE THE ABOVE TRANSACTIONS.
DATE
DESCRIPTION P/R DEBIT CREDIT
2020
July 1 Cash 80 000.-
Sewing Equipment 30 000.-
Sewing Tools 5 500.-
C.J. Castro, Capital 115 500.-
Invested the following assets in the business.
5 Cash 15 230.5.-
Tailoring Income 15 230.5.-
Received cash from various customers.
PAGE 2
18 Cash 10 000.-
Accounts Receivable - Mr. Jo 10 420.-
Tailoring Income 20 420.-
Mr. Jo gave cash as partial payment of his
account, and the balance on account.
22 Cash 50 000.-
C.J. Castro, Capital 50 000.-
Made an additional investment of cash to the
business.
25 Cash 6 450.-
Accounts Payable - Arthur's Trading 6 450.-
Paid in full the account to Arthur's Trading.
27 Cash 25 850.-
Delivery Expense 1 200.-
Tailoring Services 27 050.-
Delivered the "Americana" suit to Mr. J. Santos
receiving cash and paid for the delivery of Mr.
J. Santos' Americana.
PAGE 3
DEBIT CREDIT
Cash P81 830.5.-
Accounts Receivable 30 840.-
Sewing Supplies 8 600.-
Clothing Materials 23 470.-
Sewing Tools 5 500.-
Sewing Equipment 30 000.-
Accounts Payable P14 820.-
Notes Payable 14 000.-
C. J. Castro, Capital 165 500.-
C. J. Castro, Drawing 50 000.-
Tailoring Services 91 870.5.-
Wages Expense 39 000.-
Delivery Expense 1 200.-
Rent Expense 10 500.-
Utilities Expense 5 250.-
P286 190.5.- P286 190.5.-
DEBIT CREDIT
Cash P196 280.5.- P114 450.-
Accounts Receivable 30 840.-
Sewing Supplies 8 600.-
Clothing Materials 23 470.-
Sewing Tools 5 500.-
Sewing Equipment 30 000.-
Accounts Payable 16 150.- 30 970.-
Notes Payable 14 000.-
C. J. Castro, Capital 165 500.-
C. J. Castro, Drawing 50 000.-
Tailoring Services 91 870.5.-
Wages Expense 39 000.-
Delivery Expense 1 200.-
Rent Expense 10 500.-
Utilities Expense 5 250.-
P416 790.5.- P416 790.5.-
4. PREPARE A 6-COLUMN WORKSHEET.
REVENUE:
Tailoring Income P91 870.5.-
LESS EXPENSES:
Wages Expense P39 000.-
Delivery Expense 1 200.-
Rent Expense 10 500.-
Utilities Expense 5 250.-
Total Expenses: 55 950.-
NET INCOME FOR THE MONTH: P35 920.5.-
DATE
DESCRIPTION P/R DEBIT CREDIT
2020
July 31 Tailoring Services 91 870.5.-
Income Summary Account 91 870.5.-
To close the income account.
27 81 830.5.-
25 850.-
196 280.5.- 196 280.5.-
2020
August 1 ✓ 81 830.5.-
18 30 840.-
10 420.-
30 840.- 30 840.-
2020
August 1 Balance ✓ 30 840.-
DEBIT CREDIT
Cash P81 830.5.-
Accounts Receivable 30 840.-
Sewing Supplies 8 600.-
Clothing Material 23 470.-
Sewing Tool 5 500.-
Sewing Equipment 30 000.-
Accounts Payable P14 820.-
Notes Payable 14 000.-
C.J. CASTRO, CAPITAL 101 420.5.-
C.J. CASTRO, DRAWING 50 000.-
TOTAL P180 240.5.- P180 240.5.-