Date Account Titles Dr Cr REPORT

Cash BS
1 Owner’s, Capital 3,000,000 3,000,000.00 BS
to record the owner’s investment to the business

Equipment BS
2 Cash 1,250,000 1,250,000.00 BS
to record the acquisition of equipment for cash

Cash BS
3 Notes payable 1,000,000 1,000,000.00 BS
to record the bank loan

Prepaid insurance BS
4 Cash 250,000 250,000.00 BS
to record the prepayment of insurance

Cash (9M x 1/3) 3,000,000 BS

Accounts receivable (9M x 2/3) 6,000,000 BS
5
Service fees 9,000,000.00 IS
to record service fees

Cash BS
6 Accounts receivable 3,000,000 3,000,000.00 BS
to record collection of accounts receivable

Salaries expense IS
7 Cash 1,500,000 1,500,000.00 BS
to record salaries expense
Utilities expense IS
8 Cash 850,000 850,000.00 BS
to record utilities expense
Prepaid supplies BS
9 Cash 320,000 320,000.00 BS
to record purchase of supplies
 Owner’s drawings BS
10 Cash 1,900,000 1,900,000.00 BS
to record owner’s drawings
I. ASSETS

CASH Accounts receivable

1 3,000,000 5 9,000,000
2 1,250,000 6 3,000,000
3 1,000,000
4 250,000
5 9,000,000
6 3,000,000
7 1,500,000
8 850,000 BAL 6,000,000
9 320,000
10 1,900,000
BAL 22,070,000

Prepaid Insurance Prepaid Supplies

4 250,000 9 320,000

250,000 320,000

Equipment
2 1,250,000
 1,250,000

II. LIABILITIES
Notes Payable
3 1,000,000

BAL 1,000,000

III. EQUITY
Owner's capital Owner's drawings
1 3,000,000 10 1,900,000

3,000,000 1,900,000

IV. INCOME
 Service Fees
5 6,000,000

6,000,000

V. EXPENSE
Salaries Expense Utilities Expense
7 1,500,000 8 850,000

1,500,000 850,000
 BTS Co.
Unadjusted Trial Balance
December 31, 2021

Accounts Debits Credits

Cash 22,070,000
Accounts receivable 6,000,000
Prepaid insurance 250,000
Prepaid supplies 320,000
Equipment 1,250,000
Notes payable 1,000,000
Owner's capital 3,000,000
Owner's drawings 1,900,000
Service fees 6,000,000
Salaries expense 1,500,000
Utilities expense 850,000
Totals 34,140,000 10,000,000
 Date Account Titles Dr Cr
IS Depreciation expense
BS (i) Accumulated depreciation 250,000 250,000.00 Principal 1,000,000.00
to record the depreciation expense for the year Interest rate 6%
IS Interest expense (1M x 6% x 6/12) 30,000 Interest 60,000.00
BS (ii) Interest Payable 30,000.00 Interest from 30,000.00
to accrue interest expense

IS Insurance expense (250K x 3/12)

BS (iii) Prepaid insurance 62,500 62,500.00
to recognize insurance expense

IS Supplies expense (320K – 62.5K)

BS (iv) Prepaid supplies 257,500 257,500.00
to recognize supplies expense
 10,470,000 10,470,000

Date Account Titles Dr Cr

Service Fees 6,000,000
Salaries Expense 1,500,000
Utilities Expense 0
Depreciation Expense 0
Dec. 31, 20x1 Interest Expense 30,000
Insurance Expense 0
Supplies Expense 0
Income Summary 4,470,000
to close income and expense accounts to income summary
Income Summary 4,470,000
Dec. 31, 20x1 Owner's Equity 4,470,000
to close the income summary to equity
Owner's Equity 0
Dec. 31, 20x1 Owner's Drawing 0
to close the drawings account
 Unadjusted TB Adjustments Adjusted TB
Debits Credits Debits Credits Debits Credits
Cash ### ###
Accounts receivable 6,000,000.00 ###
Prepaid insurance 250,000.00 62,500.00 187,500.00
Prepaid supplies 320,000.00 257,500.00 62,500.00
Equipment 1,250,000.00 ###
Notes payable 1,000,000.00 ###
Owner's capital 3,000,000.00 ###
Owner's drawings 1,900,000.00 ###
Service fees 6,000,000.00 ###
Salaries expense 1,500,000.00 ###
Utilities expense 850,000.00 850,000.00
### 10,000,000.00
Adjustments:
Depreciation expense - -
Interest expense 30,000.00 30,000.00
Insurance expense - -
Supplies expense - -
Accumulated Depreciation 250,000.00 250,000.00
Interest Payable 30,000.00 30,000.00

Total 30,000.00 600,000.00 ### ###

Income Summary (Profit or Loss)
 Income Statement Balance Sheet Closing entries Post closing entries
Debits Credits Debits Credits Debits Credits Debits Credits
22,070,000.00 ###
6,000,000.00 ###
187,500.00 187,500.00
62,500.00 62,500.00
1,250,000.00 ###
1,000,000.00 ###
3,000,000.00 4,470,000.00 ###
1,900,000.00 1,900,000.00 -
6,000,000.00 6,000,000.00
1,500,000.00 1,500,000.00
850,000.00 850,000.00

- -
30,000.00 30,000.00
- -
- -
250,000.00 250,000.00
30,000.00 30,000.00

2,380,000.00 6,000,000.00 31,470,000.00 4,280,000.00 6,000,000.00 8,750,000.00 ### ###

3,620,000.00 27,190,000.00
6,000,000.00 6,000,000.00 31,470,000.00 31,470,000.00
 BTS Co.
Balance Sheet
As of December 31, 2021

ASSETS
Cash ₱22,070,000
Accounts receivable 6,000,000
Prepaid insurance 187,500
Prepaid supplies 62,500
Equipment 1,250,000
Accumulated depreciation -250,000
TOTAL ASSETS ₱29,320,000

LIABILITIES
Notes payable 1,000,000
Interest payable 30,000
TOTAL LIABILITIES 1,030,000

EQUITY
Owner's equity 7,470,000
TOTAL EQUITY 7,470,000

TOTAL LIABILITIES & EQUITY ₱8,500,000

 BTS Co. BTS Co.
Income Statement Changes in Owner's Equity
For the month ended December 31, 2021 As of December 31, 2021

INCOME Owner's Capital 3,000,000

Service Fees ₱6,000,000 Owner's Drawing -1,900,000
Net Income 3,620,000
EXPENSES Owner's Equity 4,720,000
Salaries expense 1,500,000
Utilities expense 850,000
Depreciation expense 0
Interest expense 30,000
Insurance expense 0
Supplies expense 0
TOTAL EXPENSES 2,380,000

PROFIT FOR THE PERIOD ₱3,620,000