CHAPTER 2 – ACCOUNTING CYCLE OF A SERVICE BUSINESS

1. Start up Integrated Accounting 7e.

2. Go to File and click New.
3. Enter your name in the User Name text box and click OK.
4. Save the file to your disk and folder with the file name (your name Business Solutions.
5. Go to setup and fill out the Company Info.
6. Go to Accounts and create Chart of Accounts. For Capital and Drawing Account, enter
your name.
7. Go to Journal and post the following transactions:

Problem 2 – 1
1. Start up Integrated Accounting 7e.
2. Go to File and click New.
3. Enter your name in the User Name text box and click OK.
4. Save the file to your disk and folder with the file name (your name Business Solutions.
5. Go to setup and fill out the Company Info.
6. Go to Accounts and create Chart of Accounts. For Capital and Drawing Account, enter your
name.
7. Go to Journal and post the following transactions:

On March 9 of the current year, Helen Masigasig established HM Financial Services, which
offers financial planning advice to its clients. She withdrew P300,000.00 from her personal
account and invested the money into the firm.
During the month, Ms. Masigasig had the following transactions related to the business:
1 Paid P5,000 for business registration
2 Paid Three months rent amounting to P15,000.00.
3 The company purchased from Computer Wizard computer equipment worth
P50,000.00 on account.
3 The company paid P24,000 cash for the premium on a two-year insurance policy.
4 The company purchased P27,500 worth of office furniture on credit.
4 Purchased P3,200.00 worth of office supplies on credit.
6 The company provided services to a client and immediately collected P10,000 cash.
6 The company completed P25,000 from client for advisory services rendered. This
amount is to be received within 7 days.
6 The company completed client services for P8,000 and received cash for services
rendered.
8 Billed client for P18,000 for services rendered.

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 10 Helen withdrew P20,000 cash from the company for personal use.
13 Collected cash amounting to P25,000 for services rendered.
13 The company collected full amount payment for services rendered in March 6.
13 The company received telephone bill amounting to P3,000.
14 The company provided services to a client and immediately collected P15,000 cash.
14 The company paid P 20,000 cash for employees’ salary.
15 The company paid P15,000 cash for accountant’s salary.
16 Paid miscellaneous expenses amounting to 900.
17 The company paid creditors to settle the purchase of office furniture. 4
17 Paid creditors for amount due in transaction 2.
18 The company paid P1,500 cash for maintenance of the company’s computer
equipment.
18 The company paid advertising expense, P2,000.
20 Received cash in full payment for services rendered in July 6.
21 Paid telephone bill. 13
24 Paid electric bill amounting to P3,000.
24 Paid supplier for purchase of office supplies. 5
25 Purchase copier amounting to P 5,000 and paid supplier in cash.
27 Render service on account amounting to P15,000.
27 Billed client for services rendered amounting to P 16,000.
28 Paid employees salary amounting to P 35,000.
28 Received cash from client in full payment for services rendered in March 25.
28 Paid gasoline bill amounting to P 3,000.
30 Billed client for services rendered amounting to P 10,000.
30 Helen withdrew P 15,000 for personal use.
8. Display the Chart of Accounts.
9. Display the General Journal Report.
10. Display the Trial Balance
11. Post the following adjustments for the month of April
Insurance expired for the month of April P 442.00
Inventory of supplies as of April 30 3,500.00
Expired Rent ?
12. Print – (1) General Journal after adjustments, (2)Trial Balance, (3) Income Statement, (4)
Balance Sheet

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Problem 2 – 2
1. Start up Integrated Accounting 7e.
2. Go to File and click New.
3. Enter your name in the User Name text box and click OK.
4. Save the file to your disk and folder with the file name (your name Business Solutions.
5. Go to setup and fill out the Company Info.
6. Go to Accounts and create Chart of Accounts. For Capital and Drawing Account, enter your
name.
7. Go to Journal and post the following transactions:

Soo Kyut Mee opened a tax consulting agency to be known as Soo Kyut Tax Consultant. On
July 1 of the current year, she withdrew P500,000.00 from her personal account and invested the
money into the firm.
The agency had the following transactions during the month:
3 The company purchased from Majal Computer Shop computer equipment worth
P45,000.00 on account
3 Paid five months rent amounting to P25,000.00.
3 The company paid P24,000 cash for the premium on a two-year insurance policy.
4 The company purchased P17,500 worth of office furniture on credit.
4 Paid P6,000 for business registration
5 Purchased 5,200 worth of office supplies on credit.
5 The company provided services to a client and immediately collected P10,000 cash.
6 The company completed P16,000 from client for services rendered. This amount is to be
received within 5 days.
6 The company completed client services for P5,000 and received cash for services
rendered.
7 Billed client for P15,000 for services rendered.
10 The owner withdrew P10,000 cash from the company for personal use.
12 Paid cash for charitable contributions amounting to P1,500.
12 The company collected P6,000 cash in partial payment for the services rendered in July 6.
13 The company received telephone bill amounting to P3,000.
14 The company provided services to a client and immediately collected P10,000 cash.
14 The company paid P 12,000 cash for employees’ salary.
14 The company paid P15,000 cash for accountant’s salary.

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 17 The company paid bill to settle the purchase of office furniture.
17 Paid half of the amount due on the purchase of computer equipment.
18 The company paid P2,500 cash for maintenance of the company’s computer equipment.
18 The company paid P3,000 cash for advertisements in the local newspaper for the month.
20 Received cash in full payment for services rendered in July 7.
21 Paid telephone bill.
24 Paid electric bill amounting to P4,000.
24 Paid supplier for purchase of office supplies.
25 Billed client for services rendered amounting to P 8,000.
26 Purchase copier amounting to P 5,000 and paid supplier in cash.
27 Render service on account amounting to P12,000.
27 Billed client for services rendered amounting to P 8,000.
28 Paid employees salary amounting to P 35,000.
28 Received cash from client in full payment for services rendered in July 25.
28 Paid gasoline bill amounting to P 3,000.
28 Received bill and paid Meralco amounting to P 8,000.
31 Received bill and paid PLDT amounting to P 5,000.
31 Received payment from client for services rendered on July 27.
31 Billed client for services rendered amounting to P 12,000.
31 Soo withdrew P 20,000 for personal use.
8. Display the Chart of Accounts.
9. Display the General Journal Report.
10. Display the Trial Balance
11. Prepare adjusting journal entries for expired rent and insurance.
Supplies on hand amounts to P1,950.
12. Print – (1) General Journal after adjustments, (2)Trial Balance, (3) Income Statement, (4)
Balance Sheet

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Problem 2 – 3
1. Start up Integrated Accounting 7e.
2. Go to File and click New.
3. Enter your name in the User Name text box and click OK.
4. Save the file to your disk and folder with the file name (your name Business Solutions.
5. Go to setup and fill out the Company Info.
6. Go to Accounts and create Chart of Accounts. For Capital and Drawing Account, enter your
name.
7. Go to Journal and post the following transactions:

Dina Natuto, an engineer, practiced her profession and established D. Natuto Structural
Design. On June 1, she withdrew P250,000.00 from her personal account and invested the
money into the firm.
The company had the following transactions during the month:
1 Paid P5,000 for business registration and P 10,000 for attorney’s fee.
1 The company purchased computer equipment worth P35,000.00 and payed P5000 cash
and the balance at the end of the month.
1 Paid three months rent amounting to P24,000.00.
2 The company paid P9,000 cash for the premium on a two-year insurance policy.
2 The company purchased P17,500 worth of office furniture on credit.
3 The company completed a project worthP28,700. She expected to received the
payment within 5 days.
5 The company provided services to a client and immediately collected P10,000 cash.
5 Purchased P5,200.00 worth of office supplies on credit.
6 The company completed client services for P25,000 and received cash for services
rendered.
6 The company received bill from advertising agency amounting to P2,500.
7 The company collected P20,000 cash in partial payment for the services rendered in
June 3.
8 The company provided services to a client and immediately collected P10,000 cash.
9 Billed client for P15,000 for services rendered.
9 The company paid bill to settle the purchase of office furniture.
10 Paid supplier of office supplies.

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 10 The company paid P2,000 cash for maintenance of the company’s computer
equipment.
10 The owner withdrew P10,000 cash from the company for personal use.
12 Received cash amounting to P20,000 for services rendered.
13 The company paid P25,000 cash for employees’ salary.
14 The company paid P2,500 cash for advertisements in the local newspaper for the
month.
15 The company paid P12,000 cash for accountant’s salary.
15 Received cash in full payment for services rendered in June 3
16 Paid telephone bill.
17 Paid electric bill amounting to P3,000.
17 Paid gasoline bill from Marawi Gas Station amounting to P4,000.
19 Billed client for services rendered amounting to P 18,000.
20 Purchase copier amounting to P 5,000 and paid supplier in cash.
22 Render service on account amounting to P12,000.
23 Billed client for services rendered amounting to P 8,000.
26 Paid employees salary amounting to P 35,000.
26 Received cash from client in full payment for services rendered in June 19
27 Received bill and paid Meralco amounting to P 5,000.
28 Received bill and paid PLDT amounting to P 3,000.
29 Billed client for services rendered amounting to P 8,000.
30 Dina withdrew P 10,000 for personal use.
30 Collection from client for services rendered, P12,000.
13. Display the Chart of Accounts.
14. Display the General Journal Report.
15. Display the Trial Balance
16. Post the following adjustments for the month of April
Insurance expired for the month of April P 442.00
Inventory of supplies as of April 30 1,500.00
Expired rent for the month ?
17. Print – (1) General Journal after adjustments, (2)Trial Balance, (3) Income Statement, (4)
Balance Sheet

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Problem 2 - 4
On April 1, 2017, John Marquez launched a computer solutions company, JM Business
Solutions. During the month,the company had the following transactions related to the
business:

April 3 John invested P450,000 cash, office furniture with a value of P74,500, and P85,000 of
computer equipment in the company.
4 The company purchased a one-storey Building worth P1,250,000 for an office by
paying P250,000 cash and for the balance, signed a long-term note payable.
4 The company paid P10,600 cash for the premium on a two-year insurance policy.
5 The company provided services to a client and immediately collected P8,000 cash.
5 The company purchased P13,500 worth of additional computer equipment by paying
P5,000 cash and the balance at the end of the month.
6 The company completed P8,750 of services for a client. This amount is to be received
within 15 days.
6 Purchased office supplies for cash amounting to P5,000.
7 The company purchased P9,500 of additional office furniture on credit.
10 The company completed client services for P19,200 for cash.
10 The company received a bill for rent of a computer testing device that was used on a
recently completed job amounting to P1,500.
11 The company collected P4,600 cash as partial payment from April 6 transaction.
12 The company paid P15,600 cash for accountant’s salary.
13 The company paid bill to settle the purchase of office furniture
14 Billed client for P15,000 for services rendered.
14 The company paid P825 cash for minor maintenance of the company’s computer
equipment.
14 John withdrew P7,875 cash from the company for personal use.
17 Received cash in full payment for services rendered in transaction 6.
17 Collected cash amounting to 30,000 for services rendered.
18 The company paid P21,600 cash for salary of the assistant.
19 The company paid P2,000 cash for advertisements in the local newspaper for the
month.
20 Paid electric bill amounting to P3,000.
20 Paid telephone bill amounting P2,500.
20 The company completed client services and received P9,500 check.
25 Paid supplier in for computer equipment purchased on April 5.
27 Paid employees salary for P32,000.
27 Received cash from client in full payment for services rendered last April 14.
28 Render service on account amounting to P9,000.
28 Received and paid bill to Petron Gas Station amounting to P6,000.
28 Purchase office supplies on account amounting to P3,000.
28 Billed client for services rendered amounting to P7,000.

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 28 Purchase additional computer amounting to P30,000 for cash.

18. Display the Chart of Accounts.

19. Display the General Journal Report.
20. Display the Trial Balance
21. Post the following adjustments for the month of April
Insurance expired for the month of April P 442.00
Inventory of supplies as of April 30 3,500.00
Accrued interest on note payable 7,000.00
22. Print – (1) General Journal after adjustments, (2)Trial Balance, (3) Income Statement, (4)
Balance Sheet

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Comprehensive Problem

1. Start up Integrated Accounting 7e.

2. Go to File and click New.
3. Enter your name in the User Name text box and click OK.
4. Save the file to your disk and folder with the file name (your name Business Solutions.
5. Go to setup and fill out the Company Info.
6. Go to Accounts and create Chart of Accounts. For Capital and Drawing Account, enter your
name.
7. Go to Journal and post the following transactions:

After graduating from college, Ina Labandera opened Labandera Ko in San Mateo with
initial capital composed of following:

Cash P 100,000
Laundry equipment 75,000
Office furniture 15,000

Transactions during the month of May are as follows:

3 Paid business tax to the municipal treasurer, P 4,000.

4 Paid print advertisement in a local newspaper amounting to P2,000.
3 Paid three month rent amounting to P18,000.
3 Paid temporary helper to clean the premises amounting to P1,500.
4 Puchased laundry supplies for cash amounting to P5,000.
4 Cash collection for the day for the laundry services rendered P8,000.
5 XOXO Inn delivered bedsheets and curtains for laundry.
6 Paid P1,500 for repair of rented premises.
8 Received P2,000 from customer for laundry services.
10 Another client, Rainbow Inn, delivered bed sheets and pillow cases for laundry.
11 Purchased laundry supplies amounting to P6,000 on account.
12 Received P 4,000 from customers for laundry services rendered.
13 Rendered services on account amounting to P6,500.
14 Paid salary of two helpers amounting to P10,000.
15 Ina withdrew P10,000 for personal use.
17 Received telephone bill amounting to P2,500.
19 Billed XOXO P 9,000 for services rendered.
20 Received payment from Rainbow Inn for services rendered amounting to P 12,000.
21 Paid miscellaneous services for electrical repair P600.
22 Cash collection for the day for services rendered amounting to P7,000.
24 Received and paid electric bill amounting to P3,500.
25 Paid suppliers for laundry supplies purchased on July 11.
26 Cash collection from customer for services rendered last July 13.
27 Received water bill amounting to P2,500.00
27 Cash collection for the day amounts to P7,500 for services rendered.
27 Gasoline cost for the week P1,500.

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 28 Paid car maintenance amounting to P2,500.
28 Received payment from XOXO.
28 Paid P1,800 for printing of company flyers.
29 Paid salary of employees including overtime P 15,000.
29 Withdrew P 10,000 for personal use.
29 Purchased laundry supplies on account amounting to P3,500.
29 Purchased additional laundry equipment on account amounting to P 36,000.
29 Paid telephone bill and water bill.
29 Cash collection for the day amounts to P8,500 for services rendered.
29 Charged customers for dry cleaning services amounting to P 12,000 to be received next
month.
31 Paid additional expenses for office maintenance amounting to P2,500.
31 Paid travelling expenses for trip to Boracay on a weekend vacation amounting to
P18,000.
31 Paid P1,000 to business association for annual membership dues.

8. Display the Chart of Accounts.

9. Display the General Journal Report.
10. Display the Trial Balance
11. Record expired insurance and rent for the month. Office supplies on hand amounts to
2,500.
Print – (1) General Journal after adjustments, (2)Trial Balance, (3) Income Statement, (4)
Balance Sheet

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