Problem Exercise No.

2
Journalizing

Cavite Engineering, a single proprietorship, completed the following summary transactions in

the month of June 2018, viz:

a. To start the business, Kevin Pedro, the proprietor, made the following investments:
P200,000 cash; office equipment- P45,000, and drafting and other office equipment
valued at P55,000.
b. Rented a small office space in the City of Bacoor, Cavite. Paid in advance the rent for
three months, at P20,000 per month.
c. Paid the improvements made on the rented office space – P75,000.
d. Purchased furniture worth P20,000 for the office, paid P5,000 in cash and the balance on
account.
e. Completed and delivered a set of building plans prepared for a client. Billed the client
P50,000. Collected P10,000 as initial payment, balance due as construction project
progresses.
f. Purchased additional drafting equipment for P25,000. Paid P5,000 and issued a 30 day,
8% note for the balance.
g. Billed a client for structural computation done, P15,000. Term 30 days.
h. Paid for the following expenses during the month: utilities –P5,000, salary of drafting
assistance, P12,000, taxes – P6,500, repairs and maintenance of office equipment –
P1,250, and miscellaneous expenses – P1,500.
i. Received a billing statement from PLDT, P1,500.
j. Collected from clients for various professional services rendered – P22,500.
k. Record portion of the one month rent of the office space.
l. Paid helper (on-call) for cleaning the office, P1,000.
m. Cash withdrawals of Kevin Pedro, P10,000.
n. Received P20,000 as payment from client in item no. “e”
o. Paid for the note that matured: principal P20,000 and interest P130.00.

Required:

1. Prepare journal entries using the following accounts: Cash, Accounts Receivable, Prepaid
Rent, Office Furniture & Equipment, Leasehold Improvements, Accounts Payable, Notes
Payable, Pedro, Capital, Pedro, Drawing, Professional Fees, Salaries, Taxes, Utilities,
Repairs and Maintenance, Rent Expense, Interest Expense, and Miscellaneous Expenses.