The Friendly Neighborhood Corporation is a newly

registered domestic corporation engaged in

business process outsourcing services with clients
located in Sydney Australia. The registered
business address is in Quezon City.

Opened a corporate bank checking account in

BDO and BPI. Deposited P500,000, each bank
respectively. This serve as the paid-up capital of
the five (5) incorporators. Amount was deposited
2nd day of the current month. EXERCISE
WORKSHOP
During the month of (use the current month and EXERCISE
year), the company had the following business
transactions:

(see next slide)

 Day Business Transactions
of the month

3 Paid a total of P711.00 for various fares (taxis, jeeps, tricycle and bus) of the admin secretary, Jane Cruz, who
was out on fieldwork during the day.
5 Purchased various office equipment which amounted to P750,000.00. Term is 3 months to pay starting 1st of
the following month.
6 Purchased various office furniture and fixtures worth P525,000.00. Term is 6 months to pay starting 15th of
the following month.
6 Paid P200,000.00 for two (2) months rent security deposit. Paid using BDO check.
10 Paid P5,500.00 for dinner with client/prospect at Edsa Shangrila. Paid using the credit card of the CEO.
11 Bought various office supplies from National bookstore amounting P9,500 advanced by the CEO using his
personal credit card.
15 Paid current month (1-15) salary of employees amounting to P110,200.00: Breakdown as follows: Salaries and
Wages P 134,400.00; Withholding Tax P15,300.00; SSS EE; P5,600; SSS ER P9,500; PHIC EE P2,300; PHIC ER
P2,300; HDMF EE P1,000; HDMF ER P1,000
20 Paid Meralco Bill for the month amounting to P15,100.00, PLDT P6,000 and water P2,000
30 Client - GHI Company remitted via bank transfer amounting to US$ 15,500 (PHP 775,000)
30 Client - JKL Company remitted via bank transfer amounting to US$ 20,000 (PHP1,000,000)
31 Paid payroll for current month (16-31) with breakdown as follows: Salaries and Wages P 154,400.00;
Withholding Tax P5,300.00; SSS EE; P6,600; SSS ER P10,500; PHIC EE P1,300; PHIC ER P1,300.

31 Paid P95,000, net of withholding tax for one (1) current month rent
 BALANCE SHEET ACCOUNTS INCOME STATEMENT ACCOUNTS
CHART OF
ACCOUNT 100 - ASSET 400 - REVENUE
101 – Cash 401 – Sales
102 – Accounts Receivable 402 – Sales Discount
103 – Office Supplies 403 – Sales Return and Allowances
104 – Prepaid Rent
105 – Deposits
106 – Furniture and Fixtures
106.1 – Accumulated Depreciation – FF
107 - Machinery & Equipment
107.1 - Accumulated Depreciation – ME

200 - LIABILITY 500 - EXPENSE

201 – Accounts Payable
202 – Loans Payable
203 – SSS Premium Payable
204 – Philhealth Premium Payable
205 – HDMF Premium Payable
206 – Withholding Tax Payable – Expanded
207 – Withholding Tax Payable – Compensation
208 – Income Tax Payable
209 – Sales Tax Payable
210 – Advances from Officers and Employees
211 – Salary Payable
501 - Salary Expense
502 – SSS/PHIC/HDMF Contribution
503 - Taxes and Licenses
504 – Rental Expense
505 – Supplies Expense
506 – Transportation Expense
507 – Depreciation Expense
508 – Representation and Entertainment
509 – Utility Expense
510 – Miscellaneous Expense
511 – Advertising Expense

300 - EQUITY
301 – Capital
302 – Profit and Loss Summary