ACTG121 Simplified Accounting for Sole Proprietorship:

Sample Problem for Statement of Changes in Owner’s Equity, Income Statement and Balance
Sheet.
OUR LADY OF FATIMA UNIVERSITY
Practice Set Worksheet

PROBLEMS

A. Shown below is the preliminary trial balance of MAGINHAWA SERVICE CENTER for the calendar
year 200A. Prepare its Statement of Changes in Owner’s Equity, Income Statement and Balance
Sheet.

E. Liwanag Capital P85,000 Notes Receivable P1,200

Office Equipment 12,000 Notes Payable 8,000
Accounts Payable 16,600 Interest Income 360
Cash 18,540 Tel. & Telegrams Expense 1,250
Tools 21,500 Interest Expense 220
E. Liwanag Drawing 10,000 Postage & Stamps Expense 50
Accounts Receivable 21,460 Insurance Expense 4,100
Mortgage Payable 30,000 Car 84,700
Loan Payable (Short-term) 20,000 Utilities Expense 160
Service Income 8,560 Supplies Expense 3,150
Furniture & Fixtures 8,900 Massage Equipment 36,290
Salaries Expense 21,000 Rental Income 6,000

A. The following is the adjusted trial balance of LENMAR Service Company for the fiscal year ending
May 31 200B. Prepare its Statement of Changes in Owner’s Equity, Income Statement and
Balance Sheet.

Cash P40,860 Mortgage Payable P120,000

Notes Receivable 4,000 M. Lanza Capital 75,000
Accounts Receivable 57,880 M. Lanza Drawing 20,000
Allow. For Impairment Loss 3,280 Service Income 204,000
Prepaid Advertising 10,000 Rental Income 22,000
Unexpired Insurance 6,000 Interest Income 40
Supplies Inventory 1,260 Salaries Expense 114,600
Interest Receivable 40 Rent Expense 30,000
Furniture & Fixtures 36,800 Utilities Expense 8,250
Accum. Dep’n – Furn. & fixt. 1,840 Supplies Expense 4,160
Office Equipment 50,000 Advertising Expense 40,000
Accum. Dep’n – Office Eqpmt. 2,500 Insurance Expense 24,000
Note Payable (short-term) 2,000 Taxes & Licenses 12,000
Accounts Payable 24,250 Interest Expense 200
Utilities Payable 4,250 Impairment Loss 280
Interest Payable 10 Depreciation – Furn. & Fixt. 840
Unearned Rental 2,000 Depreciation – Office Eqpmt. 500
SOLUTION AND ANSWER SHEET:

Maginhawa Service Center

Unadjusted Trial Balance
As of ended December 31, 200A

ACCOUNT TITLES DEBIT CREDIT

Cash ₱18,540
Account Receivable 21,460
Notes Receivable 1,200
Tools 21,500
Furniture & Fixture 8,900
Office Equipment 12,000
Massage Equipmnet 36,290
Car 84,700
Account Payable ₱16,600
Note Payable 8,000
Loan Payable (Short Term) 20,000
Mortgage Payable 30,000
E. Liwanag, Capital 85,000
E. Liwanag, Drawing 10,000
Service Income 78,560
Interest Income 360
Rental Income 6,000
Salaries Expense 21,000
Utilities Expense 160
Supplies Expense 3,150
Interest Expense 220
Insurance Expense 4,100
Tel. & Telegram Expense 1,250
Postage & Stamp Expense 50
TOTAL: ₱244,520 ₱244,520
 Maginhawa Service Center
Statement of Changes in Owner's Equity
As of ended December 31, 200A

E. Liwanag, Capital (Beginning) 85,000

Less: E. Liwanag, Drawings -10,000
TOTAL: 75,000
Add: NET INCOME 54,990

E. LIWANAG, CAPITAL (ENDING) 129,990

Maginhawa Service Center

Income Statement
As of ended December 31, 200A

INCOME
Service Income 78,560
Interest Income 360
Rental Income 6,000
TOTAL INCOME 84,920

LESS: EXPENSE
Salaries Expense 21,000
Utilities Expense 160
Supplies Expense 3,150
Interest Expense 220
Insurance Expense 4,100
Tel. & Telegram Expense 1,250
Postage & Stamp Expense 50
TOTAL EXPENSES 29,930

NET INCOME 54,990

 Maginhawa Service Center
Balance Sheet
As of ended December 31, 200A
ASSETS
CURRENT ASSETS
Cash 18,540
Accounts Receivable 21,460
Notes Receivable 1,200
TOTAL CURRENT ASSETS 41,200

NON-CURRENT ASSETS
Tools 21,500
Furnitures & Fixture 8,900
Office Equipment 12,000
Massage Equipment 36,290
Car 84,700
TOTAL NON-CURRENT ASSETS 163,390

TOTAL ASSETS 204,590

LIABILITIES
CURRENT LIABILITIES
Accounts Payable 16,600
Notes Payable 8,000
Loan Payable (short - term) 20,000
TOTAL CURRENT LIABLITIES 44,600

NON-CURRENT LIABILITIES
Mortgage Payable 30,000
TOTAL NON-CURRENT LIABILITIES 30,000

TOTAL LIABILITIES 74,600

TOTAL OWNER'S EQUITY 129,990

TOTAL LIABILITIES AND OWNER'S EQUITY 204,590