FUNDAMENTAL ACCOUNTING

Journal Entries

DEC 1: Vic Castro opened Portrait studio by depositing ₱300,000.00 in the checking account.

Date Description Debit Credit

Dec 1 Cash 300,000.00
Owner's Equity 300,000.00

DEC 1: Paid two months' rent in advance for the studio, ₱40,000.00.
Dec 1 Prepaid Rent 80,000.00
Cash 80,000.00

DEC 2: Bought photography equipment on account, ₱100,000.00.

Dec 2 Photography Equipment 100,000.00

Accounts Payable 100,000.00

DEC 8: Purchased photography supplies for cash, ₱30,000.00.

Dec 8 Photography Supplies 30,000.00

Cash 30,000.00

DEC 15: Received cash for portraits, ₱70,000.00.

Dec 15 Cash 70,000.00

Portrait Revenue 70,000.00

DEC 16: Billed customers for portraits, ₱25,000.00.

Dec 16 Accounts Receivable 25,000.00

Portrait Revenue 25,000.00

DEC 21: Paid for one-half of the photography equipment purchased on Dec 2, ₱50,000.00.

Dec 21 Accounts Payable 50,000.00

Cash 50,000.00
DEC 22: Paid the utility bill for the month of December, ₱15,000.00.

Dec 22 Utilities Expense 15,000.00

Cash 15,000.00

DEC 28: Received payment from customers billed on Dec 16, ₱12,000.00.

Dec 28 Cash 12,000.00

Accounts Receivable 12,000.00

DEC 29: Vic Castro withdrew for personal use, ₱20,000.00.

Dec 29 Owner's Equity 20,000.00

Cash 20,000.00
DEC 30: Received cash from customers for portraits, ₱22,000.00.
Dec 30 Cash 22,000.00
Portrait Revenue 22,000.00
Posting to the Ledger:

Now, we will post these journal entries to their respective ledger accounts:
CASH ACCOUNTS
Date Description Debit Credit
Dec 1 Opening Balance 300,000.00
Dec 1 Rent Payment 80,000.00
Dec 8 Supplies Purchase 30,000.00
Dec 15 Portrait Revenue 70,000.00
Dec 21 Equipment Payment 50,000.00
Dec 28 Customer Payment 12,000.00
Dec 29 Owner's Withdrawal 20,000.00
Dec 30 Customer Payment 22,000.00

Owner's Equity Account:

Dec 1 Capital Contribution 300, 000.00

Dec 29 Withdrawal 20,00.00

Prepaid Rent Account:

40,000.00

Photography Equipment Account:

Dec 2 Equipment Purchase 100,000.00

Dec 21 Equipment Payment 50,000.00

Photography Supplies Account:

Dec 8 Supplies Purchase 30,000.00

Accounts Payable Account:

Dec 2 Equipment Purchase 100,000.00

Dec 21 Equipment Payment 50,000.00

Utilities Expense Account:

Dec 22 Utilities Payment 15,000.00

Accounts Receivable Account:

Dec 16 Customer Billing 25,000.00

Dec 28 Customer Payment 12,000.00

portrait Revenue Account:

Dec 15 Portrait Revenue 70,000.00

Dec 16 Customer Billing 25,000.00
Dec 30 Customer Payment 22,000.00
Preparing the Trial Balance:

Debit Credit
Cash 367,000.00
Prepaid Rent 40,000.00
Equipment 50,000.00
Supplies 30,000.00
Accounts Payable 50,000.00
Utilities Expense 15,000.00
Accounts Receivable 13,000.00
Owner's Equity 280,000.00
Portrait Revenue 117,000.00

Total 475,000.00

Preparing the Trial Balance:

A trial balance is a list of all the ledger accounts and their balances to ensure that debits equal credits.

Here's the trial balance for VC Portrait:

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Debit Credit
Cash 367,000.00
Prepaid Rent 80,000.00
Equipment 50,000.00
Supplies 30,000.00
Accounts Payable 50,000.00
Utilities Expense 15,000.00
Accounts Receivable 13,000.00
Owner's Equity 280,000.00
Portrait Revenue 117,000.00

Total 537,000.00 537,000.00

The trial balance shows that the total debits and credits are equal, indicating that the