PROBLEM 2: POSTING

Entity B had the following transactions during the period:

1. The sole owner provided ₱800,000 capital to the business.
2. Entity B rendered services worth ₱300,000, on account.
3. Entity B rendered services worth ₱40,000, on cash basis.
4. Entity B collected ₱120,000 accounts receivable.
5. Entity B paid utilities expense of ₱10,000.

Requirements:
a. Provide the journal entries.
b. Post the entries to the ledger. Use T-accounts for this purpose. Arrange
your T-accounts in this order. Assets, Liabilities, Equity, Income, and
Expenses.
c. Answer the questions below:
1) How much are the total service fees earned during the period?
2) How much are the total collections from clients during the period?
3) Hoe much are the total disbursements during the period?
4) How much cash does the business have at the end of the period?
5) How much are the outstanding accounts receivable from clients at the
end of the period?

Requirement (a):
1. Cash 800,000
Owner’s equity 800,000
2. Accounts receivable 300,000
Services fees 300,000
3. Cash 40,000
Services fees 40,000
4. Cash 120,000
Accounts receivable 120,000
5. Utilities expense 10,000
Cash 10,000

Requirement (b):
GENERAL LEDGER
ASSETS
Cash Accounts receivable
Dr. Cr. Dr. Cr.
1 800,000 2 300,000
3 40,000 120,000 4
4 120,000
End 950,000 End 180,000
Bal. Bal.
 EQUITY

Owner’s equity
Dr. Cr.
800,000 1

800,000 Bal.

INCOME EXPENSES
Service fees Utilities expense
Dr. Cr. Dr. Cr.
300,000 2
40,000 3
5 10,000
340,000 End End 10,000
Bal. Bal.

Requirement (c):
1) 340,000
2) 160,000 (40,000 + 120,000)
3) 10,000
4) 950,000
5) 180,000
PROBLEM 3: POSTING
Entity C had the following transactions during the period:
1. Owner invested ₱1,000,000 cash to the business.
2. Purchased equipment worth ₱58,000 for cash.
3. Purchased office supplies worth ₱300,000 on account (use an asset
account).
4. Paid ₱100,000 accounts payable.
5. Rendered services worth ₱500,000, on cash basis.
6. Rendered services worth ₱800,000, on account.
7. Collected ₱700,000 accounts receivable.
8. Paid salaries expense of ₱70,000.
9. Paid interest expense of ₱5,000.
10. Owner withdrew ₱10,000 cash from the business.

Requirements:
a. Provide the journal entries.
b. Post the entries to the ledger (use T-accounts).

Requirement (a):
1. Cash 1,000,000
Owner’s capital 1,000,000
2. Equipment 58,000
Cash 58,000
3. Prepaid supplies / Office supplies 300,000
Accounts payable 30,000
4. Accounts payable 100,000
Cash 100,000
5. Cash 500,000
Service fees 500,000
6. Accounts receivable 800,000
Service fees 800,000
7. Cash 700,000
Accounts receivable 700,000
8. Salaries expense 70,000
Cash 70,000
9. Interest expense 5,000
Cash 5,000
10. Owner’s drawings 10,000
Cash 10,000
Requirement (b):
GENERAL LEDGER
ASSETS
Cash
Dr. Cr.
1 1,000,000
5 500,000 58,000 2
7 700,000 100,000 4

70,000 8
5,000 9
10,000 10
End 1,957,000
Bal.

Prepaid supplies/
Office supplies
Dr. Cr.
3 300,000

End 300,000
Bal.

Accounts receivable
Dr. Cr.
6 800,000

700,000 6

End 100,000
Bal.

Equipment
 Dr. Cr.
2 58,000

End 58,000
Bal.

LIABILITIES

Accounts payable
Dr. Cr.
300,000 3
4 100,000

200,000 Bal.

Owner’s Drawings
Dr. Cr.
10 10,000

Bal. 10,000

INCOME EXPENSES
Service fees Salaries expense
Dr. Cr. Dr. Cr.
500,000 5
800,000 6
8 70,000
1,300,000 End 70,000
Bal.. Bal.

Interest expense
Dr. Cr.

9 5,000
Bal. 5,000

PROBLEM 4: UNADJUSTED TRIAL BALANCE

George Handyman Services had the following account balances as of
December 31, 20x1:
Accounts payable 32,000
Accounts receivable 320,000
Accumulated depreciation 400,000
Building 500,000
Cash 970,000
Interest expense 96,000
Land 700,000
Notes payable 800,000
Owner’s equity 920,000
Prepaid rent 50,000
Salaries expense 240,000
Service fees 796,000
Utilities expense 72,000

Requirement: Prepare the unadjusted trial balance. Make sure you provide a
proper heading for the report and present the accounts in their correct
sequence.

George Handyman Services

Unadjusted Trial Balance
December 31, 20x1
Accounts Debit Credit
Cash 970,000
Accounts receivable 320,000
Prepaid rent 50,000
Land 700,000
Building 500,000
Accumulated depreciation 400,000
Accounts payable 32,000
Notes payable 800,000
Owner’s equity 920,000
Service fees 796,000
Salaries expense 240,000
Utilities expense 72,000
Interest expense 96,000
Totals 2,948,000 2,948,000

PROBLEM 5: UNADJUSTED TRIAL BALANCE

Entity A’s accounts have the following balances as of December 31, 20x1:
Accounts payable 100,000
Accounts receivable 400,000
Accumulated depreciation 400,000
Allowance for bad debts 16,000
Bad debt expense 2,000
Cash 890,000
Depreciation expense 200,000
Office equipment 1,000,000
Owner’s drawing 10,000
Owner’s equity 291,000
Prepaid insurance 30,000
Prepaid supplies 50,000
Salaries expense 420,000
Salaries payable 60,000
Service fees 2,200,000
Supplies expense 5,000
Taxes and licenses 60,000

Requirement: Prepare the unadjusted trial balance. Make sure you provide a
proper heading for the report and present the accounts in their correct
sequence.

Entity A
Unadjusted Trial Balance
December 31, 20x1
Accounts Debit Credit
Cash 890,000
Accounts receivable 400,000
Allowance for bad debts 16,000
Prepaid supplies 50,000
Prepaid insurance 30,000
Office equipment 1,000,000
Accumulated depreciation 400,000
Accounts payable 100,000
Salaries payable 60,000
Owner’s equity 291,000
Owner’s drawings 10,000
Service fees 2,200,000
Salaries expense 420,000
Supplies expense 5,000
Bad debt expense 2,000
Depreciation expense 200,000
Taxes and licenses 60,000
Totals 3,067,000 3,067,000