MR.

DICK COMPANY
FOR THE MONTH ENDED JUNE 30, 2007
TRIAL BALANCE
DEBIT CREDIT
CASH 130,000.00
ACCOUNTS RECEIVABLES 65,000.00
SUPPLIES 5,000.00
FURNITURE 80,000.00
EQUIPMENT 180,000.00
ACCOUNTS PAYABLE 50,000.00
BANK LOAN 50,000.00
DICK CAPITAL 360,000.00
SALES 110,000.00
PURCHASES 100,000.00
SALARIES EXPENSE 4,000.00
UTILITIES EXPENSE 6,000.00
570,000.00 570,000.00
Items for Adjustments
• Accrued Income- income already earned but not yet collected.
• Accrued Expenses- expenses already used but not yet paid.
• Deferred Income- money already collected but not yet earned
• Income method of recognition–records collection as income already
• Liability method of recognition - records collection as a liability
• Prepaid Expenses- expenses already paid but not yet used.
• Asset method -when you record supplies as an asset
• Expense Method- when you record supplies as expense
• Bad Debts- are estimated receivable that can’t be collected.
• Depreciation- are estimated decline in value of properties
used in business.
• Merchandise Inventory End- Unsold merchandise at the end of the year.
ACCRUED INCOME
• Mr. Rick has rented out an idle space in his store for
P5,000 monthly the rent for June has not been
recorded and collected yet.
Rent Receivable P5,000
Rent Income P5,000
To record accrued rent income
Accrued Expenses
• The salaries of the 4 sales ladies for June 16-30 has
not been recorded and has not been paid yet.
Salaries Expenses P4,000
Salaries Payable P4,000
To record accrued salaries expenses
Accrued Expenses
• The monthly 2% interest on the loan from Mega
bank has not been recorded and paid.

Interest Expense P1,000

Accrued Interest Expense P1,000
To record accrued interest expenses
DEFERRED INCOME
June 6 Ernie Garcia ordered 10K of Golden Rice and make a full
payment of 30,000 to be delivered to Ernie 1k every 5 days
starting June 15 which Rick forgot to record.

Income Method Liability Method

June 6 June 6

Cash P30,000 Cash P30,000

Sales P30,000 Unearned Sales P30,000

June 30 (4 kilos of rice delivered) June 30 (4 kilos of rice delivered)

Sales P18,000 Unearned Sales P12,000

Unearned Sales P18,000 Sales P12,000
Prepaid Expenses
June 13 Bought supplies P5,000 cash from National
Bookstore, only P2,000 are unused.

Asset Method Expense Method

June 13 June 13
Supplies P5,000 Supplies Expense P5,000
Cash P5,000 Cash P5,000
June 30 June 30
Supplies Expense P3,000 Supplies P2,000
Supplies Supplies Expense
P3,000 P2,000
 BAD DEBTS (EXAMPLE ONLY)
Allowance for Bad Debts P2,000; Sales P100,000; Accounts Receivable
P40,000

Based
Sales on Sales x10%
P100,000 10% = Based on Receivable
Receivable P40,00020%
x 20%
P10,000 =
P8,000
Bad Debt Expense P10,000
Allowance for Bad DebtP10,000 Bad Debt Expense P6,000
Allowance for Bad Debt P6,000
Total Allowance P12,000
Total Allowance P8,000
BAD DEBTS EXPENSE
Accounts Receivable P65,000 x 10%

Allowance for Bad Debts End P6,500

Less Allowance for Bad Debts Beg 0
Bad Debts Expense P6,500
 DEPRECIATION
COMPUTATIONS
Furniture JOURNAL ENTRIES
Depreciation Expense P833
(P80,000 / 8 years) = 10,000 Accumulated Depreciation Funiture P833
P10,000 / 12 mos x 1 Month
Depreciation Expense P833
Equipment
(180,000 / 5 years) = P36,000 Depreciation Expense P3,000

P36,000/12 mos x 1 month Accumulated Depreciation Equipment P3,000

Depreciation Expense
P3,000
MERCHANDISE
INVEMTORY END
June 5. He bought 100 kilos of rice for P100,000 P100,000

LESS THE FOLLOWING SALES FOR THE MONTH

June 7. Sold 30 kilos of rice to Ernie Co. P30,000
June 15 Deliver to Ernie Garcia 1 kilo 1,000
June 17 Sold 20 kilos of Rice to Mr. Jack Cool 20,000
June 20 Deliver to Ernie Garcia 1 kilo 1,000
June 25 Deliver to Ernie Garcia 1 kilo 1,000
June 29. Sold 5 kilos to Mang Kepweng Co 5,000
June 30 Deliver to Ernie Garcia 1 kilo 1,000
Total rice sold 59,000
MERCHANDISE INVENTORY END P41,000
 GENERAL JOURNAL
ADJUSTING ENTRIES
Date Particulars F Debit Credit
June 30 Rent Receivable 5,000.00
Rent Income 5,000.00
To record interest income

June 30 Salaries Expense 4,000.00

Salaries Payable 4,000.00
To record salaries expenses

June 30 Interest Expenses 1,000.00

Accrued Interest Expense 1,000.00
To record interest payable

June 30 Cash 30,000.00

Sales 30,000.00
To record deferred sales

June 30 Sales 18,000.00

Unearned Sales 18,000.00
To correct deferred sales

June 30 Supplies Expenses 3,000.00

Supplies 3,000.00
To adjust supplies

June 30 Bad Debts Expenses 6,500.00

Allowance for Bad Debts 6,500.00
To record allowance for bad Debts

June 30 Depreciation Expenses 833.00

Accumulated Depreciation Furniture 833.00
To record depreciation expense

June 30 Depreciation Expenses 3,000.00

Accumulated Depreciation Equipment 3,000.00
To record depreciation expense
 WORKSHEET ADJUSTED
ACCOUNTS TRIAL BALANCE ADJUSTMENTS TRIAL BALANCE INCOME STATEMENT BALANCE SHEET
DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT
CASH 130,000.00 30,000.00 d 160,000.00 160,000.00
ACCOUNTS
RECEIVABLES 65,000.00 65,000.00 65,000.00
SUPPLIES 5,000.00 f 3,000.00 2,000.00 2,000.00
FURNITURE 80,000.00 80,000.00 80,000.00
EQUIPMENT 180,000.00 180,000.00 180,000.00
ACCOUNTS PAYABLE 50,000.00 50,000.00 50,000.00
BANK LOAN 50,000.00 50,000.00 50,000.00
DICK CAPITAL 360,000.00 360,000.00 360,000.00
SALES 110,000.00 e 18,000.00 30,000.00 d 122,000.00 122,000.00
PURCHASES 100,000.00 100,000.00 100,000.00
SALARIES EXPENSE 4,000.00 4,000.00 b 8,000.00 8,000.00
UTILITIES EXPENSE 6,000.00 6,000.00 6,000.00
570,000.00 570,000.00

RENT RECEIVABLE 5,000.00 a 5,000.00 5,000.00

RENT INCOME a 5,000.00 5,000.00 5,000.00
SALARIES PAYABLE b 4,000.00 4,000.00 4,000.00
INTEREST EXPENSE c 1,000.00 1,000.00 1,000.00
INTEREST PAYABLE c 1,000.00 1,000.00 1,000.00
UNEARNED SALES e 18,000.00 18,000.00 18,000.00
SUPPLIES EXPENSE 3,000.00 f 3,000.00 3,000.00
BAD DEBTS EXPENSE 6,500.00 g 6,500.00 6,500.00
ALLOWANCE FOR BAD DEBTS g 6,500.00 6,500.00 6,500.00
DEPRECIATION
EXPENSES 833 h 3,833.00 3,833.00
3000 i
ACCUMU,ATED DEPRECIATION FURNITURE h 833.00 833.00 833.00
ACCUMU,ATED DEPRECIATION EQUIPMENT i 3,000.00 3,000.00 3,000.00
MERCHANDISE INVENRORY END 41,000.00 41,000.00

71,333.00 71,333.00 620,333.00 620,333.00 128,333.00 168,000.00 533,000.00 493,333.00

NET INCOME 39,667.00 39,667.00
168,000.00 168,000.00 533,000.00 533,000.00
 MR DICK COMPANY
ADJUSTED TRIAL BALANCE
FOR THE MONTH ENDED JUNE 30, 2007

ACCOUNTS
DEBIT CREDIT
CASH 160,000.00
ACCOUNTS RECEIVABLES 65,000.00
SUPPLIES 2,000.00
FURNITURE 80,000.00
EQUIPMENT 180,000.00
ACCOUNTS PAYABLE 50,000.00
BANK LOAN 50,000.00
DICK CAPITAL 360,000.00
SALES 122,000.00
PURCHASES 100,000.00
SALARIES EXPENSE 8,000.00
UTILITIES EXPENSE 6,000.00
RENT RECEIVABLE 5,000.00
RENT INCOME 5,000.00
SALARIES PAYABLE 4,000.00
INTEREST EXPENSES 1,000.00
INTEREST PAYALE 1,000.00
UNEARNED SALES 18,000.00
SUPPLIES EXPENSE 3,000.00
BAD DEBTS EXPENSE 6,500.00
ALLOWANCE FOR BAD DEBTS 6,500.00
DEPRECIATION EXPENSES 3,833.00
ACCUMU,ATED DEPRECIATION FURNITURE 833.00
ACCUMU,ATED DEPRECIATION EQUIPMENT 3,000.00
620,333.00 620,333.00