GPR Accounting & Auditing Firm

Chart of Accounts
BALANCE SHEET ACCOUNTS INCOME STATEMENT ACCOUNTS

Acct. No. ASSETS

110 Cash Acct. No. REVENUE
120 Accounts Receivable 410 Service Fees
125 Allowance for Bad Debts
130 Prepaid Rent Expense
140 Prepaid Office Supplies EXPENSES
150 Property, Plant, Equipment 510 Bad Debts Expense
155 Accumulated Depreciation 520 Rent Expense
LIABILITIES 530 Salaries Expense
210 Accounts Payable 540 Supplies Expense
220 Salaries Payable 550 Depreciation Expense
230 Unearned Service Fees
OWNER’S EQUITY
310 Girlie, Capital

The opening balances of GPR Accounting & Auditing Firm as of January 1, 2019 are as follows:

Cash in bank P 1,217,691

Accounts receivable 101,400

Prepaid rent expense 70,000

Prepaid office supplies 8,980

Property, plant, equipment 1,750,000

Allowance for bad debts P 2,028

Accumulated depreciation 218,750

Accounts payable 130,014

Salaries payable 62,756

Unearned Service Fees 656,763

Girlie, Capital 2,077,760

INSTRUCTIONS:
 Analyze the business transactions. Write journal entries if doing so helps in the analysis.
 Plot the account title affected by the following business transactions in the T-accounts on
the last page.
 For the adjusting entries, write them down on the box provided. Plot the adjustments on their
respective T-accounts on the last page as well.
 Read each transaction CAREFULLY. Analyze.

Prepared by: Jobelle Candace F. Abrera, CPA, CTT

9/10/2019
 During the year, the following events and transactions occurred:
1) Total cash collections for the year totaled P 476,615, and total cash payments made amounted to
P 227,565.
2) Services rendered during the year: Services not yet rendered but paid for in advance by
- On account, P 87,247 clients during the year (The income method is used):
- For cash, P 136,043 -For cash, P 340,572
3) Aside from rendering service on account (as shown above, P 87,247), no other transactions affected the
Accounts Receivable account.
4) On August 1, 2019, paid cash for 8 months of advance rent for the office space, P 80,000.
The expense method is used for recording rental transactions. (The cash payment here of P80,000 is
already included in the total cash payments in number 1) which is P 227,565)
5) Paid cash in exchange for P 19,802 worth of supplies.
The asset method is used for supplies. (The cash payment here of P 19,802 is already included in the
total cash payments in number 1) which is P 227,565)
6) Paid off half of the Accounts Payable during the year. (The cash payment here is already included in
the total cash payments in number 1) which is P 227,565)
7) Paid off all Salaries Payable at the beginning of the year. (The cash payment here is already included in
the total cash payments in number 1) which is P 227,565)
8) No additions or withdrawals affected Girlie, Capital during the year

CHECKPOINT: Before you proceed with adjusting entries, plot the affected
accounts from above on the T-accounts. Don’t forget that the beginning balances
are placed first on T-accounts.
Check the equality of Total Debits and Total Credits. If balanced, proceed:

Year-end adjustments on December 31, 2019 are to be made:

1) Details in the rental contract revealed that monthly rent was P 10,000. Record the adjusting entry to
recognize the remaining prepaid rent expense, and to derecognize the used up rent expense for 12
months.
2) 2/3 of the total office supplies paid in advance were used up during the year. Recognize the
expense.
3) Of the ending balance of the receivables, 2% is estimated to be uncollectible.
4) Property, Plant, Equipment has a useful life of 16 years, with no salvage value. Recognize
depreciation.
5) Of the P 340,572 services not yet rendered but paid for in advance by clients during the year
(income method is used), 3/4 was actually rendered and earned by the end of the year. Record the
adjusting entry to recognize the unearned portion, and lessen the recorded income to reflect its true
balance.

Prepared by: Jobelle Candace F. Abrera, CPA, CTT

9/10/2019
 Cash Accounts Receivable Allowance for Bad Debts

Prepaid Rent Expense Prepaid Office Supplies Property, Plant, Equipment

Accumulated Depreciation Accounts Payable Salaries Payable

Unearned Service Fees Girlie, Capital Service Fees

Bad Debts Expense Rent Expense Salaries Expense

Supplies Expense Depreciation Expense

Prepared by: Jobelle Candace F. Abrera, CPA, CTT

9/10/2019
PREPARATION AND PRESENTATION OF BASIC FINANCIAL STATEMENTS

ASSETS
Current Assets with related Contra-asset

Noncurrent Assets with related Contra-asset

TOTAL ASSETS
LIABILITIES

OWNER’S EQUITY

TOTAL LIABILITIES AND OWNER’S EQUITY

INCOME

EXPENSES

NET PROFIT/LOSS

GPR ACCOUNTING AND AUDITING FIRM

STATEMENT OF CHANGES IN OWNER’S EQUITY
FOR THE YEAR ENDED, DECEMBER 31, 2019

Girlie, Capital- January 1, 2019

Add: Additional Investments
Profit
Less: Withdrawals
Loss
Girlie, Capital- December 31, 2019
Prepared by: Jobelle Candace F. Abrera, CPA, CTT
9/10/2019
 GPR ACCOUNTING AND AUDITING FIRM
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED, DECEMBER 31, 2019

Cash Flows from Operating Activities

Cash inflows
-
-
Cash outflows
-
-
-
-
-
NET CASH USED IN OPERATING ACTIVITIES
Cash Flows from Investing Activities
Cash inflows
-
-
Cash outflows
-
-
Cash Flows from Financing Activities
Cash inflows
-
-
Cash outflows
-
-
Net Increase(Decrease) in Cash
Add: Beginning Cash Balance
Cash Balance at the End of the Period

Prepared by: Jobelle Candace F. Abrera, CPA, CTT

9/10/2019