e. From current year’s account payable.

Accounts payable 60,000

Less: Withholding taxes (3,000)
Net 57,000

Date Accounts payable 60,000  

(5.II.e)   Due to BIR   3,000
    Cash-Modified Disbursement System(MDS), Regular   57,000
       
      To recognize the payment of accounts payable    

Operating Expenses

f. Entity A pays for the following expenses:

Water 1,000
Electricity 5,000
Telephone 2,000
Janitorial 10,000
Security 12,000
Total 30,000
Less: Withholding taxes (2,000)
Net 28,000

Date Water Expenses 1,000  

(5.II.f) Electricity Expenses 5,000  
  Telephone Expenses 2,000  
  Janitorial Expenses 10,000  
  Security Expenses 12,000  
    Due to BIR   2,000
    Cash-Modified Disbursement System(MDS), Regular   28,000
    To recognize issuance of MDS checks as payment for    
      expenses    

Cash advances for travel:

g. Entity A grants a cash advance of P2,000 for the travelling expenses of an officer:

Date Advances to Officers and Employees 2,000  

(5.II.g
)   Cash - Modified Disbursement System (mds), Regular   2,000
       
      To recognize grant of cash for travel    
 The disbursements made above was are recorded in the ORS and RAOD.
 h. Liquidation of cash advance:

Date Traveling Expenses - Foreign 1,800  

(5.II.h
)   Advances to Officers and Employees   1,800
       
To recognize liquidation of cash advance for travel.
         

i. Receipt and deposit of refund for excess cash advance:

Date Cash - Collecting Officers 200  

(5.II.i.1)   Advances to Officers and Employees   200
    To recognize refund of escess cash advance for    
      travel.    
Date Cash - Treasury/Agency Deposit, Regular 200  
(5.II.i.2)   Cash - Collecting Officers   200
    To recognize remittance of the refund of excess    
      cash advance for travel.    
 Adjustment for the excess cash advance is made on the ORS and RAOD.

Issuance of office supplies to end users

j. Entity A issues office supplies worth P63,000 to end users.

Date Office Supplies Expense 63,000  

(5.II.j
)   Office Supplies Inventory   63,000
       
To record the issuance of office supplies to end users.
         

III. Capital Outlays (CO)

Purchase of Office Equipment

a. Receipt of delivery of purchased office equipment worth P300,000 from current year’s
obligation.

Office Equipment 300,000  

Date (5.III.a)   Accounts Payable   300,000
       
To recognize delivery of office equipment.
         
 b. Payment of accounts payable.

Accounts Payable 300,000

Less: Withholding taxes (20,000)
Net 280,000

Date Accounts Payable 300,000  

(5.III.b) Due to BIR   20,000
  Cash - Modified Disbursement System (MDS), Regular   280,000
      To recognize payment of accounts payable.    

IV. Remittances of amounts withheld

a. Entity A remits the taxes withheld through TRA.

Date Cash-Tax Remittance Advice 48,000  

(5.IV.a.1)   Subsidy from National Government   48,000
To recognize the constructive receipt of NCA for
      TRA.    
Date Due to BIR 48,000  
(5.IV.a.2)   Cash-Tax Remittance Advice   48,000
To recognize the constructive remittance of taxes
      withheld the BIR through TRA.    
(The amount is computed by adding all the Due to BIR accounts from the previous transactions.)

b. Entity A remits the following to the GSIS, Pag-IBIG and PhilHealth.

GSIS 9,000
Pag-IBIG 2,000
Philhealth 1,000
Total 12,000

Date Due to GSIS 9,000  

(5.IV.b) Due to Pag-IBIG 2,000  
  Due to PhilHealth 1,000  
    Cash-Modified Disbursement System (MDS), Regular   12,000
To recognize remittance to GSIS, Pag-IBIG and
      PhilHealth.    

c. The disbursements made above are to be recorded in the ORS and RAOD.

6. Billings, Collections & Remittances

a. Entity A bills the following reveue/income.
 Power supply system fees 100,000
Landing and parking fees 80,000
Total 180,000

Date Accounts Payable 180,000  

(6.a)   Power Supply System Fees   100,000
    Landing and Parking Fees   80,000
      To recognize billing income.    

b. Entity A collects P100,000 accounts receivable from the billing above and remits P90,000 of the
collection.

Date Cash - Collecting Officers 100,000  

(6.b.1
)   Accounts Receivable   100,000
      To recognize collection of current year's billed income.    
Date Cash-Treasury/Agency Deposit, Regular 90,000  
(6.b.2
)   Cash - Collecting Officers   90,000
      To recognize remittance of income to the BTr.    

*As a general rule, all revenues of an entity must be remitted to the BTr. However, there are some cases
where other laws permit an entity to remain some of its revenues for specific uses – thus, the
unremitted collection of P10,000 above (100K collection less 90K remittance).

c. Entity A collects P45,000 accounts receivable from prior year’s billings and remits total
collection.

Date Cash - Collecting Officers 45,000  

(6.c.1
)   Accounts Receivable   45,000
      To recognize collection of prior year's billed income.    
Date Cash-Treasury/Agency Deposit, Regular 45,000  
(6.c.2
)   Cash - Collecting Officers   45,000
      To recognize remittance of income to the BTr.    

d. Entity A collects unbilled service income of P370,000 and remits P340,000 of the total collection:
Permit fees 200,000
Registration fees 160,000
Other service income 10,000
Total Collection 370,000

Date Cash - Collecting Officers 370,000  

(6.d.1   Permit Fees   200,000
 )
    Registration Fees   160,000
    Other Service Income   10,000
      To recognize collection of unbilled service income.    
Date Cash-Treasury/Agency Deposit, Regular 340,000  
(6.d.2
)   Cash - Collecting Officers   340,000
      To recognize remittance of income to the BTr.    
Unbilled revenue/income – this refers to the fees from regulatory functions and collections of revenue
with no direct exchange of goods or services.

e. Entity A collects unbilled tax revenue through direct deposit in Authorize Agent Banks:

Immigration Tax 100,000

Total 100,000

Date Cash-Treasury/Agency Deposit, Regular 100,000  

(6.e)   Immigration Tax   100,000
To recognize collection and remittances of income
through Authorized Government Depository Banks
      (AGDB)/Government Servicing Banks (GSB).    

The collection is automatically remitted to the National Treasury because it is made through the
latter’s bank account.

7. Unadjusted trial balance

An Unadjusted trial balance is a list of the accounts in the General Ledger together with their
balances. Its purpose is to test the quality of total debits and total credits in the accounts.

Before preparing the unadjusted trial balance, the journal entries made above must be posted
first in the General Ledger.
 GENERAL LEDGER

ASSETS

Cash - Collecting Officers Cash-Treasury/Agency Deposit, Regular

beg. 5,000      
(5.II.i.1 (5.II.i.1
) 200 200 (5.II.i.2) ) 200

(6.b.1) 100,000 90,000 (6.b.2) (6.b.2) 90,000

(6.c.1) 45,000 45,000 (6.c.2) (6.b.2) 45,000

(6.d.1) 370,000 340,000 (6.d.2) (6.d.2) 340,000

  45,000 end. (6.e) 100,000  

  575,200 end.

Cash-Modified Disbursement System (MDS),

Regular Cash-Tax Remittance Advice
(4.a (5.IV.a.
) 600,000   1) 48,000  

(4.b (5.IV.a.2
) 25,000 218,000 (5.I.c)   48,000 )

  18,000 (5.II.c)   - end.

  4,000 (5.II.d)

  57,000 (5.II.e) Accounts Receivable

  28,000 (5.II.f) beg. 45,000  

  2,000 (5.II.g) (6.a) 180,000 100,000 (6.b.1)

  280,000 (5.III.b 45,000 (6.c.1)

 (5.IV.b
  12,000 )   80,000 end.
  6,000 end.
Office Supplies Inventory Buildings
(5.Iia
) 5,000   beg. 500,000  
(5.II.
b) 70,000 63,000 (5.II.j)   500,000 end.

  12,000 end.
Office Equipment

Accumulated Depreciation - Building beg. 150,000  

  150,000 beg. (5.III.a) 300,000

end. 150,000     450,000 end.

Accumulated Depreciation - Equipment Advances for Payroll

  60,000 beg. (5.I.c) 218,000  

(5.I.e
end. 60,000     218,000 )

  - end.

Advances to Officers and Employees

(5.II.g) 2,000  

  1,800 (5.II.h)

  200 (5.II.i.1)

  - end.
LIABILITIES

Accounts Payable Due to BIR

  20,000 beg.   20,000 (5.I.a)

  5,000 (5.II.a)   2,000 (5.II.c)

(5.II.c) 20,000 70,000 (5.II.b)   1,000 (5.II.d)

 (5.III.a
(5.II.d) 5,000 300,000 )   3,000 (5.II.e)

(5.II.e) 60,000   2,000 (5.II.f)

(5.III.b (5.IV.a. (5.III.b

) 300,000 2) 48,000 20,000 )

end. 10,000     - end.

Due to Officers and Employees Due to Pag-IBIG

  218,000 (5.I.a)   2,000 (5.I.a)

(5.I.e) 218,000 (5.IV.b) 2,000

end. -     - end.

Due to GSIS Due to PhilHealth

  9,000 (5.I.a)   1,000 (5.I.a)

(5.IV.b
) 9,000 (5.IV.b) 1,000
  - end.   - end.

EQUITY

Accumulated Surplus (Deficit)

  470,000 beg.
end
. 470,000  

INCOME

Immigration Tax Power Supply System Fees

  100,000 (6.e)   100,000 (6.a)
end end
. 100,000   . 100,000  

Permit Fees Landing & Parking Fees

  200,000 (6.d.1)   80,000 (6.a)
end end
. 200,000   . 80,000  

Registration Fees Subsidy from NG

  160,000 (6.d.1)   600,000 (4.a)
 end
. 160,000   25,000 (4.b)
48,000 (5.IV.a.1)
end
Other Service Income . 673,000  
  10,000 (6.d.1)
end
. 10,000  
EXPENSES

Salaries and Wages, Regular Electricity Expense

(5.II.f
(5.I.a) 200,000   ) 5,000  

  200,000 end.   5,000 end.

PERA Telephone Expense

(5.II.f
(5.I.a) 50,000   ) 2,000  

  50,000 end.   2,000 end.

Travelling Expenses - Foreign Janitorial Expense

(5.II.f
(5.II.h) 1,800   ) 10,000  

  1,800 end.   10,000 end.

Office Supplies Expense Security Expense

(5.II.f
(5.II.j) 63,000   ) 12,000  

  63,000 end.   12,000 end.

Water Expense
(5.II.f) 1,000  

  1,000 end.
UNADJUSTED TRIAL BALANCE
Accounts RCA CODE Debit Credit
Cash - Collecting Officers 10101010 45,000
Cash-Treasury/Agency Dep., Regular 10104010 575,200
Cash-MDS, Regular 10104040 6,000
Cash-Tax Remittance Advice 10104070 -
Accounts Receivable 10301010 80,000
Office Supplies Inventory 10404010 12,000
Buildings 10604010 500,000
Accumulated Depreciation - Buildings 10604011 150,000
Office Equipment 10605020 450,000
Accumulated Depreciation - Equipment 10605021 60,000
Advances for Payroll 19901020 -
Advances to Officers & Employees 19901040 -
Accounts Payable 20101010 10,000
Due to Officers and Employees 20101020 -
Due to BIR 20201010 -
Due to GSIS 20201020 -
Due to Pag-IBIG 20201030 -
Due to PhilHealth 20201040 -
Accumulated Surplus (Deficit) 30101010 470,000
Immigration Tax 40101040 100,000
Permit Fees 40201010 200,000
Registration Fees 40201020 160,000
Other Service Income 40201990 10,000
Power Supply System Fees 40202100 100,000
Landing and Parking Fees 40201020 80,000
Subsidy from NG 40301010 673,000
Salaries and Wages, Regular 50101010 200,000
 PERA 50102010 50,000
Traveling Expenses - Foreign 50201020 1,800
Office Supplies Expense 50203010 63,000
Water Expenses 50204010 1,000
Electricity Expenses 50204020 5,000
Telephone Expenses 50205020 2,000
Janitorial Expenses 50212020 10,000
Security Expenses 50212030 12,000  
Totals 2,013,000 2,013,000

(The accounts on the Unadjusted Trial Balance is arranged according to their sequence in the
Revised Chart of Accounts (RCA)).