Unisite Subdivision, Del Pilar, City of San Fernando, 2000 Pampanga, Philippines

Online Class Task #1 in Fundamentals of Accountancy, Business, and Management 1

GENERAL INSTRUCTIONS:
Prepare the Journal and Adjusting Entries) OF ABC ELECTRONIC REPAIR SERVICES FOR THE
MONTH OF DECEMBER 2019.

December 1. Mr. Allen Baustita Castro started ABC Repair Service by investing 500,000 cash,
electronic equipment worth 100,000 with salvage value of 20,000 and estimated
useful life of 2,190 days and an electronic supply worth 5,000

Cash 500,000
Electronic Equipment 100,000
Electronic Supplies Expense 5,000
Mr. Castro 605,000

Adjusting Entries:
Dec. 31 Depreciation Expense 1111.11
Accumulated Depreciation – electronic equip. 1111.11
(100,000 – 20,000 /6/12)

December 2. ABC Electronic Repair Services paid 2 months advance rent for the business, 30,000.

Rent Expense 30,000

Cash 30,000

Adjusting Entries:
Dec. 31 Prepaid Rent 15,000
Rent Expense 15,000

December 5. ABC Electronic Repair Services paid registration and licensing fees for the business,
5,000.

Taxes and Licenses Expense 5,000

Cash 5,000

December 6. The Company acquired tables, chairs, shelves, and other fixtures for a total of 50,000
through notes with interest rate of 17% payable within 30 days. The said furniture
and fixtures have an estimated useful life of 5 years. The assumed salvage value of
furniture and fixtures after 5 years is 20% of the acquisition cost.

Furniture and Fixtures 50,000

Notes Payable 50,000

December 31. Depreciation Expense 666.67

Accumulated dep – F&F 666.67
(50,000 -10,000/5/12)

December 31. Interest Expense 582.19

Interest payable 582.19
(50,000 *17% *25/365)
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Activity 1
Prepared by: Mr. Albert B. Martinez, LPT, MBA
 Unisite Subdivision, Del Pilar, City of San Fernando, 2000 Pampanga, Philippines

December 7. The Company acquired service equipment for 40,000. The Company paid a 40%
down payment, 25% on account and the remaining balance will be paid after 60 days
through notes and issue 15% interest rate. The estimated useful of equipment is
3,650 days and with salvage value of 15,000.

Service Equipment 40,000

Cash 16,000
AP 10,000
NP 14,000

December 31. Depreciation Expense 208.33

Accumulated dep – S.E 208.33
(40,000 -15,000/10/12)

December 31. Interest Expense 230.14

Interest payable 230.14
(14,000 *25% *24/365)

December 8. ABC Electronic Repair Services purchased electronic supplies on account amounting
to 3,500.

Electronic supplies expense 3,500

AP 3500

December 9. The Company received advances services from clients worth 40,000 to be completed
on January 05.

Cash 40,000
Electronic Service Income 40,000

December 31. Electronic Service Income 8,000

Unearned Electronic Service Income 8,000

December 12. The Company rendered services on account worth 60,000.

AR 60,000
Electronic Service Income 60,000
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Activity 1
Prepared by: Mr. Albert B. Martinez, LPT, MBA
 Unisite Subdivision, Del Pilar, City of San Fernando, 2000 Pampanga, Philippines

December 14. Rendered services to a big corporation worth 70,000. Half of the sales were received
through cash, 35% on credit and the remaining balance were received through notes
with interest bearing rate of 16% payable within 30 days.

Cash 35,000
AR 24,500
NR 10,500
Electronic Service Income 70,000

December 31. Interest receivable 78.25

Interest income 78.25
(10,500*16% *17/365)

December 16. The Company collected 95% from the customers on December 12 transaction.

Cash 57,000
AR 57,000

December 18. The Company paid 17.5% of the total accounts payable.

AP 2362.50
Cash 2362.50

December 20. The Owner withdrew 12,000 cash due to an emergency need from the company.

Withdrawal 12,000
Cash 12,000

Additional Information:
1. 80% of the supplies had been used up and thus had already been incurred.
Dec. 31. Unused supplies 1,700
Supplies expense 1,700
(8,500*. 20)

2. 80% of the service had already been completed and thus had already been earned. (ok na)
3. 8% of the total accounts receivables will remain uncollected.
Dec. 31 Bad Debts Expense 2,200
Allowance for Doubtful Accounts 2,200
(27,500 * 8%)

4. Use Expense and Revenue Method for journalizing the transactions.

Additional Question:
1. How much is the total cash before and after adjustments?
566,637.50 and 566, 637.50

2. How much is the total liability before and after adjustments?

Prepared by:
75,137,50 and 83,949,83
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Mr. Albert B. Martinez, LPT, MBA

Activity 1
Prepared by: Mr. Albert B. Martinez, LPT, MBA