Norkan M.

Dimalawang
ACT110 – Mm
ACTIVITY 9

On 31 December 2017, end of the first year of operations, BLACKANGEL Consultancy presented
the following UNADJUSTED trial balance:

BLACKANGEL Consultancy
Preliminary Trial Balance
31-Dec-17

Cash P 50,000
Accounts Receivable 30,000
Office Supplies 5,000
Office Equipment 10,000
Office Furniture 15,500
Accounts Payable P 25,000
Black Angel, Capital 70,500
Black Angel, Drawings 10,000
Consultancy Fees 54,000
Rent Expense 5,000
Advertising Expense 12,000
Utilities Expense 12,000
Total P 149,500 P 149,500

Additional Information:

1. The office equipment has a service life of 10 years with no salvage value, while the office
furniture has an economic life of 15 years and a scrap value of P500.
2. Office supplies on hand at the end of the calendar year amount to P3,000.
3. The rent expense is for 2 years starting on January 1, 2017.
4. Salaries and Wages from Dec 16 to 31, 2017 have not been paid at year-end, 5,000.
5. P500 of the accounts receivable is doubtful as to collection.
6. Consultancy fees of P4,000 that were received but not yet earned are part of the
consultancy fees account.

Based on the above information, prepare (1) Adjusting Journal Entries, (2) Adjusted Trial balance
or Worksheet (3) Statement of Operations, (4) Statement of Financial Position (5) Closing Entries
(6) Post Closing Trial Balance and (7) Reversing Entries
(1) Adjusting Journal Entries
BLACKANGEL Consultancy
Adjusting Entry
December 31, 2017
Date Particulars PR Debit Credit
2017
Dec. 31 Depreciation Expense ₱1,000
Accumulated Depreciation Expense – ₱1,000
Office Equipment
To Record Depreciation of Office Equipment

31 Depreciation Expense 1,000

Accumulated Depreciation Expense – 1,000
Office Furniture
To Record Depreciation of Office Furniture

31 Office Supplies Expense 2,000

Office Supplies 2,000
To Record Office Supplies

31 Prepaid Rent 2,500

Rent Expense 2,500
To Record the Unexpired Portion of Rent

31 Salaries and Wages Expense 5,000

Accrued Salaries and Wages 5,000
To Set-up Unpaid Salaries and Wages

31 Doubtful Accounts 500

Allowance for Doubtful Accounts 500
To Record Provision for Doubtful Accounts

31 Consultancy Fees 4,000

Unearned Consultancy Fees 4,000
To Record Unearned Portion for Consultancy Fees
(2) Adjusted Trial Balance or 10-Column Worksheet
SURE REPAIR SERVICE SHOP

WORKSHEET

For the Month Ended, November 30, 2021

Unadjusted Trial Balance Adjustments Adjustment Trial Balance Income Statement Balance Sheet

ACCOUNT TITLES DEBITS CREDITS DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT

Cash ₱50,000 ₱50,000 ₱50,000

Accounts Receivable 30,000 30,000 30,000

Office Supplies 5,000 ₱2,000 3,000 3,000

Office Equipment 10,000 10,000 10,000

Office Furniture 15,500 15,500 15,500

Accounts Payable ₱25,000 ₱25,000 ₱25,000

Black Angel, Capital 70,500 70,500 70,500

Black Angel, Drawings 10,000 10,000 10,000

Consultancy Fees 54,000 ₱4,000 50,000 ₱50,000

Rent Expense 5,000 2,500 2,500 2,500

Advertising Expense 12,000 12,000 12,000

Utilities Expense 12,000 12,000 12,000

Total ₱149,500 ₱149,500

Depreciation Expense 2,000 2,000 2,000

Accumulated 1,000 1,000 1,000

Depreciation – OE

Accumulated 1,000 1,000 1,000

Depreciation – OF

Office Supplies Expense 2,000 2,000 2,000

Prepaid Rent 2,500 2,500 2,500

Salaries and Wages 5,000 5,000 5,000

Expense

Accrued Salaries and 5,000 5,000 5,000

Wages

Doubtful Accounts 500 500 500

Allowance for Doubtful 500 500 500

Accounts

Unearned Consultancy 4,000 4,000 4,000

Fees

TOTAL ₱16,000 ₱16,000 ₱157,000 ₱157,000 ₱36,000 ₱50,000 ₱121,000 ₱107,000

NET INCOME 14,000 14,000

TOTAL ₱50,000 ₱50,000 ₱121,000 ₱121,000

(3) Statement of Operation
BLACKANGEL Consultancy
Statement of Operations
For the year Ended December 31, 2017
Debit Credit
Consultancy Fees ₱50,000
Less: Operating Expenses
Rent Expense ₱2,500
Office Supplies Expense 2,000
Depreciation – Office Equipment 1,000
Depreciation – Office Furniture 1,000
Advertising Expense 12,000
Utilities Expense 12,000
Salaries and Wages Expense 5,000
Doubtful Accounts 500
Total ₱36,000 ₱50,000
Net Income ₱14,000

(4) Statement of Financial Position

BLACKANGEL Consultancy
Statement of Financial Position
As of December 31, 2017

Assets
Current Assets
Cash ₱50,000
Accounts Receivable 30,000
Less: Allowance for Doubtful Accounts (500) 29,500
Prepaid Rent 3,000
Office Supplies 2,500
Total Current Supplies ₱85,000
Non - Current Assets
Office Equipment ₱10,000
Less: Accumulated Depreciation – Office (1,000) ₱9,000
Equipment
Office Furniture 15,500
Less: Accumulated Depreciation – Office (1,000) ₱14,500
Furniture
Total Non - Current Assets ₱23,500
Total Assets ₱108,500

Liabilities
Current Liabilities
Accounts Payable ₱25,000
Accrued Salaries and Wages 5,000
Unearned Consultancy Fees 4,000
Total Liabilities ₱34,000

Owner’s Equity
Black Angel, Capital ₱74,500
Total Liabilities and Owner’s Equity ₱108,500
(5) Closing Entries
BLACKANGEL Consultancy
Closing Entries
December 31, 2017
Date Particulars PR Debit Credit
2017
Dec. 31 Consultancy Fees ₱50,000
Income and Expense Summary ₱50,000
To close Income Account

31 Income and Expense Summary 36,000

Rent Expense 2,500
Office Supplies Expense 2,000
Depreciation – Office Equipment 1,000
Depreciation – Office Furniture 1,000
Advertising Expense 12,000
Utilities Expense 12,000
Salaries and Wages Expense 5,000
Doubtful Accounts 500
To close Expense Account

31 Income Summary 14,000

Black Angel, Capital 14,000
To close Net Income to Capital

31 Black Angel, Capital 10,000

Black Angel, Drawing 10,000
To close Drawing Capital

(6) Post Closing Trial

BLACKANGEL Consultancy
Post-Closing Trial Balance
December 31, 2017
Account Title Debit Credit
Cash ₱50,000
Accounts Receivable 30,000
Allowance for Doubtful Accounts ₱500
Prepaid Rent 3,000
Office Supplies 2,500
Office Equipment 10,000
Accumulated Depreciation – Office Equipment 1,000
Office Furniture 15,500
Accumulated Depreciation – Office Equipment 1,000
Accounts Payable 25,000
Accrued Salaries and Wages 5,000
Unearned Consultancy Fees 4,000
Black Angel, Capital 74,500
Total ₱111,000 ₱111,000
(7) Reversing Entries
BLACKANGEL Consultancy
Reversing Entries
January 1, 2018
Date Particulars Debit Credit
2018
Jan 1 Rent Expense
Prepaid Rent
To Reverse Prepaid Rent

1 Accrued Salaries and Wages

Salaries and Wages Expense
To Reverse Salaries and Wages

1 Unearned Consultancy Fees

Consultancy Fees
To Reverse Consultancy Fees