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P.roblem #7
Comprehensive Problem

. ractice on Dec. 1, 2019. The transaction

Edgar Detoya, tax consultant, began his P . s of
the firm are as follows :
Dec. 1 Detoya invested P150,000 ·in the firm .· ·
. ber to Recoletos Realty, ·PB,000.
Paid rent for Decem
2
2 Purchased supplies on account, P7,200 . .
3 Acquired P75,000 of office equipment, paying P37,000
down with the balance due in 30 days.
8 Paid P7,200 on account for supplies purchased.
14 Paid assistant's salaries for two weeks, PG,000.
20 Performed consulting services for cash, P20,000.
28 Paid assistant's salaries for two weeks, PG,000.
30 Billed clients for December consulting services, P48,000.
31 Detoya withdrew P12,000 from the business.
Required:

1. Open the following general ledger accounts, using the account numbers shown:
Cas.h (110); Accounts Receivable (120); Fees Receivable (130); Supplies (140); Office
Equipment (150); Accumulated Depreciation (155); Accounts Payable (210); Salaries
Payable (220); Detoya, Capital (310); Detoya, Withdrawals (320); Income Summary
(330); Consulting Revenues (410); Salaries Expense (510); Supplies Expense (520);
Rent Expense (530); and Depreciation Expense (540).

2. Journalize the December transactions and post to the ledger.

3. Prepare a_
nd complete the worksheet using the following information:
a. Supplies on hand at Dec. 31 amounted to P4, 700.
b. Salaries of Pl,800 have accrued at month-end.
c. Depreciation is P800 for December.
d. Detoya has spent 20 hours on a tax fraud case during December. When
completed in January, his work will be billed at P500 per hour. Note: The firm
uses the account Fees Receivable to reflect the amounts earned but not yet
billed.

4. Prepare an income statement, a statement of changes in equity; a balance sheet

and a statement of cash flows. . ·

5. Journalize and post adjusting and closing entries.

6. Prepare a post-closing trial balance.

7. Journalize and post the reversing entries .

 blerll #S
pro ehensive Problem
co111Pr
Nick Marasigan, upon completing a residency program ·at Harvard Medical Center,
or- blished a medical practice in San Pablo, Laguna. During October 2019, the first
es:~th of operations, the following transactions occurred :
rT1 •

Oct. Dr. Marasigan transferred P250,000 from his personal checking account to
a bank account, Dr. Nick Marasigan, M .D.
A medical clinic, Pl,000,000 and land, P250,000 were acquired by paying
PS0,000 in cash and issuing a 5-year, 20% note payable (interest is payable
every 6 months) for the Pl,200,000 balance.
-Acquired medical equipment costing P420,000 and medical supplies
amounting to P39,000 by paying PS9,000 cash and issuing a 24% note
payable, maturing in 6 months, for the P400,000 balance.
2 Acquired "all-in-one" insurance for a year, P20,000.
4 Received cash from.patients amounting to Pll 7,000.
7 Bought medical supplies on account from San Pablo Supply, P17,000.
10 , Paid salaries of nurses and office staff, P73,000.
12 Received P90,000 from the Laguna Experimental Drug Center for research
to be conducted by Dr. Marasigan over the next 3 months .
18 Billed patients P317,000 for services rendered .
21 Paid P23,000 for repairs to the medical equipment.
23 Paid the telephone bill, P3,000.
24 Bought medical equipment on account from Dr. De Leon, P45,000.
25 Collected P113,000 from patients billed on the 18th.
27 Paid P13,000 on account to San Pablo Supply.
30 Withdrew P200,000 in cash from the medical practice.
30 Paid PlS,000 dues to the Laguna Medical Association.

Required :

1. Establish the following accounts and account numbers in a ledger.

Accourt No. Account No.

Casli 110 Marasigan, Capital 310

Accounts Receivable 120 Marasigan, Withdrawals 320
Medical Supplies 130 Income Summary 330
Prepaid Insurance 140 Medical Revenues 410
Land 150 Research Revenues 420
Medical Building 160 Salaries Expense 510 ·
Accumulated Depreciation- Insurance Expense 520
Medical Building 165 Repairs Expense 530
Medical Equipment 170 Supplies Expense 540
 . by Prof. WIN Bailado
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ii '
Association Dues Expense S50
Accumulated Depreciation- Telephone Expense S60
Medical Equipment 175
Depreciation Expense-Bldg. 570
24% Notes Payable 210
Depreciation Expense-Equipt. 580
20% Notes Payable 220
Interest Expense 590
Accounts Payable 230
Salaries Payable 240
Interest Payable 250
Unearned Research Revenues 260

2. Record the transactions for the month of October in a journal (page l) and Post th
rd th0
entries to the ledger. Use balance sheet accounts to reco se transactions tha~
will later require adjustments.

3. Prepare a trial balance on a worksheet and record the followi_ng adjustments on the
worksheet.

a. Insurance for one month has expired.

b. Medical supplies on hand at month-end amounted to P21,000.
c. . Depreciation on the medical building and on the medical equipment is PS,Ooo
and P9,000, respectively.
d. Unearned research revenues in the amount of P30,000 have been earned.
e. Salaries of PSl,000 have accrued.
f. Interest on the 20% and 24% notes are P20,000 and P8,000, respectively.

4. Compl_ete the worksheet and prepare an income statement, a statement of changes

m equity, and a balance sheet.

5. Record the adjusting and closing entries in the journal (page 2) and post the entries
to the ledger. .

6. Prepare a post-closing trial balance.

7. Prepare the salaries and interest reversing entries in the journal (page 3) and post
them to the ledger.