JOSE RIZAL UNIVERSITY

ACC C101
Assignment #1

1. Duke Cray decides to open a cleaning and laundry service near the local college campus that will
operate as a sole proprietorship. Prepare journal entries to record the following transactions.

(1) Duke Cray invests Php20,000 in cash to start a cleaning and laundry business on June 1.
(2) Purchased laundry equipment for Php5,000 paying Php3,000 in cash and the remainder due in
30 days.
(3) Purchased laundry supplies for Php1,200 cash.
(4) Received a bill from Campus News for Php300 for advertising in the campus newspaper.
(5) Cash receipts from customers for cleaning and laundry amounted to Php1,500.
(6) Paid salaries of Php200 to student workers.
(7) Billed the Tiger Football Team Php200 for cleaning and laundry services.
(8) Paid Php300 to Campus News for advertising that was previously billed in Transaction 4.
(9) Duke Cray withdrew Php900 from the business for living expenses.
(10) Incurred utility expenses for month on account, Php400.

2. State the account to be debited and the account to be credited for the following transactions. Choose from the
following list of accounts: cash, accounts receivable, supplies, equipment, accounts payable, note payable,
capital, withdrawals, service revenue, utilities expense, and salary expense.

a) _Purchased equipment for cash.

b) _Performed services for cash.
d) _Purchased supplies for cash.
e) _Purchased equipment by issuing a note payable.
f) _Purchased supplies on account.
g) _Performed services on account.
h)_Received cash on account.
i)_ Paid a creditor on account.
j) _Paid salary of employees for the current period.

3. State whether the account should be debited or credited and the normal balance of the account for the items
listed below:

Account Recorded as a debit or Normal balance of the

credit account
a) Increase in Accounts payable
b) Decrease in Salary expense
c) Increase in Withdrawals
d) Decrease in Capital
e) Decrease Supplies
f) Increase in Accounts receivable
g) Decrease in Note payable
h) Decrease in Note receivable
i) Increase in Utilities expense
j) Decrease in Land
ANSWERS:
1.
NO. PARTICULARS DEBIT CREDIT
1 Cash 20,000
Owner’s Capital 20,000
2 Equipment 5,000
Cash 3,000
Accounts Payable 2,000
3 Supplies 1,200
Cash 1,200
4 Advertising Expense 300
Accounts Payable 300
5 Note Receivable 1,500
Service Revenue 1,500
6 Salaries Expense 200
Cash 200
7 Note Receivable 200
Service Revenue 200
8 Accounts Payable 300
Cash 300
9 Withdrawal 900
Cash 900
10 Utilities Expense 400
Accounts Payable 400

T-Balance

PARTICULARS DEBIT CREDIT

Cash 14,400
Note Receivable 1,700
Supplies 1,200
Equipment 5,000
Accounts Payable 2,400
Owner’s Capital 20,000
Service Revenue 1,700
Withdrawal 900
Salaries Expense 200
Advertising Expense 300
Utilites Expense 400
2.
NO, DEBIT CREDIT
a Equipment Cash
b Cash Service Revenue
d Supplies Cash
e Equipment Note Payable
f Supplies Accounts Payable
g Accounts Receivable Service Revenue
h Cash Accounts Receivable
i Accounts Payable Cash
j Salary Expense Cash

3.

Account Recorded as a Normal balance of

debit or credit the account
a) Increase in Accounts payable Credit Credit
b) Decrease in Salary expense Debit Debit
c) Increase in Withdrawals Debit Debit
d) Decrease in Capital Debit Credit
e) Decrease Supplies Credit Debit
f) Increase in Accounts receivable Credit Debit
g) Decrease in Note payable Debit Credit
h) Decrease in Note receivable Credit Credit
i) Increase in Utilities expense Debit Debit
j) Decrease in Land Credit Debit