GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L.

BERNABE

Name:____________________ Year& section:___________

Activity 4-1
On October 1, 2020 Aaron Go opened Big A Repair Shop. The following transaction occurred during the
month.
2020
Oct 1 Aaron Go invested cash P50,000 and equipment costing P150,000
1 Purchased supplies on account P15,000
2 Paid three month’s rent in advance P9,000
10 Received P10,000 cash for services rendered to customers
13 Paid wages of mechanics P4,500
18 Paid in full supplies purchased on account
22 Received P12,000 cash from customers for services rendered
25 Withdrew cash P5,000 for personal expenses
27 Paid wages of mechanics P4,500
31 Received P9,000 from customers for services rendered
Using the two-column journal given below, journalize the foregoing transactions.
GENERAL JOURNAL
Page 1
Post
Date Description Ref Debit Credit
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
Activity 4-2
 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

Using the transactions of Big A repair Shop for month of October 2020, transfer the entries from the
journal to the ledger using the following ledger accounts.

ACCOUNT: CASH ACCOUNT NO. 11

Date Items PR Debit Date Items PR Credit
               
               
               
               
               
               

ACCOUNT: PREPAID RENT ACCOUNT NO. 13

Date Items PR Debit Date Items PR Credit
               
               
               

ACCOUNT: SUPPLIES ACCOUNT NO. 15

Date Items PR Debit Date Items PR Credit
               
               
               

ACCOUNT: EQUIIPMENT ACCOUNT NO. 17

Date Items PR Debit Date Items PR Credit
               
               
               

ACCOUNT: ACCOUNTS PAYABLE ACCOUNT NO. 21

Date Items PR Debit Date Items PR Credit
               
               
               

ACCOUNT: AARON GO, CAPITAL ACCOUNT NO. 31

Date Items PR Debit Date Items PR Credit
               
               
               

ACCOUNT: AARON GO, DRAWING ACCOUNT NO. 32

Date Items PR Debit Date Items PR Credit
               
               
               
 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

ACCOUNT: SERVICE FEE ACCOUNT NO. 41

Date Items PR Debit Date Items PR Credit
               
               
               

ACCOUNT: WAGES EXPENSE ACCOUNT NO. 51

Date Items PR Debit Date Items PR Credit
               
               
               

Activity 4-3:
Prepare a trial balance for Big A Repair Shop as of October 31, 2020.
__________________
__________________
__________________

Debit Credit

Activity 4-4
Determine whether the following errors, each considered individually, will cause the trial balance
total to be equal or still be equal. Check the appropriated column.

UNEQUAL EQUAL
1
. A receipt of P5,000 for services rendered was recorded
as a debit to Cash P500 and a credit to Service Fee P500    
2
. A fee of P4,500 earned and due from a client was not
debited to Accounts Receivable or credited to Service Fee
because the cash has not been received    
3
. A withdrawal of P3,000 by the owner was journalized and
posted as a debit to Salary Expense P3,000 and a credit to
Cash P3,000    
4
. A payment of P7,500 for equipment purchased was posted
as a debit to Equipment P7,000 and a credit to Cash
P7,500    
5
. A payment of P4,500 to a creditor was posted as a credit
to Accounts Payable, P4,500 and a credit to Cash P4,500    
 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

Activity 4-5
Given below are selected transactions during the month and the erroneous journal entries are
made. Make the necessary corrections or prepare correcting entries when necessary.
1. Purchased supplies on account, P3,000
Entry made:
Supplies …………………3,000
Cash ………………………..3,000
Note: The error was discovered prior to posting to the ledger
2. Received cash of P40,000 for services rendered.
Entry made:
Cash……………………..40,000
Accounts Receivable………..40,000
Note: Entry has already been posted to the ledger
 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

Problem 4-1
The following transactions of Cee Caterer, operated by Lily Cee, occurred during the month of November
2020
Nov 1 Lily Cee made an initial investment of the following
Cash 100,000
Equipment 50,000
3 Bought and paid for tables and chairs P30,000
4 Purchased equipment’s for Shervicks Co. on credit P10,000
8 Received P5,000 for services at a party
9 Paid P2,000 for food used at the party
15 Billed Wella Dy P4,000 for the catering service at her son’s wedding
16 Paid P2,000 for food served at the wedding
Paid the month’s rent for half-month P2,000
18 Collected P2,000 from Wella Dy as partial settlement of the
amount due from her
19 General expenses paid P1,000
23 Received P20,000 from Metrobank Bank Employees Association
for the catering service at their first anniversary
24 Paid P10,000 for food served at the party
31 Paid the other half of the month’s rent P2,000
Paid salaries for the month P4,000
Received P10,000 from Gee Gee for her daughter's birthday party
Paid P7,000 for food served at the party

Required: Record the above transactions in a two-column journal using the following accounts: Cash, Accounts
Receivable. Furniture and Fixtures, Equipment, Accounts Payable, Lily Cee, Capital, Service Fee, Food Expense,
Rent Expense, Salaries Expense, General Expense
 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

Problem 4-2
May Tan established a sole proprietorship, to be known as City Drycleaners on October 18, 2020. During the
remainder of the month she completed the following business transactions:
Oct 18 Tan transferred cash from a personal bank account to an account to be used for
the business, P200,000
18 Purchased equipment on account, P20,000
18 Purchased supplies for cash, P5,000
18 Paid rent for period of November 1 to end of the month, P6,000
20 Purchased Truck for P200,000 paying P100,000 cash and giving a note
payable for the remainder
20 Received cash for job completed, P8,000
22 Purchased supplies on account, P4,000
23 Paid wages of employees, P6,000
23Paid premiums on property and casualty insurance, P5,000
25 Paid creditor for equipment purchased on July 18, P10,000
26 Recorded sales on account and sent invoices to customers, P45,000
29 Received cash for job completed, P10,000
29 Received an invoice for truck expenses, to be paid on December, P2,500
30 Paid utilities expense, P3,000
30 Paid miscellaneous expenses, P2,800
30 Received cash from customers on account, P28,000
30 Paid wages of employees, P6,000
30 Withdrew cash for personal use, P7,000
Instruction:
1. Open a ledger of two column accounts for City Drycleaners using the following titles and account numbers:
Cash 11, Accounts Receivables 12, Supplies 13, Prepaid Rent 14, Equipment 15, Truck 16, Notes Payable
21, Accounts Payable 22, May Tan, Capital 31, May Tan, Drawing 32, Sales 41, Wages Expenses 51,
Insurance Expense 53, Utilities Expense 54, Truck Expense 55 and Miscellaneous Expense 59
2. Record each transaction in column journal, using the account titles given
3. Post the journal to the ledger, inserting appropriate posting references as each item is posted.
4. Determine the balances of the accounts in the ledger.
5. Prepare a trial balance.
 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

Problem 4-3
Cyris Xerxes Opened a business college and a public stenographic service. The following are his
transactions for the first month of his operations:
2020
Oct 1 Cyris Xerxes made an initial investment composed of the following:
Cash P 100,000
Computer 30,000
Desks, chairs and tables 15,000
1 Rented a building and paid rent for August, P 7,000
2 Bought supplies for cash, P 3,000
3 Purchased a photocopy machine from Lucio Tan for P 5,000, paying
P 2,000 cash and giving a note for the balance.
4 Collection in cash for stenographic work, P 5,000
10 Paid advertising, P 5,000 and office expenses P 300
11 Received P 40,000 cash for tuition
13 Sent a bill to Ledesma Brothers for stenographic work P 800
15 Paid salaries, P 2,000
20 Sent a bill to Alvin Teng, an Attorney for stenographic work, P 1,200
22 Borrowed P 15,000 from East West Bank, giving a note therefor
23 Bought an automobile for business use, P 50,000, paying
P 20,000 and giving a note for balance
27 Stenographic fees collected in cash, P 4,000
28 Collected P 3,500 cash for tuition
30 Income collected and billed:
Cash collected from students P 4,000
Cash collected for stenographic work 2,000
Notes accepted from students 6,000
Tuition fees billed to others students 2,600
30 Expenses paid are salaries, P 1,500 and office expenses, P 500
Billing statement received from:
Petron Oil Company for oil and gas, P500
Star Printing Press for advertising, P600

Required:
Journalize and post T-accounts the above transactions by using the chart of accounts given.
Chart of Accounts
Assets Revenue
11 Cash 41 Stenographic Service Fee
12 Notes Receivable 42 Tuition Fee
13 Accounts Receivable
14 Supplies Expenses
15 Library 51 Rent Expense
16 Equipment 52 Advertising expense
17 Furniture 53 Office Expense
18 Automobile 54 Salaries Expense
55 Oil and Gas Expense
Liabilities
 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

21 Notes Payable Capital

22 Accounts Payable 31 Cyris Xerxes, Capital

b. Prepare a trial balance

Problem 4-4
The preliminary trial balance of SY Company presented below does not balance. When the ledger and
other records are viewed, you discover the following:
1. The debits and the credits in the cash account total P57,000 and P47,200 respectively.
2. A receipt of P300 from a customer on account was not posted to the accounts receivable account
3. A payment of P800 to a creditor on account was not posted to the accounts payable account
4. The balance of the equipment account is P17,800
5. Each account had a normal balance
SY COMPANY
Trial Balance
October 30, 2020

Debit Credit
Cash 57,000
Accounts Receivable 13,700
Prepaid Insurance 1,500
Equipment 19,600
Accounts Payable 9,600
Salaries Payable 1,000
Ann Sy, Capital 30,100
Ann Sy, Drawing 1,800
Service Revenue 13,000
Salary expense 6,800
Advertising Expense 1,000
Miscellaneous Expense   800
99,100 56,800

Instruction: prepare a corrected trial balance

 GE 117+ FUNDAMENTALS OF ACCOUNTING – PROF. CYNTHREN L. BERNABE

Problem 4-5
Given below are the number of errors in recording transactions. Assuming that posting to the ledger
accounts have been completed, give the necessary correcting entries that should be made:
1. A P2,000 payment to Salary Expense was charged to supplies
2. A cash withdrawal of P5,000 was recorded as debit to Rene Co, Capital and a credit to cash
3. Cash of P3,400 received from a customer on account was recorded as a debit to cash and a credit
to Account Receivable for P4,300
4. Equipment of P20,000 for cash was recorded as a debit to buildings and credit to Accounts
Payable
5. Three months rent of P15,000 was recorded as a debit to Prepaid Insurance and a credit to Cash.