I.

Record the following transactions and prepare a preliminary trial balance for the month
ended January 2014 for Manriquez Shop.

Jan 2 A. Manriquez sold his lot costing P100,000 for P150,000 and invested the
proceeds in a Motor repair shop.
3 Bought repair supplies from Manila Trading, P8,850. Terms: P850 down; P
4,500, 15-day, 6% note; balance payable at the end of the month.
4 Deposited P12,000 with Filipino Bank.
6 Received P 5,000 for services rendered to walk in customers. Deposited the
same with Filipino Bank.
7 Rendered services to Fernando Galvez, P4,500. Terms: P1,500 down; P2,000,
20-day, 6% note; balance payable at the end of the month.
9 Issued a check to Manila Trading to apply on account, P1,800.
10 Received a check from F. Galvez to apply on account.
11 Purchased store equipment from Philco Trading, P15,000, on account.
13 Issued a check to Manila Trading in full of account.
14 Issued a check to Vasquez Bros. for repair supplies bought, P2,500. Terms:
cash, less 3% discount.
15 Received a 60-day, 6% note for P3,000 from L. Marte for services rendered to
him.
16 Returned supplies worth P250 to Vasquez Bros. and received a check for it.
16 Collected the account of F. Galvez in full.
17 The owner took home repair supplies costing P 750 for his family’s use.
18 Paid the note issued to Manila Trading with a check.
21 Gave a salary advance of P1,000 cash to an employee.
24 A company check was issued in full payment of the owner’s personal debt
evidenced by his 30-day, 6% note for P8,000.
27 Collected the note of F. Galvez.
30 Cash collection from various clients, P 12,000.
31 Paid in cash salaries of P15,000 from which deductions were made as follows:
For SSS premiums P 400
For Withholding Tax 250
For Salary Advance 1,000
II. Prepare the necessary adjusting entries. ( disregard any explanation)

a. Of the P12,000 balance of the Unexpired Insurance account, P9,000 expired

during the current year.

b. Store supplies debited to the Store Supplies Expense account during the year
amounted to P28,750. As of December 31, P11,500 is unused.

c. Furniture costing P24,800 was acquired on April 1 of the current year. It has
an estimated scrap value of P4,800 at the end of its useful life of 5 years.

d. Doubtful accounts receivable is estimated at 2 ½ % of income earned. Total

income earned during the year amounted to P1,400,400.

e. Rent for six months from August 1 was collected and recorded under the Rent
Income account, P60,000.

f. Rent for six months from October 16 was paid and recorded under the rent
expense account, P90,000.

g. Interest collected and credited to Interest Income account, for the period of 45
days from December 16, P1,800.

h. Of the P7,550 balance of the Royalty Income account, P 2,800 is earned

during the current year.

i. Doubtful accounts receivable is estimated at 1 ½ % of the balance of accounts

receivable. As of December 31 of the current year, the trial balance of the
enterprise reflects: accounts receivable, P225,000; allowance for doubtful
accounts, P1,500.

j. Office equipment costing P46,000 was acquired on January 5 of the current

year. The equipment was placed in actual use on April 1 of the current year.
The equipment has an estimated scrap value of P4,000 at the end of its useful
life of 7 years.