VIESCA, ANJELIKA B.

BSA 1-A
ACCOUNTING 2

Requirement 1. Journalizing

WATANABE BUSINESS SOLUTIONS J1

DATE
ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT
2019
Dec. 1 Cash 110 2 0 0 0 0 0
Watanabe, Capital 310 2 0 0 0 0 0
- initial investment

3 Rent Expense 520 1 0 0 0 0

Cash 110 1 0 0 0 0
- paid rent

7 Cash 110 2 5 0 0 0
Consulting Revenues 410 2 5 0 0 0
- for services rendered

12 Gasoline Expense 540 6 0 0

Cash 110 6 0 0
- paid Treasure Super Service

14 Accounts Receivable 120 2 0 0 0 0

Consulting Revenues 410 2 0 0 0 0
- billed Mashiho, Inc.

17 Office Supplies 130 2 8 0 0

Accounts Payable 210 2 8 0 0
- bought office supplies on account

20 Utilities Expense 530 1 0 0 0

Cash 110 1 0 0 0
- paid telephone bill

21 Watanabe, Withdrawals 320 1 1 0 0 0

Cash 110 1 1 0 0 0
- for personal use

WATANABE BUSINESS SOLUTIONS J2

 DATE
ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT
2019
Dec. 24 Charitable Contributions Expense 550 1 0 0 0
Cash 110 1 0 0 0
- for personal use

27 Cash 110 2 0 0 0 0
Consulting Revenues 410 2 0 0 0 0
- for services rendered

28 Salaries Expense 510 1 2 0 0 0

Cash 110 1 2 0 0 0
- paid Yoshinori Manpower Services

28 Utilities Expense 530 7 5 0

Cash 110 7 5 0
- paid electric bill

29 Accounts Payable 210 1 0 0 0

Cash 110 1 0 0 0
- partial payment for Dec. 17

27 Cash 110 2 0 0 0 0
Consulting Revenues 410 2 0 0 0 0
- for services rendered

Requirement 2. Posting to the ledger

CASH ACCOUNT NO. 110

DATE DATE
 J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Dec. 1 initial investment J1 2 0 0 0 0 0 Dec. 3 paid rent J1 1 0 0 0 0
for services paid Treasure
7 J1 2 5 0 0 0 12 J1 6 0 0
rendered Super Service
for services
27 J1 2 0 0 0 0 20 Paid telephone bill J1 1 0 0 0
rendered
21 For personal use J1 1 1 0 0 0
Donated to
24 Philippine National J1 1 0 0 0
Red Cross
Paid Yoshinori
28 J2 1 2 0 0 0
Manpower Services
28 Paid electric bill J2 7 5 0
Partial payment for
29 J2 1 0 0 0
Dec. 17
TOTAL 2 4 5 0 0 0 TOTAL 3 7 3 5 0
31 BALANCE 2 0 7 6 5 0

ACCOUNTS RECEIVABLE ACCOUNT NO. 120

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Dec. 14 Billed Mashiho, Inc. J1 2 0 0 0 0
31 BALANCE 2 0 0 0 0

OFFICE SUPPLIES ACCOUNT NO. 130

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Bought office
Dec. 17 supplies on J1 2 8 0 0
account
31 BALANCE 2 8 0 0

ACCOUNTS PAYABLE ACCOUNT NO. 210

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Partial payment for
Dec. 29 J2 1 0 0 0 Dec. 17 Rendered services J1 2 8 0 0
Dec. 17
TOTAL 1 0 0 0 TOTAL 2 8 0 0
31 BALANCE 1 8 0 0
 WATANABE, CAPITAL ACCOUNT NO. 310
DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Dec. 1 Initial investment J1 2 0 0 0 0 0
31 BALANCE 2 0 0 0 0 0

WATANABE, WITHDRAWALS ACCOUNT NO. 320

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Dec. 21 for personal use J1 1 1 0 0 0
31 BALANCE 1 1 0 0 0

CONSULTING REVENUES ACCOUNT NO. 410

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
for services
Dec. 7 J1 2 5 0 0 0
rendered
14 billed mashiho, inc. J1 2 0 0 0 0
for services J2
27 2 0 0 0 0
rendered
TOTAL 6 5 0 0 0
31 BALANCE 6 5 0 0 0

SALARIES EXPENSE ACCOUNT NO. 510

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Paid Yoshinori
Dec. 28 J2 1 2 0 0 0
Manpower Services
31 BALANCE 1 2 0 0 0

RENT EXPENSE ACCOUNT NO. 520

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Dec. 3 Paid rent J1 1 0 0 0 0
31 BALANCE 1 0 0 0 0

UTILITIES EXPENSE ACCOUNT NO. 530

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Dec. 20 Paid telephone bill J1 1 0 0 0
28 Paid electric bill J2 7 5 0
 TOTAL 1 7 5 0
31 BALANCE 1 7 5 0

GASOLINE EXPENSE ACCOUNT NO. 540

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Paid Treasure
Dec. 12 J1 6 0 0
Super Service
31 BALANCE 6 0 0

CHARITABLE CONTRIBUTION EXPENSE ACCOUNT NO. 550

DATE DATE
J.R J.R
2019 EXPLANATION DEBIT 2020 EXPLANATION CREDIT
. .
Donated to
Dec. 24 Philippine National J1 1 0 0 0
Red Cross
31 BALANCE 1 0 0 0
Requirement 3. Trial Balance

Watanabe Business Solutions

Trial Balance
December 31, 2019

Account Title Debit Credit

Cash P 207,650
Accounts Receivable 20,000
Office Supplies 2,800
Accounts Payable P 1,800
Watanabe, Capital 200,000
Watanabe, Withdrawals 11,000
Consulting Revenue 65,000
Salaries Expense 12,000
Rent Expense 10,000
Utilities Expense 1,750
Gasoline Expense 600
Charitable Contribution
1,000
Expense
TOTAL P 266,800 P 266,800

Requirement 4. Income Statement

Watanabe Business Solutions

Income Statement
For the Year Ended December 31, 2020

Revenues
P
Consulting Revenue
65,000

Expenses
P
Salaries Expense
12,000
Rent Expense 10,000
Utilities Expense 1,750
Gasoline Expense 600
Charitable Contribution Expense 1,000
Salaries Expense 12,000
Total 25,350
PROFIT P 39,650
Requirement 5. Statement of Changes in Equity

Watanabe Business Solutions

Statement of Changes in Owner’s Equity
For the Year Ended December 31, 2019

Watanabe, Capital – 12/01/2019 P 200,000

Add: Additional Investments by
P –0–
Watanabe
Profit 39,650 39,650
Total P 239,650
Less: Withdrawals 11,000
mnn228,65
Watanabe, Capital – 12/31/2019 P
0

Requirement 6. Statement of Financial Position

Watanabe Business Solutions

Statement of Financial Position
As of December 31, 2019

Assets
Current Assets
Cash P 207,650
Accounts Receivable 20,000
Office Supplies 2,800
Total Current Assets P 230,450
TOTAL ASSETS P 230,450

Liabilities
Current Liabilities
Accounts Payable P 1,800
Total Liabilities P 1,800

Owner’s Equity
mnn228,65
Watanabe, Capital – 12/31/2019 P
0
TOTAL LIABILITIES AND OWNER’S
P 230,450
EQUITY
Requirement 7. Statement of Cash Flows

Watanabe Business Solutions

Statement of Cash Flows
For the Year Ended December 31, 2019

Cash Flows from Operating Activities:

Cash received from clients (P 25,000 + P20,000) P 45,000
Payment for office supplies (1,000)
Payment to employees (12,000)
Payment for office rent (10,000)
Payment for utilities (1,750)
Payment for gasoline (600)
Payment for charitable contribution (1,000)
Net cash provided by (used in) operating activities P 18,650
Cash Flows from Investing Activities:
Payments to acquire office equipment P -
Payments to acquire service vehicle
Net cash provided by (used in) investing activities -
Cash Flows from Financing Activities:
Cash received as investments by owner P 200,000
Payments for withdrawals by owner (11,000)
Net cash provided by (used in) financing activities 189,000
Net Increase (Decrease) in Cash P 207,650
Cash balance at the beginning of the period –
Cash balance at the end of the period P 207,650
VIESCA, ANJELIKA B. BSA 1-A

SAQ. 4.1, pg 40
Alternate Response. Write TRUE if the statement is correct and FALSE, if otherwise.

TRUE 1. Merchandise are goods bought for the primary purpose of selling these again
in the same form for profit.

TRUE 2. Purchase account is used for merchandise bought.

TRUE 3. Sales account is used for merchandise sold.
TRUE 4. Supplies purchased for business use is debited to the Purchase account.
TRUE 5. Equipment purchased for business use is debited to the Equipment account.
FALSE 6. Purchase is recorded on the credit side for merchandise bought.
FALSE 7. Sales is recorded on the debit side for merchandise sold.
TRUE 8. Discounts offered to the buyer to encourage early payment of accounts are
term or cash discounts.

TRUE 9. Cash discounts are called Sales Discounts from the buyer’s point of view.
FALSE 10. The Sales Discount account is a contra-income account and is recorded in the
debit for returns of goods sold.

TRUE 11. Purchase Returns and Allowance is a deduction from purchases of

merchandise due to damage or due to wrong specification.

TRUE 12. The terms 2/10, n/30 is an example of a cash discount.

TRUE 13. The terms less 5, less 10 is an example of a trade discount.
TRUE 14. Trade discount is given to encourage patronage (suki).
FALSE 15. Freight-in is considered selling expense.
FALSE 16. Freight-out is classified as cost of merchandise purchased.
TRUE 17. Goods should be recorded at their list price less any trade discounts involved.
FALSE 18. A credit term 2/10, n/30 means that the buyer may deduct a 2% discount from
the invoice price if payment is made within 30 days.

FALSE 19. A trading concern or merchandising form of business is one that buys goods
and raw materials for the primary purpose of changing these into finished
products, before finally selling these goods.

TRUE 20. Purchase Discount is used when merchandise bought on account is paid within
 the discount period.

SAQ 4.2, pg 41

Classify the accounts presented below. Choose from the given classifications. Copy
the account on your paper and write your answer opposite the account.

Accounts:

Asset 1. Building
Liability 2. Accounts Payable
Asset 3. Accounts Receivable
Income/Revenue 4. Sales
Cost 5. Purchases
Contra-asset deducted 6. Sales Returns and Allowances
from Sales
Contra-asset deducted 7. Purchase Discounts
from Purchases
Expense 8. Bad Debts
Contra-asset deducted 9. Allowance for Bad Debts
from Accounts Receivable
Expense 10. Depreciation
Drawing/Withdrawals 11. Reyes, Withdrawals
Expense 12. Freight-out
Asset 13. Cash
Expense 14. Salaries Expense
Capital 15. Reyes, Capital
Expense 16. Freight-in
Liability 17. Notes Payable
Asset 18. Equipment
Income/Revenue 19. Commission Income
Asset 20. Prepaid Insurance

SAQ 4.3, pg 41
Indicate the appropriate position of the following accounts by writing DEBIT or CREDIT.

1. Purchases + or increase DEBIT

2. Sales + or increase CREDIT
3. Accounts Receivable + or increase DEBIT
4. Accounts Payable + or increase CREDIT
5. Sales Discounts + or increase DEBIT
6. Cash - or decrease CREDIT
7. Accounts Payable - or decrease DEBIT
8. Purchase Discounts - or decrease CREDIT
9. Marquez, Capital + or increase CREDIT
 10. Salaries Expense + or increase DEBIT

SAQ 4.4, pg 42

Journalize the following transactions of Reyes Trading for the month of May, 2015.
REYES TRADING
J1
DATE
ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT
2015
May 1 Cash 9 8 0 0 0 0
Reyes, Capital 9 8 0 0 0 0
- initial investment

3 Purchases 9 5 0 0 0
Accounts Payable 9 5 0 0 0
- terms: 1/10, n/10

4 Accounts Payable 1 0 0 0
Purchases Returns and Allowances 1 0 0 0
- returned goods

5 Purchases 7 0 0 0 0
Accounts Payable 7 0 0 0 0
- terms: 2/10, n/30

6 Freight-in 6 0 0
Cash 6 0 0
- paid freight

9 Purchases 2 5 0 0 0
Cash 2 5 0 0 0
- purchased goods

10 Cash 8 2 5 0 0
Sales 8 2 5 0 0
- sold goods

11 Accounts Receivable 2 2 6 0 0
Sales 2 2 6 0 0
 - terms: 2/10, n/20

REYES TRADING J2

DATE
ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT
2015
May 12 Sales Returns and Allowances 1 6 0 0
Accounts Receivable 1 6 0 0
- return of goods sold May 11

13 Accounts Payable (95,000 – 1,000) 9 4 0 0 0

Purchase Returns and Allowances
9 4 0
(95,000 – 1,000 x 0.01)
Cash (95,000 – 1,000 – 940) 9 3 0 6 0
- paid account, May 3

15 Salaries Expense 5 8 0 0
Cash 5 8 0 0
- paid salaries

16 Cash 5 0 5 0 0
Sales 5 0 5 0 0
- sold goods

17 Freight-out 4 5 0
Cash 4 5 0
- paid freight

20 Cash (22,600 – 1,600) 2 1 0 0 0

Sales Discount (22,600 – 1,600 x 0.02) 4 2 0
Accounts Receivable (22,600 – 1,600 – 420) 2 0 5 8 0
- collected from customer

25 Rent Expense 7 0 0 0
Cash 7 0 0 0
- paid rent

28 Equipment 3 9 0 0 0
Accounts Payable 3 9 0 0 0
- bought on equipment on account
 REYES TRADING J3

DATE
ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT
2015
May 30 Reyes, Withdrawals 8 0 0 0
Cash 8 0 0 0
- for personal use

31 Purchases 3 5 0 0 0
Accounts Payable 3 5 0 0 0
- terms: 2/10, n/30
SAQ 5.1, pg 55

Requirement 1. Income Statement

ALDAB TRADING
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2015

SALES P 180,000
LESS: SALES RETURNS AND ALLOWANCES P 300
SALES DISCOUNTS 1,000 1,300
NET SALES P 178,700
LESS: COST OF GOODS SOLD
MERCHANDISE INVENTORY – JANUARY 1, 2015 P 9,000
PURCHASES P 60,000
LESS: PURCHASE RETURNS AND ALLOWANCES P 600
PURCHASE DISCOUNTS 400 1,000
NET PURCHASES P 59,000
FREIGHT-IN 400
NET COST OF PURCHASES 59,400
GOODS AVAILABLE FOR SALES P 68,400
LESS: MERCHANDISE INVENTORY – DECEMBER 8,000
31,2015
COST OF GOODS SOLD 60,400
GROSS PROFIT ON SALES 118,300
LESS: OPERATING EXPENSES
FREIGHT-OUT P 900
SALES AND WAGES EXPENSE 6,800
UTILITIES EXPENSE 5,000
SUPPLIES EXPENSE 700
BAD DEBTS EXPENSE 800
DEPRECIATION 2,000
TOTAL OPERATING EXPENSES 16,200
NET INCOME FROM OPERATIONS P 102,100
ADD: OTHER INCOME
RENT INCOME 4,000
TOTAL OPERATING AND OTHER INCOME P 106,100
LESS: FINANCE COST
INTEREST EXPENSE 900
PROFIT P 105,200
Requirement 2. Statement of Changes in Equity

ALDAB TRADING
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2015

ALDAB, CAPITAL, BEGINNING – JANUARY 1, 2015 P 193,550

ADD: NET INCREASE IN CAPITAL
PROFIT P 105,200
LESS: ALDAB, CAPITAL, END – DECEMBER 31, 2015 1,500 103,700
ALDAB, CAPITAL, END – DECEMBER 31, 2015 P 297,250
Requirement 3. Statement of Financial Position

ALDAB TRADING
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED DECEMBER 31, 2015

ASSETS
CURRENT ASSETS:
CASH ON HAND P 15,800
CASH IN BANK 249,000
PETTY CASH 1,000
ACCOUNTS RECEIVABLE P 12,00
LESS: ALLOWANCE FOR BAD DEBTS 500 11,500
NOTES RECEIVABLE 7,000
INTEREST RECEIVABLE 250
ACCRUED COMMISSION INCOME 800
MERCHANDISE INVENTORY – DECEMBER 31, 8,000
2015
PREPAID RENT EXPENSE 900
TOTAL CURRENT ASSETS P 294,750
PROPERTY AND EQUIPMENT
LAND P 79,000
FURNITURE AND EQUIPMENT P 15,500
LESS: ACCUMULATED DEPRECIATION 1,000 14,500
TOTAL PROPERTY AND EQUIPMENT 93,500
TOTAL ASSET P 388,250

LIABILITIES AND OWNER’S EQUITY

CURRENT LIABILITIES:
ACCOUNTS PAYABLE P 7,900
NOTES PAYABLE 12,500
ACCRUED TAXES EXPENSES 600
TOTAL CURRENT LIABILITIES P 21,000
NON-CURRENT LIABILITY
MORTGAGE PAYABLE 70,000
TOTAL LIABILITIES P 91,000

OWNER’S EQUITY
ALDAB, CAPITAL, END – DECEMBER 31, 2015 297,250
TOTAL LIABILITIES AND OWNER’S EQUITY P 388,250
 SAQ 5.2
Prepare the following for KEN TRADING, for the year ended December 31, 2015:
A. ADJUSTING ENTRIES

KEN TRADING - ADJUSTING ENTRIES J1

DATE
ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT
2015

Dec. 31 Interest Receivable 1 6 0 0

Interest Income
1 6 0 0
- to take up unrecorded Interest Income

31 Rent Receivable 2 6 0 0
Rent Income
2 6 0 0
- to take up unrecorded Rent Income

31 Interest Expense 1 2 0 0
Interest Payable
1 2 0 0
- to take up unrecorded Interest Expense

31 Salaries Expense 6 0 0 0
Salaries Payable
6 0 0 0
- to take up unrecorded Salaries Expense

31 Bad Debts Expense (400,000 x 0.01) 4 0 0 0

Allowance for Bad Debts
4 0 0 0
- to take up unrecorded Bad Debts Expense

Depreciation Expense (204,000 – 4,000) 2 0 0 0 0

31
10 years
Accumulated Depreciation 2 0 0 0 0
- to take up unrecorded Depreciation Expense

31 Merchandise Inventory, December 31 7 5 0 0

Income Summary Account
7 5 0 0
 B. REVERSING ENTRIES

KEN TRADING - REVERSING ENTRIES J1

DATE
ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT
2015

Jan. 1 Interest Income 1 6 0 0

Interest Receivable
1 6 0 0
- to reverse adjusting entry made

1 Rent Income 2 6 0 0
Rent Receivable
2 6 0 0
- to reverse adjusting entry made

1 Interest Payable 1 2 0 0
Interest Expense
1 2 0 0
- to reverse adjusting entry made

1 Salaries Payable 6 0 0 0
Salaries Expense
6 0 0 0
- to reverse adjusting entry made

1 Allowance for Bad Debts 4 0 0 0

Bad Debts Expense
4 0 0 0
- to reverse adjusting entry made

1 Accumulated Depreciation 2 0 0 0 0
Depreciation Expense
2 0 0 0 0
- to reverse adjusting entry made

1 Income Summary Account 7 5 0 0

Merchandise Inventory, December 31
7 5 0 0
- to reverse adjusting entry made
SAQ 5.3, pg 56

IDENTIFICATION. Identify what is described in the following statements.

Adjusting Entries 1. These are journal entries made usually at the end of the accounting
period to correct the balances of some accounts.

Worksheet 2. It is a working paper used in accounting to facilitate the preparation

of adjusting entries, financial statements and closing entries.

Cash Basis 3. It is a method of recording wherein income are recorded when cash
is received while expenses are recorded when cash is paid.

Accrual Basis 4. It is a method of recording wherein income is recorded when earned

regardless of when cash is received or collected, while expense is
recorded when incurred regardless of when paid.

Allowance for Bad Debts 5. This account is classified as contra-asset account and is deducted
from Accounts Receivable, for amounts that may not be collected.
6. This refers to the amount of Accounts Receivable that may not be
Bad Debts collected for the period.

Accumulated Depreciation 7. This account is classified as contra-asset account and is deducted

from Property, Plant and Equipment.
Depreciation 8. This refers to the lowering of value of Property, Plant and Equipment
(except Land) due to constant use or passage of time.
Closing Entries 9. These are journal entries made at the end of the accounting period
to bring nominal accounts to zero balance for proper determination
of income and expenses for the period.

Reversing Entries 10. These are journal entries which are the reverse or opposite of some
adjusting entries, made usually at the beginning of the next
accounting period.

Post-Closing Trial 11. This is a Trial Balance prepared after all nominal accounts are
Balance closed and is composed of real accounts.

Real Accounts 12. These are the Statement of Financial Position or Balance Sheet
accounts like assets, liabilities and equity.

Nominal Accounts 13. These are the Income Statement accounts like income, costs and
expenses.

Statement of Changes in 14. This financial statement bridges the Income Statement and
Equity Statement of Financial Position.

Merchandise Inventory, 15. This account is found in the Income Statement as a deduction from
December 31 cost, and the Statement of Financial Position as part of the current
assets.