Group 3

Transactions:
E. Mortiz, a young lawyer, completed the following transactions during March of the current yea

March 1 – Began the practice of law by investing P30, 000 in cash and a law library having a fair
March 2 – Purchased P42, 000 of office equipment, paying P12, 000 down payment and giving a
March 3 –    Purchased P2, 500 office supplies and P15, 000 office equipment        
                   from Office Supply Trading on credit.
March 6 –   Completed legal work for R. Moore and collected P12, 000 in full 
                   payment.
March 10 – Paid insurance premium P550.
March 15 – Completed legal work for United Bank on credit and billed it 
                   P12, 000 for the work done.
March 15 – Paid the salary of the secretary P6, 000.
March 18 – Paid Office Supply Trading for the items purchased on the third of 
                   the month.
March 25 - Received a check from United Bank as full payment of its account.
March 28 – E. Mortiz withdrew P8, 000 from the business for his personal use.
March 30 – Paid the salary of the secretary, P6, 000.
March 31 – paid P60 interest expense and P1, 000 installment due on the note 
                   payable.
March 31 – Paid the monthly utility bills, P2, 500
arch of the current year:

aw library having a fair value of P150,000.

payment and giving a Promissory note for the balance.
ment        
E. Mortiz, Law Firm
Chart of Accounts

Account No. Account Title

100 ASSETS
110 Cash
120 Accounts Receivable
130 Office Supplies
140 Office Equipment
150 Law Library 
200 LIABILITIES
210 Notes Payable
220 Accounts Payable
300 EQUITY
310 E. Mortiz, Capital
320 E. Mortiz Drawing
400 REVENUE
410 Service Income
500 EXPENSE
510 Insurance Expense
520 Salaries Expense
530 Interest Expense
540 Utility Expense
Analyze the effects of transaction on the accounting equation by writing  increase or decrease on

Transactions Assets Liabilities Owner’s Equity

Mar-01 increase increase
Mar-02 increase increase
Mar-03 increase increase
Mar-06 increase
Mar-10 decrease
Mar-15 increase
Mar-15 decrease
Mar-18 decrease decrease
Mar-25 increase & decrease
Mar-28 decrease decrease
Mar-30 decrease
Mar-31 decrease decrease
Mar-31 decrease
ting  increase or decrease on the corresponding accounts.

Income Expense

increase
increase
increase
increase

increase
increase
increase
 E. Mortiz Law Firm

General Journal  Page 1

Date Account Title And Description PR Debit Credit
2022
March 1 Cash 110 30,000
Law library  150 150,000
    E.Mortiz, Capital 180,000
          To record initial investment

2 Office Equipment 140 42,000

    Cash 110 12,000
    Notes Payable 210 30,000
To record the balance w/ promissory note

3 OfficeSupply 130 2,500

Office Equipment 140 15,000
    Account Payable- Office Supply Trading 220 17,500
       To record bought supplies            

6 Cash 110 12,000

      Service Income 410 12,000
           To record service income from R. Moore

10 Insurance Expense 510 550

      Cash 110 550
          To record paid Insurance 

15 Account Receivable - United Bank 120 12,000

Service income 410 12,000
         To receive service income 
15  Salaries Expense  520 6,000
      Cash 110 6,000
            To record the salary of the secretary

18 Account Payable  220 17,500

      Cash 110 17,500
To record the payment for the items purchased 

25 Cash 110 12,000

Account Receivable 120 12,000
      To record the service income from United Bank

28 E. Mortiz, Drawing 320 8,000

   Cash 110 8,000
          To record Mortiz withdrawal for personal use

30 Salaries Expense 520 6,000

    Cash 110 6,000
          To record salary of secretary

31 Notes payable 210 1,000

Interest expense 530 60
         Cash 110 1,060
            To record payment of interest and installment 

31  Utility Expense 540 2,500

  Cash 110 2,500
    To record utility bill
317,110 317,110
 E. Mortiz law Firm
Posting
March 1-31, 2022

CASH ACCO
DATE EXPLANATION REF
2022
Mar-01 Initial Investment GJ1
Mar-02 Balance of purchaced equipment GJ1
Mar-06 Service income from R. Moore GJ1
Mar-10 Paid insurance GJ1
Mar-15 Salary of the Secretary GJ1
Mar-18 payment of the items purchased GJ1
Mar-25 Service income from United Bank GJ1
Mar-28 Mortiz withdrawal for personal use GJ1
Mar-30 Salary of the Secretary GJ1
Mar-31 Payment of ineterest and installment GJ1
Mar-31 Utility bill GJ1

ACCOUNTS RECEIVABLE - UNITED BANK ACCO

DATE EXPLANATION PR
Mar-15 to receive income GJ1
Mar-25 received service income GJ1

OFFICE SUPPLIES ACCO

DATE EXPLANATION PR
Mar-03 bought supplies GJ1
Dec-31 to adjust the amount of office supply

OFFICE EQUIPMENT ACCO

DATE EXPLANATION PR
Mar-02 bought equipment GJ1
Mar-03 bought equipment GJ1

LAW LIBRARY ACCO

DATE EXPLANATION PR
Mar-01 Initial investment GJ1

NOTES PAYABLE ACCO

DATE EXPLANATION PR
Mar-02 Balance of bought equipment w/ promissory note GJ1
 Mar-31 payment of interest and installment GJ1
Dec-31 to record the 2% interest AJE

ACCOUNTS PAYABLE ACCO

DATE EXPLANATION PR
Mar-03 bought supplies GJ1
Mar-18 payment for the items purchased GJ1

E. MORTIZ CAPITAL ACC

DATE EXPLANATION PR
Mar-01 E.Mortiz Capital GJ1

E. MORTIZ DRAWING ACCOU

DATE EXPLANATION PR
Mar-28 Withdrew for personal use GJ1

SERVICE INCOME ACCOUNT

DATE EXPLANATION PR
Mar-06 Service income from R. Moore GJ1
Mar-15 Service income from United Bank GJ1
Dec-31 To record unearned income AJE

INSURANCE EXPENSE ACCO

DATE EXPLANATION PR
Mar-10 Paid insurance GJ1

SALARIES EXPENSE ACCOU

DATE EXPLANATION PR
Mar-15 Salary of the secretary GJ1
Mar-30 Salary of the secretary GJ1
Dec-31 To adjust accrued salaries AJE

INTEREST EXPENSE ACCO

DATE EXPLANATION PR
Mar-31 payment of interest GJ1

UTILITY EXPENSE ACCO

DATE EXPLANATION PR
 Mar-31 Utility bill GJ1

ADJUSTED ENTRY
OFFICE SUPPLIES EXPENSE ACCO
DATE EXPLANATION PR
Dec-31 to adjust the amount of office supply AJE

DEPPRECIATION - EQUIPMENT ACCO

DATE EXPLANATION PR
Dec-31 to record the value of equipment per annum AJE

ACCUMULATED DEPPRECIATION - EQUIPMENT ACCOU

DATE EXPLANATION PR
Dec-31 to record the value of equipment per annum AJE

DEPPRECIATION - LAW LIBRARY ACCO

DATE EXPLANATION PR
Dec-31 To record the value of the Law Library per year AJE

ACCUMULATED DEPRECIATION - LAW LIBRARY ACCO

DATE EXPLANATION PR
Dec-31 To record the value of the Law Library per year AJE

ACCRUED - NOTES PAYABLE ACCO

DATE EXPLANATION PR
Dec-31 to record the 2% interest AJE

UNEARNED INCOME ACCOU

DATE EXPLANATION PR
Dec-31 To record unearned income AJE

ACCRUED SALARIES EXPENSE ACCO

DATE EXPLANATION PR
Dec-31 To adjust accrued salaries AJE
 E. Mortiz law Firm
TRIAL BALANCE
March 31, 2022

ACCOUNT NO. 110 ACCOUNT TITLES

DEBIT CREDIT BALANCE Cash
Accounts Receivable
30,000.00 30,000.00 Office Supplies
12,000.00 18,000.00 Office Equipment
12,000.00 30,000.00 Law Library 
550.00 29,450.00 Notes Payable
6,000.00 23,450.00 Accounts Payable
17,500.00 5,950.00 E. Mortiz, Capital
12,000.00 17,950.00 E. Mortiz Drawing
8,000.00 9,950.00 Service Income
6,000.00 3,950.00 Insurance Expense
1,060.00 2,890.00 Salaries Expense
2,500.00 390.00 Interest Expense
Utility Expense
TOTALS
ACCOUNT NO. 120
DEBIT CREDIT BALANCE
12,000.00
12,000.00 -

ACCOUNT NO.130 E. Mortiz law Firm

DEBIT CREDIT BALANCE Income Statement
2,500.00 2,500.00 For the month ended March 3
1,500.00 1,000.00
Service Income
ACCOUNT NO. 140 Less operating expense:
DEBIT CREDIT BALANCE Insurance Expense
42,000.00 Salaries exoense
15,000.00 57,000.00 Interest expense
Utility Expense
NET INCOME
ACCOUNT NO. 150
DEBIT CREDIT BALANCE
150,000.00 150,000.00
E. Mortiz law Firm
Statement of changes in Owner
ACCOUNT NO. 210 For the month ended March 3
DEBIT CREDIT BALANCE
30,000.00 30,000.00 E. Mortiz, Capital
 1,000.00 29,000.00 Add: Net Income
600.00 29,600.00 Total
Less:
ACCOUNT NO. 220 E. Mortiz Drawing
DEBIT CREDIT BALANCE E. Mortiz Capital,end
17,500.00 17,500.00
17,500.00 -

ACCOUNT NO. 310

DEBIT CREDIT BALANCE
180,000.00 180,000.00

ACCOUNT NO. 320

DEBIT CREDIT BALANCE
8,000.00 8,000.00

ACCOUNT NO. 410

DEBIT CREDIT BALANCE
12,000.00 12,000.00
12,000.00 24,000.00
4,000.00 ₱ 20,000.00

ACCOUNT NO. 510

DEBIT CREDIT BALANCE
550.00 ₱ 550.00

ACCOUNT NO. 520

DEBIT CREDIT BALANCE
6,000.00 6,000.00
6,000.00 12,000.00
550.00 ₱ 11,450.00

ACCOUNT NO.530
DEBIT CREDIT BALANCE
60.00 60.00

ACCOUNT NO. 540

DEBIT CREDIT BALANCE
 2,500.00 2,500.00

ACCOUNT NO. 550

DEBIT CREDIT BALANCE
1,500.00 ₱ 1,500.00

ACCOUNT NO. 560

DEBIT CREDIT BALANCE
4,750.00 ₱ 4,750.00

ACCOUNT NO. 570

DEBIT CREDIT BALANCE
4,750.00 ₱ 4,750.00

ACCOUNT NO. 580

DEBIT CREDIT BALANCE
10,000.00 ₱ 10,000.00

ACCOUNT NO. 590

DEBIT CREDIT BALANCE
10,000.00 ₱ 10,000.00

ACCOUNT NO. 600

DEBIT CREDIT BALANCE
600.00 ₱ 600

ACCOUNT NO. 610

DEBIT CREDIT BALANCE
4,000.00 ₱ 4,000

ACCOUNT NO. 620

DEBIT CREDIT BALANCE
550.00 ₱ 550
 E. Mortiz law Firm
TRIAL BALANCE
March 31, 2022

DEBIT CREDIT
390

2,500
57,000
150,000
29,000
29000
180,000
8,000
24,000 180000
550
12,000
60 24000
2,500
₱ 233,000.00 ₱ 233,000.00

E. Mortiz law Firm

Income Statement
For the month ended March 31, 2022

24000

550
12,000
60
2,500 15,110
₱ 8,890.00

E. Mortiz law Firm

Statement of changes in Owners' Equity
For the month ended March 31, 2022

₱ 180,000
8,890.00
188,890

(8,000)
180,890
 E. Mortiz law Firm
Statement of Finacial Position
For the month ended March 31, 2022

ASSETS: LIABILITIES:
Current Assets Notes Payable 29000
Cash 390
Office Supplies 2,500 OWNERS' EQUITY
Total 2,890.00 E. Mortiz, Capital 180,890

Non- current Assets

Office Equipment 57,000
Law Library 150,000
Total 207,000
TOTAL ASSETS ₱ 209,890.00 TOTAL LIABILITIES AND OWNERS'EQUITY 209,890

STATEMENT OF CASH FLOWS

For the month ended March 31, 2022

Cash flows for the operating acivities:

Cash received from service income 24,000
Cash paid for expenses 15,110
Net cash provided by operating activities 8,890

Cash frows from investing activities:

Acquisition equipment 57,000
Acquisition of supplies 2,500
Net cash provided by investing activities 59,500

Cash flows from financing activities:

Cash Investment by E. Mortiz 180,000
Withdrawal by E. Mortiz 8,000
Net Cash provided by financing activities 172,000

NET INCOME IN CASH ₱ 121,390

 E. Mortiz law Firm E. Mortiz law Firm
Income Statement Statement of changes in Owners
For the month ended March 31, 2022 For the month ended March 31

Service Income 24,000 E. Mortiz Capital,end

Less operating expense: Add: Net Income
Insurance Expense 550 Total
Salaries exoense 12,000 Less:
Interest expense 60 E. Mortiz Drawing
Utility Expense 2,500 15,110 E. Mortiz Capital,end
NET INCOME ₱ 8,890.00

E. Mortiz law Firm

Statement of Finacial Position
For the month ended March 31, 2022

ASSETS: LIABILITIES:
Current Assets Notes Payable 29,000
Cash 390
Office Supplies 2,500 OWNERS' EQUITY
Total 2,890.00 E. Mortiz, Capital 180,890

Non- current Assets

Office Equipment 57,000
Law Library 150,000
Total 207,000
TOTAL LIABILITIES AND
TOTAL ASSETS ₱ 209,890 OWNERS'EQUITY ₱ 209,890

STATEMENT OF CASH FLOWS CASH

For the month ended March 31, 2022 DATE
2022
Cash Inflows Mar-01
income from customers 24,000 Mar-02
Total cash inflaws 24,000 Mar-06
Mar-10
Cash Outflows: Mar-15
Paid insurance 550 Mar-18
Salary of the secretary 12,000 Mar-25
Paid office supply 17,500 Mar-28
Payment of interest and installments 1,060 Mar-30
Utility bill 2,500 Mar-31
Total cash outflows (33,610) Mar-31
Net Cash for Operating Activities - 9,610

Investing Activities
balance of purchased equipment 12,000
Net Cash for Investing Activities - 12,000

Financing Activities
Initial investment 30,000
Mortiz withdrawal for personal use 8,000
Net Cash for Financing Activities 22,000

Cash End Balance ₱ 390

 E. Mortiz law Firm
atement of changes in Owners' Equity
For the month ended March 31, 2022

₱ 180,000
8,890
188,890

(8,000)
₱ 180,890.00

ACCOUNT NO. 110

EXPLANATION REF DEBIT CREDIT BALANCE

Initial Investment GJ1 30,000 30,000

Balance of purchaced equipment GJ1 12,000 18,000
Service income from R. Moore GJ1 12,000 30,000
Paid insurance GJ1 550 29,450
Salary of the Secretary GJ1 6,000 23,450
payment of the items purchased GJ1 17,500 5,950
Service income from United Bank GJ1 12,000 17,950
Mortiz withdrawal for personal use GJ1 8,000 9,950
Salary of the Secretary GJ1 6,000 3,950
Payment of ineterest and installment GJ1 1,060 2,890
Utility bill GJ1 2,500 ₱ 390
 E. Mortiz Law Firm
December 31, 2021

Adjustments:
On December 31, the end of the accounting period, the following data were taken
1.       An actual count of office supplies showed a balance of P1000.
2.       Office Equipment are depreciated at 10% per annum.
3.       Law library is estimated to have a useful life of 15 years.
4.       A 2% interest has accrued on notes payable.
5.       Of the income received, 4,000 is applicable to the next accounting period
6.       Accrued Salaries Expense of 550

Adjusting Journal Enrty

Date Account Title And Description PR Debit
2021
Dec-31 Office Supplies Expense 550 1,500.00
Office Supply
to adjust the amount of office supply

Dec-31 Depreciation - Equipment 560 5,700.00

Accumulated Depreciation - Equipment 570
to record the value of equipment per annum

Dec-31 Depreciation - Law library 580 8,333.33

Accumulated Depreciation - Law Library 590
To record the value of the Law Library per year

Dec-31 Uccrued - Notes Payable 600 580.00

Notes Payable
to record the 2% interest

Dec-31 Prepaid Service Income 410 4,000.00

Service Income 610
To record unearned income

Dec-31 Accrued Salaries Expense 620 550.00

Salaries Expense 520
To adjust accrued salaries
TOTALS ₱ 20,663.33
 E. Mo
W
For the year-e

Unadjusted Trial Balance

Account Titles Debit Credit
Cash 390.00
Accounts Receivable
Office Supplies 2,500.00
Office Equipment 57,000.00
Law Library  150,000.00
Notes Payable 29,000.00
Accounts Payable
Credit E. Mortiz, Capital 180,000.00
E. Mortiz Drawing 8,000.00
Service Income 24,000.00
1,500.00 Insurance Expense 550.00
Salaries Expense 12,000.00
Interest Expense 60.00
Utility Expense 2,500.00
5,700.00 TOTALS 233,000.00 233,000.00

Office Supplies Expense

Depreciation- Equipment
8,333.33 Accumulated Depreciation - Equipment
Depreciation- Law Library
Accumulated Depreciation- Law Library
Accrued - Notes Payable
580.00 Prepaid Service Income
Accrued Salaries Expense
Net Loss

4,000.00 TOTALS

E. MORTIZ LAW FIRM

550.00 Income Statement
December 31, 2021
₱ 20,663.33
Service Income 20,000.00
prepaid service income 4,000.00
Less: Expenses
Insurance Expense 550.00
Salaries Expense 11,450.00
Interest Expense 60.00
Utility Expense 2,500.00
Office Supplies Expense 1,500.00
Depreciation- Equipment 5,700.00
Depreciation- Law Library 8,333.33
Accrued Salaries Expense 550.00
Accrued - Notes Payable 580.00
Total Expenses: 31,223.33
Net Profit - 7,223.33
 E. Mortiz Law Firm
Worksheet
For the year-end December 31, 2021

Adjustments Adjusted Trial Balance Income Statement Balance Sheet

Debit Credit Debit Credit Debit Credit Debit
390.00 390.00

1,500.00 1,000.00 1,000.00

57,000.00 57,000.00
150,000.00 150,000.00
580.00 29,580.00

180,000.00
8,000.00 8,000.00
4,000.00 20,000.00 20,000.00
550.00 550.00
550.00 11,450.00 11,450.00
60.00 60.00
2,500.00 2,500.00

1,500.00 1,500.00 1,500.00

5,700.00 5,700.00 5,700.00
5,700.00 5,700.00
8,333.33 8,333.33 8,333.33
8,333.33 8,333.33
580.00 580.00 580.00
4,000.00 4,000.00 4,000.00
550.00 550.00 550.00
₱ 20,663.33 ₱ 20,663.33 ₱ 247,613.33 ₱ 247,613.33 ₱ 31,223.33 ₱ 24,000.00 ₱ 216,390.00
₱ 7,223.33 ₱ 7,223.33
₱ 31,223.33 ₱ 31,223.33 ₱ 223,613.33

E. MORTIZ LAW FIRM LIABILITIES

Balance Sheet
December 31, 2021 Notes Payable
Total Liabilities
Assets
Current Assets OWNERS' EQUITY
Cash 390.00
Office Supplies 1,000.00 E. MORTIZ, CAPITAL
Total Current Assets 1,390.00 Add: Net Income
 Less : Drawing
Non-current Assets Capital end balance
Office Equipment 57,000.00 Total Liabilities & owners'equity
Accumulated Depreciation - Equipment 5,700.00
Law library 150,000.00
Accumulated Depreciation- Law Library 8,333.33
Total Non-current Assets 192,966.67
Total Assets ₱ 194,356.67
Balance Sheet
Credit

29,580.00

180,000.00

5,700.00

8,333.33

₱ 223,613.33

₱ 223,613.33

29,580.00
₱ 29,580.00

180,000.00
(7,223.33)
 8,000.00
164,776.67
wners'equity ₱ 194,356.67