Business owned by Mr. Kelly Power, for the month of December 2020.

1. Supplies used and paid during the month:

a. Directly used in service rendered to customers, P15,000.
b. Office supplies used, P5,000.

2. Salaries paid during the month:

a. Salaries of workers directly involved in rendering service, P175,000.
b.General Administrative and office salaries , P125,000.

3. Rent Expense incurred and paid during the month, P7,000.

4. Services rendered to customers on cash, P200,000. and on account P300,000

5. Interest expense incurred and paid during the month, P1,000.

6. Sale of a fully depreciated furniture, P5,000.

The Books of the Business as of December 1, 2020 reveals the following Information

Cash 400,000 Account Payable 36,000

Account Recievables 40,000 Notes Payable 100,000
Allowance for doubtful accounts ( 4,000.)
Furniture 20,000 Kelly Power, Capital 300,000
Accum. Depreciation-Furniture (20,000.)
Total Assets 436,000 Total Liabilities and Capital 436,000

Required :
1. Make a Journal Entry
2. T Accounts Entry
3. Trial Balance
 T- Accounts method is used to accumulate the ending ba
Solution :
Cash Accounts
Dec General Journal Debit Credit Debit
2020 Description Debit Credit b 400,000 1 20,000 b
4 200,000 2 300,000 4
1 Supply Expense 20,000 6 5,000 3 7,000
Cash 20,000 5 1,000
To record supplies used 605,000 328,000
277,000
2 Salary Expense 300,000
Cash 300,000
To record salaries Accum. Dep'n Furniture Notes
Debit Credit Debit
3 Rent Expense 7,000 6 20,000 b 20,000
Cash 7,000
To record rent expense

4 Cash 200,000 20,000 20,000

Accounts Recievable 300,000 -
Service Income 500,000
To record service revenue Supply Expense Salary
Debit Credit Debit
5 Interest Expense 1,000 1 20,000 2
Cash 1,000
To record interest incurred

6 Cash 5,000 20,000

Accumulated Dep'n - Furniture 20,000 20,000
Furniture 20,000
Gain on Sale of Furniture 5,000 Interest Expense Gain on Sa
Debit Credit Debit
5 1,000

1,000
1,000
ending balances of the accounts, as follows:

Accounts Recievables Allowance for doubtful Accounts Furniture

Debit Credit Debit Credit Debit Credit
40,000 b 4,000 b 20,000 6 20,000
300,000

340,000 - 4,000 20,000 20,000

340,000 4,000 -

Notes Payable Kelly Power, Capital Accounts Payable

Debit Credit Debit Credit Debit Credit
b 100,000 b 300,000 b 36,000

- 100,000 - 300,000 - 36,000

100,000 300,000 36,000

Salary Expense Service income Rent Expense

Debit Credit Debit Credit Debit Credit
300,000 4 500,000 3 7,000

300,000 - 500,000 7,000

300,000 500,000 7,000

ain on Sale of Furniture

Debit Credit
6 5,000

- 5,000
5,000
 Mr. Kelly Power
Trial Balance
As of December 31, 2020

Particulars Debit (P) Credit (P)

Cash 277,000
Account Recievable 340,000
Gain on Sale of Furniture 5,000
Furniture
Supply Expense 20,000
Salary Expense 300,000
Rent Expense 7,000
Interest Expense 1,000
Allowance for doubtful Accounts 4,000
Accum. Dep'n Furniture
Service Income 500,000
Notes Payable 100,000
Account Payable 36,000
Kelly Power Capital 300,000

Total ₱945,000 ₱945,000

Using a Sample problem , Abad Reality

Transaction

1. Mr. Abad opened a real estate brokers office by investing P50,000, cash
2. Paid the office rent for three months in advance , P 4,500.
3. Purchased miscellaneous office supplies from Goodwill Book Store on credit , P 1,500.
4. Purchased Tables and chairs from Nicfur Company worth P18,000 terms n/60.
5. Recived cash P6,000 as commission from the sale of a property.
6. Recived a statement of account from Rex Printers for advertising materials used, P 2,500.
7. Paid the Salary of office clerks P3,800.
8. Sent a bill to Home Developers for services rendered, P21,000
9. Received a check from Home developers P11,000 as partial payment of their account.
10. Home develpers issued a 30 - day note in full settlement of their account balance of P10,000 .
11. Paid the telephone bill, P850
12. Issued a 120 - day, 20% promissory note to Allied Banking Corporation for funds Borrowed, P25,000.
13. Mr. Abad, The owner, withdrew cash from the business for personnal use, P5,000
14. Issued a 30-day, 20% note to goodwill Book Store in full settlement of our account with them , P1,500.
15. Mr. Abad made an additional investment in the business P15,000 cash.

Required :
1. Make a Journal Entry
2. T Accounts Entry
3. Trial Balance
 Solution :

Dec General Journal

2020 Description Debit

1 Cash 50,000
Mr. Abad Capital
To record Mr. Abad Capital

2 Rent Expense 4,500

Cash
To record Rent Expense

3 Supply Expense 1,500

Accounts Payable
ance of P10,000 . To record supply expense

nds Borrowed, P25,000. 4 Office Furniture 18,000

Accunts Payable
count with them , P1,500. To record acquisition of office furniture

5 Cash 6,000
Commision income
To record commission income

6 Advertisement Expense 2,500

Accounts Payable
To record Ads expense
7 Salary Expense 3,800
Cash
To record Salary Expense
8 Accounts Recievables 21,000
Commision income
To record commission income
9 Cash 11,000
Accounts Recievables
To record Partial Payment
10 Notes Recievables 10,000
Accounts Recievables
To record Full settlement Payment
11 Telephone Expense 850
Cash
 To record Telephone Expense
12 Cash 25,000
Notes Payables
To record Notes Payable
13 Abad Drawing 5,000
Cash
To record Telephone Expense
14 Accounts Payables 1,500
Notes Payables
To record full settlement of accounts
15 Cash 15,000
Mr. Abad, additional Capital
To record Mr. Abad additional Capital
 T- Accounts method is used to accumulate the ending balances of the accounts, as foll
ournal
Credit Cash Rent Expense
Debit Credit Debit Credit
1 50,000 2 4,500 2 4,500
50,000 5 6,000 7 3,800
bad Capital 9 11,000 11 850
12 25,000 13 5,000
15 15,000
4,500 107,000 14,150 4,500
t Expense 92,850 4,500

1,500 Abad, Capital Office Furniture

y expense Debit Credit Debit
1 50,000 4 18,000
15 15,000
18,000
of office furniture
- 65,000 18,000
65,000 18,000
6,000
ssion income Salary Expense Accounts Recievables
Debit Credit Debit
7 3,800 8 21,000 9
2,500 10
expense

3,800 3,800 21,000

y Expense 3,800 -

21,000 Notes Payable Abad, Drawing

ssion income Debit Credit Debit
12 25,000 13 5,000
11,000 14 1,500
al Payment

10,000 - 26,500 5,000

ment Payment 26,500 5,000

850
 one Expense

25,000
s Payable

5,000
one Expense

1,500
ment of accounts

15,000
dditional Capital
g balances of the accounts, as follows:

Rent Expense Supply Expense Accounts Payable

Credit Debit Credit Debit Credit
3 1,500 14 1,500 3 1,500
4 18,000
6 2,500

1,500 1,500 22,000

1,500 20,500

107000
ffice Furniture Commission, Income Advertisement Expense
Credit Debit Credit Debit Credit
5 6,000 6 2,500
8 21,000

- 27,000 2,500
27,000 2,500

unts Recievables Notes Recievables Telephone Expense

Credit Debit Credit Debit Credit
11,000 10 10,000 11 850
10,000

21,000 10,000 850 -

10,000 850

bad, Drawing
Credit
 Mr. Abad
Trial Balance
As of December 31, 2020

Particular Debit Credit

Cash 92,850
Office furniture 18,000
Notes Recievable 10,000
Rent Expense 4,500
Supply Expense 1,500
Salary Expense 3,800

Telephone Expense 850

Advertisement Expense 2,500
Commission Income 27,000
Accounts Payable 20,500
Notes Payable 26,500
Abad, Capital 65,000
Abad, Drawing 5,000

₱139,000.00 ₱139,000.00