The May 31, 2021 trial balance for Lucena Bacalso Surveyors is presented as follows:

Lucena Bacalso
Unadjusted Trial Balance
31-May-21

Debit Credit
Cash ₱ 210,000
Accounts Receivable 930,000
Prepaid Advertising 360,000
Engineering Supplies 270,000
Survey Equipment 1,890,000
Accumulated Depreciation - Survey Equipment ₱ 640,000
Accounts Payable 190,000
Unearned Survey Revenues 120,000
Notes Payable 500,000
Bacalso, Capital 1,120,000
Bacalso, Withdrawals 700,000
Survey Revenues 6,510,000
Salaries Expense 3,270,000
Rent Expense 960,000
Insurance Expense 250,000
Utilities Expense 160,000
Miscellaneous Expense 80,000
Totals ₱ 9,080,000 ₱ 9,080,000

The following information pertaining to the fiscal year-end adjustments is available:

a. The P360,000 prepaid advertising represents expenditure made on November 1, 2020 for monthly advertising
over the next 18 months.
b. A count of the engineering supplies at May 31, 2021 amounted to P90,000
c. Depreciation on the surveying equipment amounted to P160,000.
d. One-third of the unearned survey revenues has been earned at year-end.
e. At year-end, salaries in the amount of P140,000 have accrued.
f. Interest of P60,000 on the notes payable has accrued at year end.

Required:
1. Prepare the adjusting entries
2. Prepare a worksheet
3. Prepare a statement of financial position (balance sheet)
4. Prepare an income statement
5. Prepare a statement of changes in equity
6. Prepare closing entries
thly advertising
A.
Advertising Expense ₱ 140,000
Prepaid Advertising ₱ 140,000
To record advertising expense. [(P360,000/18 months) x 7 months]

B.
Engineering Supplies Expense ₱ 180,000
Engineering Supplies ₱ 180,000
To record supplies expense. (P270,000 - P90,000)

C.
Depreciation Expense-SE ₱ 160,000
Accumulated Depreciation-SE ₱ 160,000
To record depreciation on survey equipment.

D.
Unearned Survey Revenues ₱ 40,000
Survey Revenues ₱ 40,000
To record earned survey revenues. (P120,000/3)

E.
Salaries Expense ₱ 140,000
Salaries Payable ₱ 140,000
To record accrued salaries

F.
Interest Expense ₱ 60,000
Interest Payable ₱ 60,000
To record accrued interest
 Lucena Bac
Wo
31-

Unadjusted Trial Balance Adjustments

Debit Credit Debit
Cash ₱ 210,000
Accounts Receivable 930,000
Prepaid Advertising 360,000
Engineering Supplies 270,000
Survey Equipment 1,890,000
Accumulated Depreciation - Survey Equipment ₱ 640,000
Accounts Payable 190,000
Unearned Survey Revenues 120,000 ₱ 40,000
Notes Payable 500,000
Bacalso, Capital 1,120,000
Bacalso, Withdrawals 700,000
Survey Revenues 6,510,000
Salaries Expense 3,270,000 140,000
Rent Expense 960,000
Insurance Expense 250,000
Utilities Expense 160,000
Miscellaneous Expense 80,000
Totals ₱ 9,080,000 ₱ 9,080,000
Advertising Expense 140,000
Engineering Supplies Expense 180,000
Depreciation Expense - Survey Equipment 160,000
Salaries Payable
Interest Expense 60,000
Interest Payable
Totals ₱ 720,000
Net Income (Loss)
Totals
 Lucena Bacalso Surveyors
Worksheet
31-May-21

Adjustments Adjusted Trial Balance Income Statement

Credit Debit Credit Debit Credit
₱ 210,000
930,000
₱ 140,000 220,000
180,000 90,000
1,890,000
160,000 ₱ 800,000
190,000
80,000
500,000
1,120,000
700,000
40,000 6,550,000 6,550,000
3,410,000 3,410,000
960,000 960,000
250,000 250,000
160,000 160,000
80,000 80,000

140,000 140,000
180,000 180,000
160,000 160,000
140,000 140,000
60,000 60,000
60,000 60,000
₱ 720,000 ₱ 9,440,000 ₱ 9,440,000 ₱ 5,400,000 ₱ 6,550,000
1,150,000
₱ 6,550,000 ₱ 6,550,000
 Balance Sheet
Debit Credit
₱ 210,000 ###
930,000 ###
220,000 ###
90,000 ###
1,890,000 ###
₱ 800,000
190,000
80,000
500,000
1,120,000
700,000

140,000

60,000
₱ 4,040,000 ₱ 2,890,000
₱ 1,150,000
₱ 4,040,000 ₱ 4,040,000
 Lucena Bacalso Surveyors
Income Statement
for the fiscal year ended May 31, 2021

Survey Revenues ₱ 6,550,000

less: Expenses
Salaries Expense ₱ 3,410,000
Rent Expense 960,000
Insurance Expense 250,000
Utilities Expense 160,000
Miscellaneous Expense 80,000
Advertising Expense 140,000
Engineering Supplies Expense 180,000
Depreciation Expense - Survey Equipment 160,000
Interest Expense 60,000 5,400,000
Net Income ₱ 1,150,000
 Lucena Bacalso Surveyors
Statement of Changes in Owner's Equity
as of May 31, 2021

Bacalso, beginning capital ₱ 1,120,000

Add:
Net Income 1,150,000
Additional Investments
Total capital 2,270,000
Less:
Net Loss
Bacalso, withdrawals 700,000
Bacalso, ending capital ₱ 1,570,000
 Lucena Bacalso Surveyors
Statement of Financial Position
as of May 31, 2021

ASSETS
Current Assets:
Cash ₱ 210,000
Accounts Receivable 930,000
Prepaid Advertising 220,000
Engineering Supplies 90,000
Total Current Assets 1,450,000

Non-current Assets:
Survey Equipment ₱ 1,890,000
less: Accumulated Depreciation - Survey Equipment 800,000
Total Non-current Assets: 1,090,000
Total Assets ₱ 2,540,000

LIABILITIES AND OWNER'S EQUITY

Liabilities
Current Liabilities:
Accounts Payable ₱ 190,000
Unearned Survey Revenues 80,000
Salaries Payable 140,000
Interest Payable 60,000
Total Current Liabilities 470,000

Non-current Liabilities
Notes Payable ₱ 500,000
Total Liabilities 970,000

Bacalso, capital 1,570,000

Total Liabilities and Owner's Equity ₱ 2,540,000
 Lucena Bacalso Surveyors
Statement of Financial Position
as of May 31, 2021

ASSETS
Current Assets:
Cash ₱ 210,000
Accounts Receivable 930,000
Prepaid Advertising 220,000
Engineering Supplies 90,000
Total Current Assets 1,450,000

Non-current Assets:
Survey Equipment ₱ 1,890,000
less: Accumulated Depreciation - Survey Equipment 800,000
Total Non-current Assets: 1,090,000
Total Assets ₱ 2,540,000
Surveyors
cial Position
, 2021

LIABILITIES AND OWNER'S EQUITY

Liabilities
Current Liabilities:
Accounts Payable ₱ 190,000
Unearned Survey Revenues 80,000
Salaries Payable 140,000
Interest Payable 60,000
Total Current Liabilities 470,000

Non-current Liabilities
Notes Payable ₱ 500,000
Total Liabilities 970,000

Owner's Equity
Bacalso, capital 1,570,000
Total Liabilities and Owner's Equity ₱ 2,540,000