Assignment:

The trial balance of Imperial Consulting Service at December 31, 2022, the end of its accounting year, is
presented below:

Imperial Consulting Service

Trial Balance
December 31, 2022

Account title Debit Credit

Cash P98,200
Consulting fees receivable 46,800
Prepaid office rent 12,600
Prepaid dues and subscriptions 600
Unused supplies 1,200
Equipment 72,000
Accumulated depreciation-equipment P 20,400
Notes payable 30,000
Unearned consulting fees 11,900
James Cabrera,Capital 9,400
Consulting fees earned 514,360
Salaries expense 277,640
Telephone expense 5,100
Rent expense 44,000
Dues and subscriptions expense 3,120
Supplies expense 3,200
Depreciation expense-equipment 13,200
Miscellaneous expense 8,400
TOTAL P586,060 P 586,060

Data needed for the adjusting entries include:

a. On December 1, the company signed a new rental agreement and paid three month’s rent in
advance at a rate of P4,200 per month. This advance payment was debited to the Prepaid
Office Rent account.
b. Dues and subscriptions expired during December amounted to 100.
c. An estimate of supplies on hand was made at December 31, the estimated cost of the unused
supplies was 900.
d. The useful life of the equipment has been estimated at five years (60 months)from date of
acquisition. No depreciation for equipment has been recorded for December.
e. The notes payable is for 60 days at 8% due to BPI dated December 1,2022.
f. Consulting services valued at P 5,700 were rendered during December to clients who had
made payment in advance
g. It is the custom of the firm to bill clients only when consulting work is completed or, in the
case of prolonged engagements, at monthly intervals. At December 31, engineering services
valued at 22,000 have been rendered to clients but not yet billed. No advance payments
have been received from these clients.
h. Salaries earned by employees but not paid as of December 31 amounted to 3,400.

Required:
1. Prepare the accounting work sheet of Imperial Consulting Service for the year ended
December 31, 2022. Key each adjusting entry by the letter corresponding to the data given.
2. Prepare the company’s Income Statement, Statement of Owner’s Equity and Statement of
Financial Position.