Name Assigned Task Wk #

1 ALICANTE, YSHA MAXINE RETONEL OPENING PRAYER 2

2 AMITA, ELYSHIA EIREEN ZSANEL MANIMTIM ICE BREAKER
3 ASIS, FRANCHESCA JANE APITAN TIME KEEPER
4 AYUSTE, ANGELITO PANGAN OPENING PRAYER 3
5 BALLARAN, FRITZ KENNETH DIONG ICE BREAKER
6 BERTUMEN, KIRBY CADELIÑA TIME KEEPER
7 BOBADILLA, MICAH PAULINNE VARGAS OPENING PRAYER 4
8 BOOL, KALIAH ANGEL SANTILLANA ICE BREAKER
9 CASIBU, JARHA KEZIAH ANCIRO TIME KEEPER
10 CHAN, LYIANNE LALAS OPENING PRAYER 5
11 CLACITO, ALEXANDRA MADISSON TURLA ICE BREAKER
12 DEL ROSARIO, JETRO RIEGO DE DIOS TIME KEEPER
13 DESCALLAR, AUDREY CELESTINE DELA PEÑA OPENING PRAYER 6
14 DIPANTAR, HARRIS LUMPINGAN ICE BREAKER
15 DUNGCA, LANDER AMIEL ROBLES TIME KEEPER
16 EROLAN, MA. MIKAELLA MABULAC OPENING PRAYER 7
17 FELLIZAR, AHRON CEDRIC DE GUZMAN ICE BREAKER
18 GAGARRA, DULCE BEA ANDREA HERMODO TIME KEEPER
19 GONJORAN, FERDINAND SEDOL OPENING PRAYER 8
20 GONZAGA, JOSHRIELLE AREVALO ICE BREAKER
21 HECHANOVA, LADY YSABEL VELASCO TIME KEEPER
22 ISODA, NAOMI YUKI MASENDO OPENING PRAYER 13
23 LAPIG, ELAIZA JUDIELE DION ICO ICE BREAKER
24 LOMADILLA, SOPHIA PEARL RAPADA TIME KEEPER
25 MACUSI, SHERAIN MORIE JUEVESANO OPENING PRAYER 14
26 MALLARI, MARC NICO SULIT ICE BREAKER
27 NALUZ, SEAN KENAN MACARIO TIME KEEPER
28 ODSINADA , JAN YDELSON BUCE OPENING PRAYER 15
29 OSIAL, JENNAH MAYE MALUTO ICE BREAKER
30 PAGUIPO, MARK DAVEN LUNA TIME KEEPER
31 PALMA, KAREN BUHAT OPENING PRAYER 16
32 PELAYO, ERICK DANIEL MARQUEZ ICE BREAKER
33 PEREZ, DENISE KATRIEL BOLIMA TIME KEEPER
34 SUBARAN, SEAN WARREN MACABASCO OPENING PRAYER 17
35 TAN, ALEYANA LINA ICE BREAKER
36 TIMPAC, HAJAR APUES TIME KEEPER
37 UMALI, USHA IRA JENE ENGUANCHO OPENING PRAYER 18
38 VILLAFLORES, ALYSSA NICOLE ZAPATA ICE BREAKER
39 VILLANUEVA, JOVI MAE RAZON TIME KEEPER
40 ZAMORA, BEATRIZ KAYE MENDOZA OPENING PRAYER
 COMPLETING THE ACCOUNTING CYCLE
8. Closing Entries
What? Journal Entries
Where? General Journal
Why? Clear the books of the nominal or temporary accounts
Revenues
Expenses
Balance = 0
Income and Expense Summary
Drawing
● to make it ready for the recording of transactions of the subsequent accounting period

How? Step 1: Close Revenue Accounts

Service Income 160,000
Income and Expense Summary 160,000

Step 2: Close Expenses Accounts

Income and Expense Summary 9,000
Salaries Expense 9,000

Step 3: Close the Income and Expense Summary (Net Income)

Income and Expense Summary 151,000

X, Capital 151,000

Step 4: Close the Drawing Account

X, Capital 5,000
X, Personal 5,000

What if, the resultof operations is a Net Loss

Net Loss: Expenses > Revenues

Income and Expense Summary

Expenses CE2 120,000 CE1 90,000 Revenues
Net Loss 30,000 CE3 30,000 Net Loss -----> Decreases Capital -----
0

Step 3: Close the iNcome and Expense Summary (Net Loss)

X, Capital 30,000
Income and Expense Summary 30,000
 To make the closing entries, easier, refer to the worksheet.

TO CONTINUE WITH CRUZ REPAIR SHOP:

JOURNALIZE AND POST THE ADJUSTING JOURNAL ENTRIES.
COMPUTE FOR THE UPDATED BALANCES OF THE ACCOUNTS.
FROM THE UPDATED BALANCES, JOURNALIZE AND POST THE CLOSING ENTRIES.

9. PREPARING POST-CLOSING TRIAL BALANCE

Trial Balance prepared after closing entries have been journalized and posted
Reference: General Ledger
Dr = Cr after closing entries
Balances of the accounts in the Post-closing trial balance ------> beginning balance of the accounts for the
Contents: Permanent or Real Accounts
Revenues x Assets
Expenses x Contra-Assets (Allow for Bad Debts, Accum Depcn)
Income and Expense x Liabilities
Drawing x Capital

CRUZ REPAIR SHOP

POST-CLOSING TRIAL BALANCE ➤ Reference is the GL after the AJE and CE have been posted
JUNE 30, 2022
AMOUNTS IN PHILIPPINE PESO
Dr Cr
Cash 187,700.00
Accounts Receivable 4,500.00
Allowance for Bad Debts 300.00
Supplies 800.00
Equipment 25,000.00
Accumulated Depreciation 400.00
Accounts Payable 12,500.00
Utilities Payable 400.00
Cruz, Capaital 204,400.00
Total 218,000.00 218,000.00
 Statement of Changes in Equity
Ending Balance of Capital

10. REVERSING ENTRIES

Journal Entries
made at the beginning of the accounting period
selected Adjusting Journal Entries
1. Convenience of recording future transactions
2. Revert back to the original method of recording prepayments (EXPENSE METHOD) or unearned revenu

Adjustment Item Pro-forma Adjusting Journal Entries

1 Depreciation Depreciation Expense xxx
Accumulated Depreciation

2 Bad Debts Bad Debts Expense xxx

Allowance for Bad Debts

3 Accrued Expenses Expense xxx

Payable

Accrued Interest Expense Interest Expense xxx

Interest Payable

4 Accrued Revenues Receivable xxx

Revenue or Income

Accrued Interest Income Interest Receivable xxx

Interest Income

5 Prepaid Expenses
Balance Sheet Method a. Asset Method Expense xxx
Asset or Prepaid Expense

Income Statement Method b. Expense Method Asset or Prepaid Exp xxx

Expense

6 Unearned Revenues
Balance Sheet Method a. Liability Method Unearned Income xxx
Income or Revenue

Income Statement Method b. Revenue Method Income or Revenue xxx

 Unearned Income

Merchandise
7 Inventory, Merchandise Inventor xxx
End Income and Expense Summary
Periodic Inventory System

Reason 1: Convenience of Recording Future Transactions

On November 20, 2022, the company issued a 12%, 60-day, P300,000 note in exchange for an equip

20-Nov Equipment
Notes Payable

31-Dec November 30 days

November 20
Accrued number of days for November 10
Dec 31
Total accrued days as of Dec 31 41

Principal 300,000
x interest rate 12%
x time 41/360
Accrued Interest Expense 4100

Interest Expense
Interest Payable

Dec 31 Closing Entry

Income and Expense Summary
Interest Expense

Jan 1 Interest Payable

Interest Expense

Due date of the Note

Total accrued days as of Dec 31 41
Jan 19
Term of the note 60

Principal 300,000
x interest rate 12%
x time 60/360
 Interest 6000

Jan 19 Notes Payable

Interest Expense
Cash

Proof:
Principal 300,000
x interest rate 12%
x time (19 days) 19/360
Interest 1900

REVERSING ENTRIES ARE OPTIONAL

20-Nov Equipment
Notes Payable

Dec 31 Interest Expense

Interest Payable

Dec 31 Closing Entry

Income and Expense Summary
Interest Expense

Jan 1 No Reversing Entry

Jan 19 Notes Payable

Interest Payable
Interest Expense
Cash

Reason 2: to revert to the orignal method of recording Prepayments (Expense Method) and unearn

On October 1, 2022, the company paid a 12-month insurance premium amounting to P12,000.
The company is using Expense Method.

Oct 1 Insurance Expense

Cash

Dec 31 AJE Prepaid Insurance

Insurance Expense

Dec 31 CE Income and Expense Summary

 Insurance Expense

Jan 1 RE Insurance Expense

Prepaid Insurance

Expense has a balance of P9,000

Prepaid Insurance has zero balance
You were able to revert back to the E

TO CONTINUE WITH CRUZ REPAIR SHOP:

Go back to the AJE made for Cruz Repair Shop on June 30, 2022.
Determine which AJE should be reversed.
Prepare the AJE.
E

ccounting period

Service Income
Jun 5 10,000
10 30,000
17 50,000
23 70,000
CE1 160,000 Balance 160,000
0 Closed

Income and Expense Summary

Expenses CE2 9,000 CE1 160,000 Revenues
Balance: Net
CE3 151,000 Income 151,000
0

Salaries Expense
Jun 15 4,500
30 4,500
Balance 9,000 CE2 9,000
0
s -----> Decreases Capital -----> Dr

X, Capital
CE4 Drawing 5,000 Jun 1 50,000
12-Jun 250,000
CE3 Net Incom 151,000
5,000 451,000
30-Jun 446,000
 X, Personal
Jun 27 5,000 CE4 5,000
Balance 0

alance of the accounts for the next accounting period

Debts, Accum Depcn)

SCIE
 OPTIONAL

METHOD) or unearned revenues (REVENUE)

Journal Entries Reversed? Reversing Entries

xxx NEVER!!!

NO!!!
xxx

convenience of recording future transacti Payaable xxx

YES
xxx Expense

convenience of recording future transacti Interest Payable xxx

YES
xxxx Interest Expense

convenience of recording future transacti Revenje or Income xxx

YES
xxx Receivable

convenience of recording future transacti Interest Income xxx

YES
xxxx Interest Receivable

NO!
xxx

revert bacck to Expense Method of recordiExpense xxx

YES
xxx prepayments Asset / Prepaid Expense

NO!
xxx

revert back to Revenue Method of recordiUnearned Income xxx

YES
 YES
xxx advance payments from customers Income of Revenue

NO!
xxx

note in exchange for an equipment.

300,000
300,000

ave number of days in a month = 30; 12 months in a year

4,100 Interest Expense

4,100 Dec 31 AJE 4,100 Dec 31 CE 4,100
0 Jan 1 RE 4,100
Jan 19 6,000 4,100
4,100 1,900
4,100

4,100
4,100
Interest Payable
Jan 1 RE 4,100 Dec 31 AJE 4,100
0
due date of the note
days
 300,000
6,000
306,000

300,000
300,000 Interest Expense
Dec 31 AJE 4,100 Dec 31 CE 4,100
4,100 0
4,100 Jan 19 1,900
1,900

4,100
4,100

Interest Payable
Jan 19 4,100 Dec 31 AJE 4,100
300,000 0
4,100
1,900
306,000

Expense Method) and unearned revenues (Revenue Method)

m amounting to P12,000.
Oct 1, 2022 -----------------------------------------------------------------------------------
used up, Expense Unused portion/Asset, Prepaid Expense
12,000 3 months 3,000 9 months 9,000
12,000

9,000 Dec 31, 2022 (cut-off period: FS)

9,000

3,000 Insurance Expense

 3,000 Oct 1 12,000 Dec 31 AJE 9,000
Balacne 3,000 Dec 31 CE 3,000
9,000 0
9,000 Jan 1 9,000
9,000

Prepaid Insurance
Dec 31 AJE 9,000 Jan 1 RE 9,000
0
e has a balance of P9,000
Insurance has zero balance
re able to revert back to the Expense Method of recording Prepayments
Revenues 160,000

Expenses 9,000
Net Income 151,000

Increasing Capital ------> Credit Capital

Statement of Changes in Equity

X, Capital - Jun 1 50,000
Additional Investment 250,000
Net Income 151,000
Withdrawals (5,000)
X, Capital - Jun 30 446,000
X POST-CLOSING TRIAL BALANCE
ng Entries

xxx

xxx

xxx

xxx

xxx
xxx

abnormal reversing entry

interest expense for year 2023 for this note

-----------------------------------------------> Sep 30, 2023
Prepaid Expense
------> from Expense Method----> Asset Method
(1) Convenience of recording future transactions
On December 5, 2022, the company issued a 60-day, 12%, P300,000 promissory note in exchange for
an equipment.

2022
Dec 5 Equipment 300,000.00
Notes Payable 300,000.00

Dec 31 AJE
Interest Expense 2,600.00
Interest Payable 2,600.00
(300,000 x 12% x 26/360)

Interest Expense Interest Pay

Dec 31 AJE 2,600.00 Dec 31 CE 2,600.00 Jan 1 RE
- Jan 1 RE 2,600.00
Feb 3 6000 Bal 2,600.00 abnormal
3,400.00

300,000 x 12% x 34/360

Dec 31 CE
Income and Expense Summary 2,600.00
Interest Expense 2,600.00

2023
Jan 1 Interest Payable 2,600.00
Interest Expense 2,600.00

Feb 3 Notes Payable 300,000.00

Interest Expense 6,000.00
(300,000 x 12% x 60/360)
Cash 306,000.00

What if no Reversing Entry was made.

Interest Expense Interest Pay

Dec 31 AJE 2,600 Dec 31 CE 2,600.00 Feb 3
-
Feb. 3 3,400
Feb 3 Notes Payable 300,000.00
Interest Payable 2,600.00
Interest Expense 3,400.00
(300,000 x 12% x 34/360)
Cash 306,000.00

AJE Salaries Expense 8,000.00

Salaries Payable 8,000.00

RE Salaries Payable 8,000.00

Salaries Expesne 8,000.00

Payment Salaries Expense 30,000.00

Cash 30,000.00

(2) To go back to the original method of recording prepayments (Expense Method) and unearned revenues (Revenu
On September 1, 2022 the company received P180,000 advance rental payments for 6 moonths from
uses the revenue method in recording advance payments from customers.

Rent Income Unearned Rent

Dec 31 AJE 60,000 Sep 1 180,000.00
Dec 31 CE 120,000.00 120,000.00 from rev method ---> Liab method
-
Jan 1 RE 60,000.00 Jan 1 RE
60,000.00
from liab ----> revenue method

2022
Sep 1 Cash 180,000.00
Rent Income 180,000

Dec 31 AJE
Rent Income 60,000.00
Unearned Rent Income 60,000.00
(2 mos x 180,000/6 mos)
Dec 31 CE
Rent Income 120,000.00
Income and Expense Summary 120,000.00

2023
Jan 1 Unearned Rent Income 60,000.00
Rent Income 60,000
ssory note in exchange for

Interest Payable
2,600.00 Dec 31 AJE 2,600.00
-

,000 x 12% x 34/360

Maturity Date
2022 26
Jan 31
57
Feb 3
60

Interest Payable
2,600 Dec 31 AJE 2,600.00
-
unearned revenues (Revenue Method).
yments for 6 moonths from its lessees. The company

Unearned Rent Income

Dec 31 AJE 60,000.00
---> Liab method

60,000.00
-
enue method
 GENERAL LEDGER

CASH
Date Particulars f Dr Date Particulars f
Jun 2 Investment GJ1 200,000.00 Jun 3 Rent GJ1
7 Collection from customers 7,000.00 18 Suppliers' accounts
22 Collection of accounts GJ2 5,500.00 28 Withdrawal GJ2
30 MERALCO
Assistant's Salary
212,500.00
187,700.00

ACCOUNTS RECEIVABLE
Date Particulars f Dr Date Particulars f
Jun 15 Bartolome GJ1 3,000.00 Jun 22 Bartolome GJ2
Stefano 5,000.00 Stefano
Mateo 2,000.00
10,000.00
4,500.00

ALLOWANCE FOR BAD DEBTS

Date Particulars f Dr Date Particulars f
Jun 30 Adjustment GJ2

SUPPLIES
Date Particulars f Dr Date Particulars f
Jun 10 Purchase GJ1 2,000.00 Jun 12 Returns GJ1
1,500.00 30 Adjustment GJ2
800.00

EQUIPMENT
Date Particulars f Dr Date Particulars f
Jun 4 Acquisition GJ1 25,000.00
 25,000.00

ACCUMULATED DEPRECIATION
Date Particulars f Dr Date Particulars f
Jiun 30 Adjustment GJ2

ACCOUNTS PAYABLE
Date Particulars f Dr Date Particulars f
Jun 12Returned defective supplies GJ1 500.00 Jun 4 Acquisition of Eqpt GJ1
18 Full payment of account 1,500.00 10 Purchase of supplies
Partial payment of account 12,500.00
14,500.00

UTILITIES PAYABLE
Date Particulars f Dr Date Particulars f
Jun 30 Adjustment GJ2

CRUZ, CAPITAL
Date Particulars f Dr Date Particulars f
Jun 2 Investment GJ1
Jun 30 Withdrawal GJ3 3,000.00
30 Closing (Net Income) GJ3

CRUZ, DRAWING
Date Particulars f Dr Date Particulars f
Jun 28 Cash Withdrawal GJ2 3,000.00
3,000.00 Jun 30 Closing GJ3
-
 INCOME AND EXPENSE SUMMARY
Date Particulars f Dr Date Particulars f
Jun 30 Closing GJ3 9600 Jun 30 Closing GJ2
7400

REPAIRS REVENUE
Date Particulars f Dr Date Particulars f
Jun 7 Cash customers GJ1
15 Account customers
Jun 30 Closing GJ2 17,000.00

RENT EXPENSE
Date Particulars f Dr Date Particulars f
Jun 3 Payment GJ1 2,500.00
2,500.00 Jun 30 Closing GJ3
-

SALARIES EXPENSE
Date Particulars f Dr Date Particulars f
Jun 30 Payment GJ2 2,500.00
2,500.00 Jun 30 Closing GJ3
-

SUPPLIES EXPENSE
Date Particulars f Dr Date Particulars f
Jun 30 Adjustment GJ2 700
700 Jun 30 Closing GJ3
0

UTILITIES EXPENSE
Date Particulars f Dr Date Particulars f
Jun 30 MERALCO bill GJ2 2,800.00
2,800.00
Adjustment 400
3,200.00 Jun 30 Closing GJ3
 -

BAD DEBTS EXPENSE

Date Particulars f Dr Date Particulars f
Jun 30 Adjustment GJ2 300
300 Jun 30 Closing GJ3
0

DEPRECIATION EXPENSE
Date Particulars f Dr Date Particulars f
Jun 30 Adjustment GJ2 400
400 Jun 30 Closing GJ3
0
 GENERAL LEDGER

101 CASH
Cr Date Particulars f Dr
2,500.00 Jul 1 Beg Bal 187,700.00
14,000.00
3,000.00
2,800.00
2,500.00
24,800.00

102 Post-Closing Trial Balance

Cr Assets
3,000.00 Contra-Asset
2,500.00 Liabilities
Capital
5,500.00

Permanent Accounts

103
Cr
300
300

104
Cr
500.00
700.00

105
Cr
 106
Cr
400
400

201
Cr
25,000.00
2,000.00

27,000.00
12,500.00

202
Cr
400
400

301
Cr
200,000.00
200,000.00
7,400.00
204,400.00

302
Cr

3,000.00
303
Cr
17,000
7,400
0

401
Cr
7,000.00
10,000.00
17,000.00
-

501
Cr

2,500.00

502
Cr

2,500.00

503
Cr

700

504
Cr

3200
505
Cr

300

506
Cr

400
L LEDGER

101
Date Particulars f Cr