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Prelims - Practical
Prelims - Practical
Prelims - Practical
PRACTICAL
During October 2022, Cerdeña Lawn Service, Inc. completed the following transactions:
Oct 3 Cerdeña paid 240,000 representing advance payment of rent for 12 months.
5 Billed customers for services rendered, P30,500
6 Paid for one month’s lease on a pickup truck, P7,500
7 Purchased supplies on credit, P15,400
7 Received cash from customers not previously billed, P10,800
8 Purchased new equipment from Yves Manufacturing Company on account, P45,000.
9 Received a bill for a change oil on the truck, P1,300
10 Returned a portion of the equipment that was purchased on October 8 for credit,
P15,000.
14 Received payments from customers previously billed, P8,200
15 Paid the bill received on October 9
19 Paid for supplies purchased on October 7
20 Purchased equipment on account, P12,000
25 Received payments from customers previously billed, P5,400
25 Purchased gasoline for the truck, P2,500
30 Made a payment to reduce the principal of the Loans Payable, P20,000
31 Withdrew P 10,000 for personal use.
At the end of the month, the bookkeeper of Cerdeña Lawn Service Company noted the following:
a. The company used the expense method when they recorded their rent payment.
b. Company assumes that the equipment would have a value of 5,000 after its life of 24 months.
c. Recorded bill for October 9 transaction was understated by 700.
d. Loans Payable has a beginning balance of 120,000 when October started. Loans yield a 2%
monthly interest based on its full amount.
e. Unused supplies at the end of the month were 10,400.
f. 1% of Accounts Receivable after collections were recorded is deemed uncollectible.
Chart of Accounts: