NAKATIHAYA MASSAGE PARLOR Unused Supplies 500

TRIAL BALANCE To record adjusted supplies record

DECEMBER 31, 2020
Accounts Debit Credit 3. Furniture & Fixtures 27,000
27,000 / 10 = 2,700
Cash 50,575.00
Accounts Receivable 18,500.00
Depreciation Expense 2,700
Allowance for Bad Debts 1,200.00
Accumulated Depreciation Expense 2,700
Land 103,505.00
To record depreciation
Unused Supplies 750.00
Furniture & Fixtures 27,000.00
Accumulated Depreciation-Furniture 2,700.00
4. June 1
Equipment 15,000.00 Equipment 10,000
Accumulated Depreciation- Equipment 1,900.00 10,000 / 5 =2,000
Notes Payable 20,000.00 2,000 / 12 months * 7 months = 1,167
Accounts Payable 5,770.00
Withholding Taxes Payable 875.00 Depreciation Expense 1,167
SS Premiums Payable 525.00 Accumulated Depreciation Equipment 1,167
Philheath Premiums Payable 350.00 To record depreciation
Cases, Capital 117,010.00
Cases, Drawings 1,000.00
5. 6% notes payable for 60 days
Massage Revenue 120,500.00
Notes Payable 20,000 * 6% * 21 days / 360 = 70
Allowances 2,500.00
Discount 1,500.00
Interest Expense 70
Advertising Expense 3,000.00
Interest Payable 70
Food and Beverage Expense 2,900.00
Rent Expense 20,000.00
To record accrued interest
Salaries Expense 17,500.00
Taxes Expense 2,000.00
Utilities Expense 6,600.00 6. Salaries Expense 2,500
Rent Income 1,500.00 Salaries Payable 2,500
272,330.00 272,330.00 To record accrued salaries

1. Allowance for bad debts should be increase to 10% of Accounts 7. December 1

receivables Advertising Expense 3,000
2. Supplies on hand is P250 Cash 3,000
3. Furniture and fixture has a useful life of 10 years Payment of advertising
4. P10,000 of the equipment were acquired June 1, 2016 and
P5000 of the equipment were acquired July 1, 2014. Useful life December 31
is 5 years. Advertising Expense 3,000 / 6 = 500 per advertising Sunday
5. 6% Notes payable is for 60 days and was dated December 10, Recorded Advertising = 3,000 for 6 Sundays
2016. Correct Advertising = 2,500 for 5 Sundays only
6. Unpaid salaries amounted to P2,500. Adjustment for Advertising 500 (1 Sunday remaining)
7. Advertising expense of P3,000 was paid on December 1, 2016 Prepaid
to Philippine Star for 6 Sundays. There were 5 Sundays in
December 2016. Prepaid Advertising 500
8. A corner of our store is being rented out to Mr. S. Mr. S gave an Advertising Expense 500
advance rent for 3 months on December 1, 2016. To adjust advertising expense
9. The utilities expense amounting to P4,400 for December was
erroneously charged to rent expense. 8. December 1
Required: Cash 1,500
1. Make the necessary adjusting entries Rent Income 1,500
2. Make an adjusted trial balance.
3. Make the closing entries Recorded Rent Income 1,500 for 3 months
Correct Rent Income 500 (12-1 to 31 only)
Adjustment Unearned Rent 1,000
1. Accounts Receivable = 18,500
18,500 * 10% = 1,850 -> Allowance Rent Income 1,000
Existing Allowance 1,200 Unearned Rent Income 1,000
Adjustment 650 To record

Bad Debt Expense 650 9. In Error: Rent Expense 4,400

Allowance for Bad Debt 650 Cash 4,400
To record allowance Correct Entry : Utilities Expense 4,400
Cash 4,400
2. Recorded Supplies 750
Correct Supplies 250 Correcting Entry
Adjustment 500 Utilities Expense 4,400
Rent Expense 4,400
Supplies Expense 500
To correct rent and utility expense