Practice Set #1 (3-56)

Recording Transactions in a Financial Transaction Worksheet

On Dec. 1, 2012, Ludivina Victorino opened a videotape rental store, Cavite Video, by investing P
250,000 cash from her personal savings account. During the month of December, the following
transactions took place:

Dec. 1 Acquired supplies on account, P 67,000.

4 Acquired videotapes costing P 235,000, on account.
5 Paid P 85,000 to creditors.
8 Received P 78,000 cash from ACA Video for rental fees.
11 Billed Video City for video rentals, P 105,000.
16 Paid salaries, P 65,000.
17 Collected P77, 000 from Video City.
23 Victorino withdrew P 47,000 from the business.
24 Paid rent for the month, P 41,500.
30 Paid utilities bill for the month, P 17,500.

Required:

Record the transactions for the month of December 2012 using a financial transaction
worksheet. Use the following accounts: Cash; Accounts Receivable; Supplies; Videotapes;
Account Payable; and Victorino, Capital.
Practice Set #2 (3-59)
Recording Transactions in a Financial Transaction Worksheet

Neil Saletrero started Saletrero Industrial Sprayy Service on April 1, 2012. During April, Saletrero
completed the following transactions:

a. Invested cash in the business, P 60, 000.

b. Bought a service vehicle from Cebu Motors for P 112, 500. Paying, P 22, 500 in cash, with
the remainder due in thirty days.
c. Bought spray equipment on account from San Jose Company, P 18, 000.
d. Paid rent for the month, P 5, 600.
e. Paid cash for insurance on service vehicle for the year, P 5, 760.
f. Received cash for spray services done on a building, P 21, 750.
g. Bought supplies for cash, P 5,370.
h. Billed customers on account for services performed, P 4, 440.
i. Paid cash for utilities, P 960.
j. Received bill for gasoline used by the service vehicle during the month, P 3, 270.
k. Receipts from cash customers, P 16, 420.
l. Saletrero withdrew cash for personal use, P 10, 500.
m. Paid salaries to employees, P 20, 400.

Required:

Record the transactions for the month of April 2012 using a financial transaction worksheet. Use
the following accounts: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Spray
Equipment; Service Vehicle; Accounts Payable; and Saletrero, Capital. If the owner’s equity
account is affected by a transaction, identify it as revenue, expense, investment or withdrawal.
Practice Set #3 (3-65)
Entering Initial Balances and Recording Transactions

Presented below is the balance sheet for the Leopoldo Medina Nursing Home:

Leopoldo Medina Nursing Home

Balance Sheet
Dec. 31, 2012

Assets
Cash P 16, 000
Accounts Receivable 165, 000
Supplies 21, 000
Land 90, 000
Nursing Home 350, 000
Nursing Equipment 160, 000
Total Assets P802, 000

Liabilities and Owner’s Equity

Liabilities
Notes Payable P 350, 000
Accounts Payable 47, 000
Total Liabilities P397, 000

Owner’s Equity
Medina, Capital 405, 000
Total Liabilities and Owner’s Equity P802, 000

During the month of January 2013, the following transactions took place:

Jan. 2 Acquired supplies on account, P 17, 500.

6 Collected P 82, 000 from patients for services provided in 2012.
10 Acquired nursing equipment on account, P 35, 000.
11 Billed patients P 167, 000 for nursing fees.
12 Paid P 31, 000 on accounts payable.
17 Paid nursing salaries, P 24, 000.
20 Paid utilities expense, P 9, 000.
25 Medina withdrew P 10, 000 from the business.
27 Received a bill from the Ryan Morales Ad Company for P 12, 500 for advertising
expense incurred during the month
31 Paid P 15, 000 of the notes payable.

Required:
1. Enter the Dec. 31, 2012 balances in a financial transaction worksheet.
2. Record the transactions for the month January 2013.
Practice Set #4 (4-47)
Developing a Chart of Accounts and Recording Transactions in T-Accounts

Henry Labasan organized Eternal Images, a photography and portrait studio, on Oct. 1, 2012.
The studio completed the transactions during the month:

Oct. 1 Deposited P 350, 000 in a bank account in the name of the business.
3 Paid two month’s rent deposit and one-month advance, P 40, 500.
5 Transferred to the business personal photography equipment valued at
P 129, 000.
7 Ordered additional photography equipment, P 75, 000.
8 Purchased office equipment for cash, P 54, 000.
10 Received and paid for the photography equipment ordered on Oct. 7, P 75, 000.
12 Purchased photography supplies on credit, P 21, 000.
13 Received cash for previously unbilled portraits, P 11, 400.
17 Billed customers for portraits, P 22, 500.
19 Paid fifty percent of the supplies purchased on Oct. 12, P 10, 500.
25 Paid the electricity bill for Oct., P 3, 600.
26 Paid the telephone bill for Oct., P 2, 100.
28 Received payments from the customers billed on Oct. 17, P 7, 500.
29 Paid salaries to personnel, P 12, 500.
30 Received an advance payment from a customer, P 1, 500.
31 Withdrew P 16, 000 from the business for a personal emergency.

Required:

1. Read the transactions and develop a chart of accounts applicable to the business.

2. Record the transactions directly into T-accounts.

3. Determine the balance of each account.

Practice Set #5 (4-53)
Journalizing Transactions

Joanne Java Review School entered into the following transactions during October 2012:

Oct. 1 Java made additional investments of P 50, 000 in the business.

2 Bought liability insurance for one year, p 14, 500.
3 Received a bill for advertising from SouthMin News, p 3, 200.
4 Paid rent for the month, P 8, 900.
7 Received a bill for equipment repair from E. Hipolito, P 2, 880.
10 Received and deposited tuition from students, P 62, 500.
11 Received and paid the telephone bill, P 2, 300.
15 Bought chairs from E. Awayan Furniture Company, P 18, 800, paying P 8, 800 in
cash and the balance on account.
18 Paid accounts to SouthMin News, P 3, 200.
21 Java withdrew P 8, 000 for personal use.
24 Received a bill for gas and oil from Mindanao Oil Company, P 1, 800.
25 Received and deposited tuition from students, P 61, 400.
27 Paid salaries of the office assistants, P 12, 000.
28 Bought a photocopier on account from Dadiangas Office Machines, P 7, 500.
29 Received P 7,000 tuition from a student who had charged the tuition on account
last month.
30 Received and paid the water utilities bill, P 3, 600.
31 Paid flower arrangements for front office, P 620.
31 Java invested personal computer, with a fair market value of P 12, 300, in the
business.

Required:

Prepare the journal entries for the October transactions. Use the following accounts: Cash;
Accounts Receivable; Prepaid Insurance; Equipment; Furniture; Accounts Payable; Java, Capital;
Java; Withdrawals; School Fees; Salaries Expense; Rent Expense; Gas and Oil Expense;
Advertising Expense; Repair Expense; Supplies Expense; Utilities Expense; Telecommunications
Expense and Miscellaneous Expense.
Practice Set #6 (4-58)
Journalizing, Posting, Preparing a Trial Balance and Financial Statements

Teofisto Arenas recently established a business that will operate as Arenas Cleaning Service. The
transactions for February 2012 are presented below.

Feb. 1 Deposited P 62, 000 cash in a bank account in the name of the new company.
3 Acquired cleaning supplies on account, P 21, 400.
5 Acquired cleaning equipment on account, p 15, 600.
6 Acquired an old service vehicle costing P 47, 000 for the business, paying
P 10, 000 cash, and financing the remaining P 37, 000 by issuing a note payable.
7 Paid rent on office space for the month, P 7, 300.
9 Received P 31, 800 cash for cleaning services rendered.
10 Paid for a newspaper advertisement, P 1, 700.
12 Paid for insurance for the next six months by recording prepaid insurance,
P 4, 800.
13 Paid P 9, 000 on account.
14 Paid miscellaneous expenses, P 2, 200.
15 Billed customers P 18, 600 for cleaning services rendered.
16 Paid salaries, P 8, 400.
20 Received P 9, 800 from customers billed on Feb. 15.
22 Paid amount due on the note payable, P 2, 400.
25 Paid telephone expense, P 900.
28 Paid salaries, P 8, 400.
28 Billed customers for cleaning services rendered, P 22, 500.
28 Withdrew P 10, 000 from the business.

Required:

1. Prepare the journal entries for the February transactions.

2. Post the entries to the ledger accounts using account numbers for cross-reference and using
journal page number 1. The following accounts will be needed: Cash (110); Accounts
Receivable (120); Cleaning Supplies (130); Prepaid Insurance (140); Cleaning Equipment
(150); Service Vehicle (160); Notes Payable (210); Accounts Payable (220); Arenas, Capital
(310); Arenas, Withdrawals (320); Cleaning Revenues (410); Salaries Expense (510); Rent
Expense (520); Advertising Expense (530); Telephone Expense (540) and Miscellaneous
Expense (550).
Practice Set #7 (4-59)
Journalizing, Posting, and Preparing a Trial Balance

Claro Ventic operates the Ventic Nursery School. It provides day-care, school bus service and learning
programs to pre-school children. On Jan. 31, 2012, the company’s trial balance is as follows:

Ventic Nursery School

Trial Balance
Jan. 31, 2012

Cash (110) P 187,000

Accounts Receivable(120) 170,000
Equipment (140) 104,000
Service Vehicles (150) 1,740,000
Notes Payable (210) P 1,500,000
Accounts Payable (220) 164,000
Ventic, Capital (310) __________ 537,000
P 2,201,000 P 2,201,000

During the month of February, the company completed the following transactions:

Feb. 2 Paid this month’s rent, P 27, 000.

3 Received fees for this month’s services, P 65, 000.
4 Purchased supplies on account, P 8, 500.
5 Paid for oil change on a service vehicle, P 4, 000.
6 Ordered playground equipment, P 100, 000.
8 Made payments on account, P 17, 000.
9 Collected from costumers on account, P 120, 000.
10 Billed customers who had not yet paid for this month’s services, P 70, 000.
11 Paid for the supplies purchased on February 4.
13 Received and paid for the playground equipment ordered on February 6,
P 100,000.
17 Purchased equipment on account, P 29, 000.
19 Paid this month’s utility bill, P 14, 500.
22 Received cash for one month’s services from customers previously billed
P 50,000.
26 Paid salaries of staff, P 46, 000.
27 Received statement of account for gas and oil used by the service vehicles during the
month, P 32, 500.
28 Made cash withdrawal of P 11, 000.

Required:
1. Prepare the journal entries for the February transactions.
2. Post the entries to the ledger accounts. Be sure to make the appropriate posting references in the
journal and ledger as you post. The following are the other accounts used by the company: Supplies
(130); Ventic, Withdrawals (320); School Revenues (410); Salaries Expense (510); Rent Expense (520);
Gas and Oil Expense (530) and Utilities Expense (540).
3. Prepare a trial balance as at Feb. 28, 2012.
Practice Set #8 (6-32)
Comprehensive Problem

Presented below is the unadjusted trial balance of the Moises Dondoyano Information Systems
Company for the year ended Dec. 31, 2012:

Moises Dondoyano Information Systems Company

Unadjusted Trial Balance
Dec. 31, 2012

Cash P 45,000
Notes Receivable 360,000
Accounts Receivable 156,000
Office Supplies 63,000
Land 300,000
Building 1,590,000
Accumulated Depreciation- Building P 254,000
Equipment 2,150,000
Accumulated Depreciation- Equipment 612,000
Accounts Payable 213,000
Unearned Consulting Revenues 450,000
Dondoyano, Capital, 1/1/2012 2, 655,000
Dondoyano, Withdrawals 600,000
Consulting Revenues 2, 108,000
Salaries Expense 875,000
Repairs Expense 116,000
Miscellaneous Expense 37,000 __________
Totals P 6, 292, 000 P 6, 292,000

Additional Information:

a. Office Supplies on hand as at Dec. 31, 2012 is P 21, 000.

b. One-third of the unearned revenues has been earned as at Dec. 31, 2012.
c. Depreciation for the year amounted to P 38, 000 for the building and P 123, 000 for the
equipment.
d. Salaries in the amount of P 14, 000 have accrued at year- end
e. The notes receivable were accepted from several customers. The notes were issued on
Sept. 1, 2012 and will; be settled together with a 20% interest on May 31, 2013.

Required:

1. Establish a ledger account for each of the account in the unadjusted trial balance.
2. Journalize and post the adjusting entries.
3. Prepare an adjusted trial balance.
4. Prepare an income statement, a statement of changes in equity and a balance sheet.
Problem #9 (7-23)
Comprehensive Problem

Dr. Nick Marasigan, upon completing a residency program at Harvard Medical Center,
establishes a medical practice in San Pablo, Laguna. During October 2012, the first month of
operations, the following transactions occurred:

Oct. 1 Dr. Marasigan transferred P 250, 000 from his personal checking account to a
bank account, Dr. Nick Marasigan, M. D.
1 A medical clinic, P 1, 000, 000 and land, P 250, 000 were acquired by paying
P 50, 000 in cash and issuing a 5-year, 20% note payable (interest is payable every
6 months) for the P 1, 200, 000 balance.
1 Acquired medical equipment costing P 420, 000 and medical supplies amounting
to P 39, 000 by paying P 59, 000 cash and issuing a 24% note payable, maturing in
6 months, for the P 400, 000 balance.
2 Acquired “all-in-one” insurance for a year, P 20, 000.
4 Received cash from patients amounting to P 117, 000.
7 Bought medical supplies on account from San Pablo Supply, P 17, 000.
10 Paid salaries of nurses and office staff, P 73, 000.
12 Received P 90, 000 from the Laguna Experimental Drug Center for research to be
conducted by Dr. Marasigan over the next 3 months.
18 Billed patients P 317, 000 for services rendered.
21 Paid P 23, 000 for repairs to the medical equipment.
23 Paid the telephone bill, P 3, 000.
24 Bought medical equipment on account from Dr. De Leon, P 45, 000.
25 Collected P 113, 000 from patients billed on the 18th.
30 Withdrew P 200, 000 in cash from the medical practice.
30 Paid P 15, 000 dues to the Laguna Medical Association.

Required:

1. Establish the following accounts and account numbers in a ledger

Account No. Account No.

Cash 110 Accounts Payable 230
Accounts Receivable 120 Salaries Payable 240
Medical Supplies 130 Interest Payable 250
Prepaid Insurance 140 Unearned Research Revenues 260
Land 150 Marasigan, Capital 310
Medical Building 160 Marasigan, Withdrawals 320
Accumulated Depreciation- Income Summary 330
Medical Building 165 Medical Revenues 410
Medical Equipment 170 Research Revenues 420
Accumulated Depreciation- Salaries Expense 510
Medical Equipment 175 Insurance Expense 520
24% Notes Payable 210 Repairs Expense 530
20% Notes Payable 220 Supplies Expense 540
Association Dues Expense 550 Interest Expense 590
Telephone Expense 560
Depreciation Expense-Bldg. 570
Depreciation Expense-Equipt. 580
2. Record the transactions for the month of October in journal (page 1) and post the entries to
the ledger. Use balance sheet accounts to record those transactions that will later require
adjustments.

3. Prepare a trial balance on a worksheet to record the following adjustments on the worksheet.
a. Insurance for one month has expired.
b. Medical supplies on hand at month-end amounted to P21,000.
c. Depreciation on the medical building and on the medical equipment is P5,000 and
P9,000, respectively.
d. Unearned research revenues in the amount of P30,000 have been earned.
e. Salaries of P51,000 have accrued.
f. Interest on the 20% and 24% notes are P20,000 and P8,000, respectively.

4. Complete the worksheet and prepare an income statement, statement of changes in equity,
and a balance sheet.

5. Record the adjusting and closing entries in the journal (page 2) and post the entries to the
ledger.

6. Prepare a post-closing trial balance.

7. Prepare the salaries and interest reversing entries in the journal (page 3) and post them to
the ledger.