JOURNAL ENTRIES

PRACTICE PROBLEM
 CONTRA ASSET ACCOUNTS
NORMAL ACCOUNT BALANCE CONTRA ASSETS ACCOUNT
1. Accounts Receivable Allowance for Doubtful Accounts
2. Fixed Assets Accumulated Depreciation
3. Intangible Assets Accumulated Amortization
4. Sales Revenue Sales Returns and Allowance / Sales
Discount
5. Loans Receivable Allowance for Doubtful Loans
 ASSETS LIABILITIES OWNER’S EQUITY
Asset Accounts LIABILITIES ACCOUNT OWNER’S CAPITAL ACCOUNT

Debit for Credit for

= Credit for Credit for
Decrease (-) Debit for Debit for
Increase Increase Increase
Decrease (-) Decrease (-)
(+) (+) (+)

Balance

Income Statement
OWNERS Account
EXPENSE
Drawing Accounts +Revenue Account
Account
Credit for
Debit for Credit for Debit for Debit for
Increase Credit for
Increase Decrease (-) Decrease (-) Increase
(+) Decrease (-)
(+) (+)
Requirements:
1. Create journal entries for each transaction
2. Create a T-account for each account
3. Make a Trial balance
4. Show the Accounting equation with their
corresponding accounts
Use the following accounts:
1. Cash
2. Accounts Receivable
3. Supplies
4. Prepaid Rent
5. Prepaid Insurance
6. Furniture and Fixtures
7. Equipment's

8. Accounts Payable

9. Expenses
10.Withdrawal
11.Revenues
12.Clarita, Capital
 Business Transactions:
A. Clarita opened a laundry shop and deposited P500,000 in
the name of the business.
a.Cash 500,000
Clarita,
Capital 500,000

B. Bought equipments on account for P200,000.

b.Equipment 200,000
Accounts
Payable 200,000
C. Bought furniture and fixtures paying cash worth P100,000.

Furniture and
Fixtures 100,000
Cash 100,000

D. Paid rent for the next 3 months for P30,000 cash.

d.Prepaid Rent 30,000

Cash 30,000
E. Bought supplies for P15,000.

e.Supplies 15,000
Cash 15,000

F. Earned revenues on a cash basis worth P25,000.

f.Cash 25,000
Revenues 25,000
G. Bought insurance for one year for P20,000.

Prepaid
Insurance 20,000
Cash 20,000
H. Paid P30,000 cash on the equipments that were
purchased on account (b).

Accounts
h. Payable 30,000
Cash 30,000
I. Received and paid electric bill for P4,000.

I.Expenses 4,000

Cash 4,000

J. Received cash for services rendered worth P16,000.

J.Cash 16,000

Revenues 16,000
K. Paid salaries to employees, P20,000.

k. Expenses 20,000

Cash 20,000

l. Clarita withdrew cash for personal use worth P15,000.

l.Withdrawal 15,000
Cash 15,000
M. Received and paid the advertising bill, P10,000.

M.Expenses 10,000

Cash 10,000

N. Rendered laundry services to a client who promised to pay next

month for P25,000.

Accounts
n. Receivable 25,000
Revenues 25,000
O. Received and paid water bill, P10,000.

o.Expenses 10,000

Cash 10,000

P. Received and paid telephone bill, P2,000.

p.Expenses 2,000

Cash 2,000
Q. Bought additional laundry supplies for P8,000.

q.Supplies 8,000
Cash 8,000

R. Clarita withdrew cash for personal use worth P10,000.

r.Withdrawal 10,000
Cash 10,000
S. Rendered laundry services to a client worth P40,000. The client
paid half of the revenues on cash and the other on account.

s.Cash 20,000
Accounts
Receivable 20,000
Revenues 40,000

T. Paid internet bill for P1,500.

t.Expenses 1,500

Cash 1,500
U. Collected cash for P10,000 for the laundry services rendered in
transaction (n).

u.Cash 10,000
Accounts
Receivable 10,000

V. Paid cable bill for P1,000.

v.Expenses 1,000

Cash 1,000
W. Bought additional equipments to accommodate increased
demand for P80,000.

w.Equipment 80,000
Cash 80,000

X. Bought supplies for P10,000

x.Supplies 10,000

Cash 10,000
Y. The client paid the balance of P20,000 in transaction (s).

y.Cash 20,000
Accounts
Receivable 20,000

Z. Clarita withdrew P50,000 for personal use.

z.Withdrawal 50,000
Cash 50,000
 Cash
T-ACCOUNTS 500,000 100,000
25,000 30,000
16,000 15,000
20,000 20,000
10,000 30,000
20,000 4,000
20,000
15,000
10,000
10,000
2,000
8,000
10,000
1,500
1,000
80,000
10,000
50,000
591,000 416,500
174,500
Accounts Receivable

25,000 20,000

20,000 10,000

45,000 30,000

15,000
 Expenses Clarita, Capital
Prepaid Rent
4,000
500,000
20,000 30,000
10,000 500,000 30,000
10,000 Equipment
2,000
1,500 200,000 Prepaid Insurance
1,000 80,000 20,000
20,000
48,500 280,000
Accounts Payable Withdrawal Revenues
15,000 25,000
30,000 200,000 10,000
16,000
170,000 50,000
25,000
75,000
40,000
Supplies 106,000
Furniture and Fixtures
15,000
100,000
8,000
100,000
10,000
33,000
Trial Balance
Accounts Debit Credit
Cash 174,500
Accounts
Receivable 15,000
Supplies 33,000
Prepaid
Insurance 20,000

Prepaid Rent 30,000

Furniture and
Fixtures 100,000
Equipment 280,000
Accounts
Payable 170,000
Revenues 106,000

Clarita, Capital 500,000

Expenses 48,500

Withdrawal 75,000
776,000 776,000