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    Neha Dobee
    Juan de la Cruz began a system analysis business on July 1. Throughout the month, he recorded various business transactions including investing cash and equipment, paying rent and wages, purchasing additional equipment, completing work for clients and collecting or billing for payments. By July 31, Juan had recorded the transactions in journal entries, created T-accounts and prepared a trial balance to summarize the financial status of the new business for its first month of operations.

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    Neha Dobee
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    Juan de la Cruz began a system analysis business on July 1. Throughout the month, he recorded various business transactions including investing cash and equipment, paying rent and wages, purchasing additional equipment, completing work for clients and collecting or billing for payments. By July 31, Juan had recorded the transactions in journal entries, created T-accounts and prepared a trial balance to summarize the financial status of the new business for its first month of operations.

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    Juan de la Cruz began a system analysis business on July 1. Throughout the month, he recorded various business transactions including investing cash and equipment, paying rent and wages, purchasing additional equipment, completing work for clients and collecting or billing for payments. By July 31, Juan had recorded the transactions in journal entries, created T-accounts and prepared a trial balance to summarize the financial status of the new business for its first month of operations.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    183 views6 pages

    Acc

    Uploaded by

    Neha Dobee
    Juan de la Cruz began a system analysis business on July 1. Throughout the month, he recorded various business transactions including investing cash and equipment, paying rent and wages, purchasing additional equipment, completing work for clients and collecting or billing for payments. By July 31, Juan had recorded the transactions in journal entries, created T-accounts and prepared a trial balance to summarize the financial status of the new business for its first month of operations.

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    of 6

    Q: Juan de la Cruz began professional practice as a system analyst on July 1.

    He plans to
    prepare a monthly financial statement. During July, the owner completed these
    transactions (PHP = Philippine Peso, currency of Philippines):
    July 1. Owner invested PHp 500,000 cash along with computer equipment that had a
    market value of php. 120,000 two years ago but was now worth Php. 100,000 only.
    July 2. Paid php. 15,000 cash for the rent of office space for the month.
    July 4. Purchased php. 12,000 of additional equipment on credit (due within 30 days).
    July 8. Completed awork for a client and immediately collected the php. 32,000 cash.
    July 10. Completed work for a client and sent a bill for php. 27,000 to be paid within 30
    days.
    July 12. Purchased additional equipment for php. 8,000 in cash.
    July 15. Paid an assistant php. 6,200 cash as wages for 15 days.
    July 18. Collected php. 15,000 on the amount owed by the client.
    July 25. Paid php. 12,000 cash to settle the liability on the equipment purchased.
    July 28. Owner withdrew php. 500 cash for personal use.
    July 30. Completed work for another client who paid only php. 40,000 for 50% of the
    system design.
    July 31. Paid salary of assistant php. 700.
    July 31. Received PLDT bill, php. 1,800 and Meralco bill php. 3,800.
    Required:
    Prepare the journal entries, T accounts and trial balance for this business.
    A: This is a really good question to practice.
    Journal entries for the above transactions:
    July 1 Dr Cash 500,000
    Dr Computer Eqpt 100,000
    Cr Capital 600,000
    Owner started business with cash and computer Eqpt.
    2 Dr Rent Exp 15,000
    Cr Cash 15,000
    Paid rent of office for the month of July.
    4 Dr Equipment 12,000
    Cr Creditors 12,000
    Equipment purchased for business use.
    8 Dr Cash 32,000
    Cr Services rendered (income) 32,000
    Services rendered for a client.
    10 Dr Debtors 27,000
    Cr Services rendered (income) 27,000
    Services rendered for a client.

    12 Dr Equipment 8,000
    Cr Cash 8,000
    Additional equipment purchased.
    15 Dr Salaries & Wages 6,200
    Cr Cash 6,200
    Paid wages to assistant for 15 days.
    18 Dr Cash 15,000
    Cr Debtors 15,000
    Received cash from debtor.
    25 Dr Creditors 12,000
    Cr Cash 12,000
    Creditors of Eqpt purchased, settled.
    28 Dr Drawings 500
    Cr Cash 500
    Owner withdrew cash for personal use.
    30 Dr Cash 40,000
    Dr. Debtors 40,000
    Cr Services rendered (income) 80,000
    50% amount received by a client on a/o work completed.
    31 Dr Salaries & Wages 700
    Cr Cash 700
    Paid salary to the assistant.
    31 Dr Utilities Exp (PLDT) 1,800
    Dr Utilities Exp (Meralco) 3,800
    Cr Creditors 5,600
    PLDT and Meralco have been assumed to be the utility companies.
    Note: In this example we have combined salaries and wages into one account, but
    sometimes in real life these are kept separate - one account for wages and another
    account for salaries.
    T-ACCOUNTS:

    TRIAL BALANCE:

    Hope you enjoyed the solutions we provided here for this exercise on

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