Arnina established a service business to be known as Arnina Photography on July 1, 2021. During the first month, the following transactions occurred: July 1: Arnina transferred cash of P300,000 from her personal bank account to an account to be used for her business. She also invested the following: digital camera, P45,000; manual camera, P25,000; desktop computer, P28,000; photo papers and ink, P14,000. July 4: paid six-month advance rent to Cyrene Commercial Complex, P30,000 July 6: Received a statement of account from Brian News for advertising this month, P5,500. July 8: Bought photo enhancing and editing equipment from Mirzi Outlet for P40,000. Arnina paid 30% down payment and the balances on account. July 12: Hired office assistant with a monthly salary of P6,000. The office assistant officially started on July 16, 2014. July 13: Photography services rendered totaled P180,000. Terms 25% cash and the balance settled on account. July 14: Purchased office sofa set from Renzo Designs for P30,000 on account. July 15: Paid various operating expenses during the month: Meeting potential clients, P4,000; Electricity, P23,000; Telephone expense, P6,000; and Repair and Maintenance expense, P2,500. July 18: Photography services rendered totaled P185,000, of which 25% was settled with an interest-bearing note and balance on account. July 20: Received photography advances from a couple for a prenuptial coverage to be rendered next month, P60,000 July 22: Collected 90% of the outstanding receivable from July 13 transaction. July 24: Paid in full statement of account received last July 6. July 26: Paid 80% of the outstanding obligation to Mirzi Outlet, she issued an interest-bearing note. July 28: Paid half of the outstanding obligation to Renzo Design. July 31: Paid salary of the office assistant for 16 days, P3,097.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Arnina established a service business to be known as Arnina Photography on July 1, 2021. During the first month, the following transactions occurred:

July 1: Arnina transferred cash of P300,000 from her personal bank account to an account to be used for her business. She also invested the following: digital camera, P45,000; manual camera, P25,000; desktop computer, P28,000; photo papers and ink, P14,000.
July 4: paid six-month advance rent to Cyrene Commercial Complex, P30,000
July 6: Received a statement of account from Brian News for advertising this month, P5,500.
July 8: Bought photo enhancing and editing equipment from Mirzi Outlet for P40,000. Arnina paid 30% down payment and the balances on account.
July 12: Hired office assistant with a monthly salary of P6,000. The office assistant officially started on July 16, 2014.
July 13: Photography services rendered totaled P180,000. Terms 25% cash and the balance settled on account.
July 14: Purchased office sofa set from Renzo Designs for P30,000 on account.
July 15: Paid various operating expenses during the month: Meeting potential clients, P4,000; Electricity, P23,000; Telephone expense, P6,000; and Repair and Maintenance expense, P2,500.
July 18: Photography services rendered totaled P185,000, of which 25% was settled with an interest-bearing note and balance on account.
July 20: Received photography advances from a couple for a prenuptial coverage to be rendered next month, P60,000
July 22: Collected 90% of the outstanding receivable from July 13 transaction.
July 24: Paid in full statement of account received last July 6.
July 26: Paid 80% of the outstanding obligation to Mirzi Outlet, she issued an interest-bearing note.
July 28: Paid half of the outstanding obligation to Renzo Design.
July 31: Paid salary of the office assistant for 16 days, P3,097.

Required:

Journalize the foregoing transaction

Arnina Photography
Chart of Accounts
ASSET
Owner's Equity
301 Arnina, Capital
302 Arnina, Drawing
303 Income Summary
101 Cash
102 Accounts Receivable
103 Notes Receivable
104 Photography Supplies
105 Advances to Employees
106 Photography Equipment
107 Prepaid Rent Expense
108 Photography Equipment
109 Furniture and Fixtures
Revenue
401 Photography Service Revenue
402 Interest Income
403 Other Income
110 Office Equipment
111 Delivery Vehicle
Expenses
501 Salaries Expense
502 Rent Expense
LIABILITIES
503 Advertising Expense
201 Accounts Payable
202 Notes Payable
504 Representation Expense
505 Utilities Expense
506 Communication Expense
203 Accrued Salaries
204 Accrued Rent
507 Repair and Maintenance
508 Other Expenses
205 Advances from Clients
206 Loan Payable

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