Dec. I Mr. Lang invested 500,000 personal cash in the business and borrowed P1,000,000 from BDO with an interest of 12% per annum, also to be invested in the business. 2 Instead of renting a space, Mr. Lang decided to bought specific land & building worth P1,275,000 for his office, paying P475,000 down payment and signing a mortgage with MetroBank payable in 10 years for the balance. Building 850,000; Land 425,000. Mr. Lang invested additional computer & Office equipment worth P32,400. 3 Purchased Laundry equipment on account, 324,000 Bought fumiture on cash, P54,000 Bought Laundry Supplies for cash, 27,500 Paid a radio advertisement for the two months airing, P15,000 Paid the 12 months insurance of the building, 18,000 Rendered Laundry Services to customers on cash, P16,525 Billed customer for Laundry Services, P12,250 8 5 7 Returned P7,250 worth of fumiture bought due to wrong specifications and received the cash for the returned. 9. Rendered laundry services on account P27,350 Bought P5,680 office supplies paid in cash Received P15,000 from a customer for a laundry service for the next two months that ends on Feb. 15, 2021. 10 15 Acquired supplies on account worth P5,500 15 Withdrew P17,750 cash and supplies worth P500 for personal use Rendered Laundry Services to customers on cash, P10,500 Paid the half month salary of the office secretary P9,600 17 16 Collected P12,250 on the previously billed customer. Rendered laundry services on account P25,350 Ordered additional supplies from Akala Tama Enterprise, P6,800. Received a bill for the electricity consumption for the month of December, 8,500. Collected P15,150 from laundry services rendered last Dec. 9. Received the supplies ordered on Dec. 22, and agreed to pay in thirty days. Paid CITY COOL, for the repair of the air conditioner unit in the office, P7,500. 19 22 24 27 31

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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Additional Information: 1. The interest on the borrowed fund from BDO is payable every 5th day of the following month. 2. The instalment payment of mortgage payable is every Nov. 30 starting 2021. 3. The building is depreciated using straight line method, with an estimated residual value of 65,000 and estimated useful life of 20 years. 4. The Office equipment, laundry equipment & furniture and Fixture have no residual value with an estimated useful life of 5 years. 5. Worth of P5,000 account receivable is considered uncollectible. 6. Salaries of employees is paid every 16 and 1" day of the month. 7. Supplies on hand is worth 15,750. Answer the questions by Journalizing the transactions above, prepare the trial balance and journalize all necessary journal entries.