JS Company started operations on January 1, 2019. A summary of the transactions during the year is provided below: 1. The owner Johanes Simons invested ₱2,000,000 to the business. 2. Acquired equipment for ₱1,000,000 cash. 3. Obtained a 12%, one-year, bank loan of ₱500,000. 4. Paid one-year insurance amounting to ₱160,000 on September 30, 2019. JS Company uses the “asset method” in recording prepayments. 5. Service fees earned amounted to ₱6,000,000, one-third of which was on cash basis. 6. Collected ₱1,800,000 accounts receivable. 7. The company paid salaries expense paid amounted to ₱1,200,000. 8. Total utilities expense paid amounted ₱500,000. 9. Supplies purchased on cash basis amounted to ₱120,000. 10. The owner Johanes Simons withdrew Cash amounted to ₱1,400,000. a.Provide the journal entries for the transactions, using the following Account Titles: Cash                                        Service fees Accounts receivable                Salaries expense Prepaid insurance                   Utilities expense Prepaid supplies                     Supplies Expense Equipment                              Depreciation Expense Accumulated Depreciation     Insurance Expense Notes payable                         Interest Expense J. Simons, Capital                    Interest Payable J. Simons, Drawings                Income Summary b.Prepare the adjusting entries (see additional information below). Information for adjusting entries: i. The equipment was acquired on January 1, 2019 and was estimated to have a useful life of 10 years. ii. The loan was obtained on July 1, 2019. Principal and interest are due at maturity date. iii. The one-year insurance covers the period October 1, 2019 to September 30, 2020. iv. Unused supplies at the end of the year amounted to ₱40,000. c.Complete the worksheet.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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JS Company started operations on January 1, 2019. A summary of the transactions during the year is provided below:

1. The owner Johanes Simons invested ₱2,000,000 to the business.
2. Acquired equipment for ₱1,000,000 cash.
3. Obtained a 12%, one-year, bank loan of ₱500,000.
4. Paid one-year insurance amounting to ₱160,000 on September 30, 2019. JS Company uses the “asset method” in recording prepayments.
5. Service fees earned amounted to ₱6,000,000, one-third of which was on cash basis.
6. Collected ₱1,800,000 accounts receivable.
7. The company paid salaries expense paid amounted to ₱1,200,000.
8. Total utilities expense paid amounted ₱500,000.
9. Supplies purchased on cash basis amounted to ₱120,000.
10. The owner Johanes Simons withdrew Cash amounted to ₱1,400,000.

a.Provide the journal entries for the transactions, using the following Account Titles:

Cash                                        Service fees
Accounts receivable                Salaries expense
Prepaid insurance                   Utilities expense
Prepaid supplies                     Supplies Expense
Equipment                              Depreciation Expense
Accumulated Depreciation     Insurance Expense
Notes payable                         Interest Expense
J. Simons, Capital                    Interest Payable
J. Simons, Drawings                Income Summary

b.Prepare the adjusting entries (see additional information below).

Information for adjusting entries:
i. The equipment was acquired on January 1, 2019 and was estimated to have a useful life of 10 years.

ii. The loan was obtained on July 1, 2019. Principal and interest are due at maturity date.

iii. The one-year insurance covers the period October 1, 2019 to September 30, 2020.

iv. Unused supplies at the end of the year amounted to ₱40,000.

c.Complete the worksheet.

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