Mr. George opened a janitorial services business called “George Johnny” on November 1, 20x1 and uses a calendar year. The following were the transactions during the year. Mr. George made an investment of P100,000 to the business. The total business permit and other licenses amounted to P4,800. The business acquired janitorial equipment for P30,000 on account on November 1, 20x1. The equipment has a useful life of 5 years. The business purchased supplies worth P60,000. The business uses the asset method in recording prepayments. The business obtained a 12%, one-year, bank loan for P50,000 on November 1, 20x1. Principal and interest are due at maturity date. The business paid six months’ rent in advance amounting to P9,000 on November 1, 20x1. The business took one-year insurance for P6,000 on December 1, 20x1. Total service fees billed to clients, on account, amounted to P400,000. Total collections on accounts receivable amounted to P270,000. Mr. George took P30,000 cash from the business. Total salaries paid amounted to P180,000. Additional information: One of the debtors of Mr. George with an account balance of P50,000 is undergoing financial difficulties. Mr. George estimated that only P40,000 of the account will be collected. Unused supplies at the end of the period amounted to P20,000. Unpaid employee salaries amounted to P30,000 Requirements: Provide the journal entries Post the entries to the ledger (use T-accounts) Prepare the unadjusted trial balance

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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Mr. George opened a janitorial services business called “George Johnny” on November 1, 20x1 and uses a calendar year. The following were the transactions during the year.

Mr. George made an investment of P100,000 to the business.
The total business permit and other licenses amounted to P4,800.
The business acquired janitorial equipment for P30,000 on account on November 1, 20x1. The equipment has a useful life of 5 years.
The business purchased supplies worth P60,000. The business uses the asset method in recording prepayments.
The business obtained a 12%, one-year, bank loan for P50,000 on November 1, 20x1. Principal and interest are due at maturity date.
The business paid six months’ rent in advance amounting to P9,000 on November 1, 20x1.
The business took one-year insurance for P6,000 on December 1, 20x1.
Total service fees billed to clients, on account, amounted to P400,000.
Total collections on accounts receivable amounted to P270,000.
Mr. George took P30,000 cash from the business.
Total salaries paid amounted to P180,000.

Additional information:

One of the debtors of Mr. George with an account balance of P50,000 is undergoing financial difficulties. Mr. George estimated that only P40,000 of the account will be collected.
Unused supplies at the end of the period amounted to P20,000.
Unpaid employee salaries amounted to P30,000

Requirements:

Provide the journal entries
Post the entries to the ledger (use T-accounts)
Prepare the unadjusted trial balance
Provide the adjusting entries
Complete the worksheet up to the post-closing trial balance
Prepare all closing entries

Prepare the balance sheet and income statement

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