The unadjusted trial balance of Lakbay Tours as of December 31, 2018 is shown below: Ted Solomon, the owner, made an additional investment of P100,000 on March 1, 2018. On December 31, 2018, the following data were accumulated for use in making the adjusting entries: The company received an 18% P16,000 note from a key customer dated November 16, 2018. The prepaid rent has a beginning balance of P54,000 representing payment made for six month’s rent. During 2018, another two rent payments were made: P20,000 on June 30 and P19,000 on December 30. It is the policy of the lessor that rental be paid in advance for six months. The company bought all of its equipment on January 1, 2016. The equipment has an estimated total residual value of P12,000. The company uses the straight-line method of depreciation. Hint: Determine the annual depreciation based on the total accumulated depreciation and the acquisition date. Salaries earned by casual employees but unpaid and unrecorded amounted to P4,000. P800 unused office supplies remain on hand. 3% percentage tax due on December is based on gross quarterly receipts of P103,000. The company received tour revenues in advance on December 1 of which 80% has been earned. Solomon decided to write-off P15,000 accounts receivable which has been outstanding for two years and the client cannot be contacted anymore. Other accounts that will be used are as follows: 104 Interest Receivable           602 Bad Debt Expense 307 Salaries Payable               603 Depreciation Expense – Office Equipment 605 Rent Expense                   604 Office Supplies Expense Required:  Journalize the adjusting entries and post to the T accounts.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The unadjusted trial balance of Lakbay Tours as of December 31, 2018 is shown below:

Ted Solomon, the owner, made an additional investment of P100,000 on March 1, 2018. On December 31, 2018, the following data were accumulated for use in making the adjusting entries:

  1. The company received an 18% P16,000 note from a key customer dated November 16, 2018.
  2. The prepaid rent has a beginning balance of P54,000 representing payment made for six month’s rent. During 2018, another two rent payments were made: P20,000 on June 30 and P19,000 on December 30. It is the policy of the lessor that rental be paid in advance for six months.
  3. The company bought all of its equipment on January 1, 2016. The equipment has an estimated total residual value of P12,000. The company uses the straight-line method of depreciation. Hint: Determine the annual depreciation based on the total accumulated depreciation and the
    acquisition date.
  4. Salaries earned by casual employees but unpaid and unrecorded amounted to P4,000.
  5. P800 unused office supplies remain on hand.
  6. 3% percentage tax due on December is based on gross quarterly receipts of P103,000.
  7. The company received tour revenues in advance on December 1 of which 80% has been earned.
  8. Solomon decided to write-off P15,000 accounts receivable which has been outstanding for two years and the client cannot be contacted anymore.

Other accounts that will be used are as follows:
104 Interest Receivable           602 Bad Debt Expense
307 Salaries Payable               603 Depreciation Expense – Office Equipment 605 Rent Expense                   604 Office Supplies Expense

Required: 

Journalize the adjusting entries and post to the T accounts.

Lakbay Tours
Unadjusted Trial Balance
December 31, 2018
Account No.
Account Title
Debit
Credit
101
Cash
P441,453
102
Accounts Receivable
25,000
103
Notes Receivable
16,000
105
Office Supplies
3,700
106
Prepaid Rent
Office Equipment
Accumulated Depreciation – Office Equipment
Accounts Payable
SS & EC Premiums Payable
Pag-ibig Premiums Payable
PhilHealth Premiums Payable
Withholding Taxes Payable
93,000
201
112,000
202
P20,000
301
55,000
302
533
303
200
304
200
305
1,617
306
Unearned Service Revenue
40,000
401
Solomon, Capital
Solomon, Withdrawals
194,500
402
9,600
501
Tours Revenue
716,800
Advertising Expense
SS & EC Premiums Expense
Pag-ibig Premiums Expense
PhilHealth Premium Expense
Salaries Expense
601
607
26,000
10,897
608
1,100
609
1,100
610
176,000
611
Taxes & Licenses
20,000
612
Utilities Expense
93,000
P1,028,850 P1,028,850
Totals
Transcribed Image Text:Lakbay Tours Unadjusted Trial Balance December 31, 2018 Account No. Account Title Debit Credit 101 Cash P441,453 102 Accounts Receivable 25,000 103 Notes Receivable 16,000 105 Office Supplies 3,700 106 Prepaid Rent Office Equipment Accumulated Depreciation – Office Equipment Accounts Payable SS & EC Premiums Payable Pag-ibig Premiums Payable PhilHealth Premiums Payable Withholding Taxes Payable 93,000 201 112,000 202 P20,000 301 55,000 302 533 303 200 304 200 305 1,617 306 Unearned Service Revenue 40,000 401 Solomon, Capital Solomon, Withdrawals 194,500 402 9,600 501 Tours Revenue 716,800 Advertising Expense SS & EC Premiums Expense Pag-ibig Premiums Expense PhilHealth Premium Expense Salaries Expense 601 607 26,000 10,897 608 1,100 609 1,100 610 176,000 611 Taxes & Licenses 20,000 612 Utilities Expense 93,000 P1,028,850 P1,028,850 Totals
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