Journalizing _ 01

On June 1, 2014, DM Company, a printing, publishing, and distribution company was established by Mr. Tan. During the month of June,
the following transactions were completed:

6/1 Tan invested the following to his business: Cash of P1,100,000;

6/2 Bought desks, tables, and chairs costing P200,000; Copiers, printers, and machines costing P400,000 all in cash
6/3 Tan bought additional chairs and tables from SL Ruiz on account for P12,000
6/5 Bought various office supplies from Paperworld by paying P20,500 in cash
6/8 Paid for 1 year insurance for the office building for P20,000
6/10 Rendered printing services to UPVTC on account for P50,000
6/11 Paid ½ of the account owed to SL Ruiz in cash
6/15 Paid salaries of workers amounting to P20,000
6/18 Ordered additional equipment from Five Star Co. by paying ½ of the cost in cash for P20,000
6/20 Borrowed P500,000 from BDO payable in 1 year by issuing a promissory note
6/22 Received and paid the electric bill from LEYECO P10,000
6/23 Collected 1/3 of the account owed by UPVTC to DM Company
6/25 Tan’s wife wanted to buy an LV handbag so he withdrew P80,000 from DM Company for personal use
6/26 Paid for the remaining balance of the account owed to SL Ruiz
6/28 Paid for advertising to Leyte-Samar Daily Express amounting to P2,000
6/29 Paid for the current month’s rent for P20,000
6/30 Received payment of the remaining balance owed by UPVTC

Requirement: Prepare the journal entries for the above transactions.

Journalizing _ 02

Jan 2: Mr. A borrowed P500,000 from the bank. He in turn deposited it in the account of Good Spasm, a massage business he is organizing today.

Jan 2: Signed a contract to rent a building. A deposit refundable at the end of a contract term equivalent to two months’ rent was paid. Also, advance
rent for three months was paid. Also, advance rent for three months was paid. Monthly rent was set at P15,000.

Jan 4: Purchased some massage equipment worth P250, 000 for use in the business. As payment, he used cash that he had been keeping in his
house.

Jan 5: Purchased on credit massage supplies worth P50,000 for use in the business.

Jan 6: Hired five employees today. Three would serve as masseuses and will be paid P18,000/month. One was hired as receptionist and will be paid
P12,000/month. The fifth was hired as security guard and will receive P10,000/month. Paid P5,000 pesos to the person who helped find these
workers.

Jan 7: Placed an ad on TV to promote the business. Contract price was P25,000 (to be paid by February 1) for TV ad spots running daily starting
today until the end of February.

Jan 8: Grand opening today. As promo, the first fifty customers were given massage services at 50% off. Regular rate is P120/hour. 150 clients
came today and were all given 1-hour massage services. All paid cash.

Jan 9: Eighty clients came today and were given massage services at the regular rate of P120/hour. Half paid in cash (all given 1.5 hours massage)
while the other half (all given 2 hours massage) paid 50% of their bill and the balance payable next month.

Jan 15: Paid P38,000 as half month salary to employees. 10% was withheld for income tax.

Jan 15: Rendered massage services to 75 clients at P120/hour. 25% were given 2 hours of massage and the remaining clients all had 1 hour of
massage. All were on credit.

Jan 16: 50% of the on credit clients from Jan 9 settled their accounts today.

Requirement: Prepare the journal entries for the above transactions.

Journalizing _ 03

You were given the following transactions of Padala Tacloban Branch for 2014:

Jan 1 Mr. X, the owner, made the following investments: Cash (P900,000), Building (cost was P700,000 and market value is P850,000) and
Land (with cost of P250,000 and appraised value of P900,000).
Jan 2 Purchased delivery truck (take up as Delivery Vehicles) worth P440,000. There was a 10% downpayment and the balance payable on
January 2, 2015 at 12% annual interest. Freight cost for the truck paid by Padala was P10,000.
Jan 3 Paid building insurance premiums for the entire year, P13,200.
Feb 12 Purchased supplies for cash, P30,000.
Mar 15 Received P120,000 for delivery services to be rendered starting June 2014.
Apr 30 Paid a total of P76,800 to employees. This represented their salaries for the first half of the year. The employees are supposed to be
paid every 30th of the month.
Jul 1 Paid the electricity bill for Jan-June, P13,500.
Aug 18 A client paid a total of P25,000 for delivery services rendered today.
Sept 20 Earned a total P219,500 for services during the day. All were on credit.
Oct 21 Purchased supplies on credit for P2,000.
Nov 23 Mr. X withdrew P5,000 worth of supplies for his personal use. He doesn’t intend to replace the supplies he got.
Dec 25 Collected half of the receivable from Sep 20.
Dec 26 Rendered delivery services on credit, P80,000.
Dec 30 Paid business taxes of P2,800.

Additional info for consideration as of end of the year:

1. Supplies at year end per count is P4,800.

2. The estimated life of the building is 8 years. Salvage value is P20,000.
3. Salaries to be accrued at the end of the year is P26,000. Unpaid & unrecorded electricity bill is P11,200.
4. Bad debts is estimated at 5% of revenue.
5. It was determined that 80% of what was received last Mar 15 is earned as at end of the year.

Required: 1) Prepare the journal entries for the above transaction.

2) Prepare the unadjusted trial balance as of December 31, 2014.
3) Prepare all relevant adjusting entries as of December 31, 2014.