PROBLEM 2
On December 1 of the current year, Remeses Balungaya opened the “Balungaya’s Multitrading Enterprises,” and during the
month, the following transaction were completed:
Dec 1- Remeses Balungaya invested PHP. 300 000
Dec 1- Bought an equipment and supplies amounting to PHP. 45 000 and PHP. 20 000, respectively. After
that, bought a vehicle amounting to PHP.950 000 with a down payment of PHP. 50 000 from Oshiro
Merchandising, Oshiro Merchandising issued a note for unpaid balance.
Dec. 1- Paid Taxes and Licenses to BIR amounting to PHP. 3 500
Dec. 2- Paid PHP. 3 500 to an advertising company.
Dec. 4- Bought Furniture and Fixtures amounting to PHP. 18 500 on account.
Dec. 5- Received a cash amounting to PHP. 6 750 from various customers.
Dec. 6- Rendered services to Edi Wow Company amounting to PHP. 12 800, and received
an amount of PHP. 5 000.
Dec. 8- Rendered services to Wang Wong Company amounting to PHP. 15 800, and received an amount of
PHP. 10 500
Dec. 9- Bought supplies amounting to PHP. 9 875 with a down payment of PHP. 5 000, the seller issued a
note for the balance.
Dec. 10- Received an amount of PHP. 7 800 from the full payment of Edi Wow Company.
Dec. 11- Received PHP. 10 000 from various customers.
Dec. 12- Remeses Balungaya bought a printer amounting PHP. 6 500 for his son’s school works.
Dec. 14- Bought supplies amounting to PHP. 10 500
Dec. 15- Paid a 5-month rent of the business worth PHP. 20 000, and already used a halfmonth which
recorded as expenses.
Dec. 16- Paid his worker amounting to PHP. 7 850.
Dec. 16- Received the full payment of Wang Wong Company. Received an amount of PHP. 7 500 from
various customers.
Dec. 17- Bought a Tools amounting to PHP. 15 950 on account, and received PHP. 3 450 from various
company.
Dec. 18- Paid the Notes payable issued last Dec. 9
Dec. 19- Used Gas and Oil amounting to PHP. 2 375.
Dec. 20- Rendered service to Manna Cupule Merchandising amounting to PHP. 18 025 and received an
amount of PHP. 8 025, Balungaya’s Multi-trading Enterprises issued a note for the balance.
Dec. 20- Paid miscellaneous bills amounting to PHP.325
Dec. 21- Bought Supplies amounting to PHP. 8 345, and billed Bonggutela Gorospe for the rendered service
amounting to PHP. 26 750.
Dec. 24- Received PHP. 5 230 from various customers.
Dec. 27- Bought supplies amounting to PHP. 4 950.
Dec. 28- Received an amount of PHP. 5 000 from various customers, and paid the wages of the employees
amounting to PHP. 7 850.
At the end of the month the following data are gathered:
e. It is estimated that 5% of the outstanding receivable will be uncollectible.
f. Store equipment was purchased on December 1 of the current year and is expected to be useful for 6 years
at the end of which, it can be sold for PHP. 800
g. Store vehicle was purchased on December 1 of the current year and is expected to be useful for 10 years at t
he end of which, it can be sold at PHP. 75 000
h. The actual count of supplies revealed a balance of PHP. 10 000
Requirement
Accounting Cycle
CHART OF ACCOUNTS LIABILITY
ASSET 211 Notes Payable
111 Cash 212 Accounts Payable
112 Accounts Receivable
112a Allowance for Bad Debts OWNER’S EQUITY
113 Equipment 311 R. Balungaya, Capital
113a Accumulated Depreciation- Equipment 312 R. Balungaya, Drawing
114 Supplies 313 Income and Expense Summary
115 Vehicle
115a Accumulated Depreciation- Vehicle INCOME
116 Furniture and Fixtures 411 Service Revenue
116a Accumulated Depreciation- Furniture and Fixtures
117 Prepaid Rent EXPENSES
118 Tools 511 Wages Expense
119 Notes Receivables 512 Taxes and Licenses Expense
513 Miscellaneous Expense
514 Gas and Oil Expense
515 Advertising Expense
516 Rent Expense
