GENERAL JOURNAL

DATE Post
20XX DESCRIPTION Ref. Debit Credit
1 May 2 Cash 11 150,000 1
2 Mike, Capital 12 150,000 2
3 To record as initial investment 3
4 4
5 2 Repair Equipment 14 60,000.00 5
6 Cash 11 40,000.00 6
7 Accounts Payable 21 20,000.00 7
8 To record bought repair equipment 8
9 9
10 7 Tools 13 12,000.00 10
11 Cash 11 12,000.00 11
12 To record purchased tools for cash 12
13 13
14 7 Rent Expense 51 4,000.00 14
15 Cash 11 4,000.00 15
16 To record paid rent of the shop 16
17 17
18 8 Taxes and Licenses 53 4,000.00 18
19 Cash 11 4,000.00 19
20 To record as paid taxes and licenses 20
21 21
22 11 Cash 11 45,000.00 22
23 Service Income 41 45,000.00 23
24 To record as service rendered for cash 24
25 25
26 18 Accounts Receivable 12 20,000.00 26
27 Service Income 41 20,000.00 27
28 To record service rendered on credit 28
29 29
30 21 Truck 15 80,000.00 30
31 Mike, Capital 31 80,000.00 31
32 To record Mike,Capital 32
33 33
34 25 Mike, Drawing 32 3,000.00 34
35 Cash 11 3,000.00 35
36 To record as drawing 36
37 37
38 31 Wages Expense 52 8,000.00 38
39 Cash 11 8,000.00 39
40 To record paid wages of the shop helpers 40
41 41
42 31 Accounts Payable 21 20,000.00 42
43 Note Payable 22 20,000.00 43
44 To record isssued promissory note 44
45 45
46 46
47 47
48 48
49 49
50 50
51 51
52 52
53 53
54 54
55 55
56 56
57 57
58 58
59 59
60 60
61 61
62 62
63 63
64 64
65 65
66 66
67 67
68 68
69 69
70 70
 Reminders:

1.) No indention = minus 5 in total score

2.) Wrong Spelling = wrong
3.) No explanation = minus 5 in total score
4.) Missing Post references = minus 5 in total score
5.) Missing double rules = minus 5

Problem 4-2
Mike opened a repair shop which he called Big M Repair Shop. During May 2019, his first month of operations,
he completed the following transactions:
May 2 Mike invested P150,000 cash in an auto repair shop.
2 Bought necessary repair equipment from 3B Auto Supply for P60,000, p
P40,000 in cash and the balance to be paid within 30 days.
7 Purchased tools for cash, P12,000.
7 Paid the rent on the shop space, P4,000.
8 Paid taxes and licenses, P4,000.
11 Services rendered for cash, P45,000.
18 Services rendered to Jam, P20,000, on credit.
21 Mike transferred his truck for the exclusive use in the business P80,000.
25 Mike withdrew cash of P3,000 for his personal use.
31 Paid the wages of the shop helpers, P8,000.
31 Gave a promissory note to 3B Auto Supply in the amount of P20,000 as
temporary settlement of his liability.

Required: Record the above transactions in a two-column journal using the following accounts: Cash;
Accounts Receivable; Tools; Repair Equipment; Truck; Notes Payable; Accounts Payable; Mike, Capital; Mike,
Drawing; Service Income; Rent Expense; Wages Expense; Taxes and Licenses. Post to Ledger and Prepare Trial
Balance ending May 31, 2019

Chart of Accounts:
11 - Cash 21 - Accounts Payable 51 - Rent Expense
12 - Accounts Receivable 22 - Notes Payable 52 - Wages Expense
13 - Tools 31 - Mike, Capital 53 - Taxes and Licenses
14 - Repair Equipment 32 - Mike, Drawing
15 - Truck 41 - Service Income
 GENERAL LEDGER

GENERAL LEDGER
CASH No 11 TRUCK No 15
Date PR DEBIT CREDIT BALANCE Date PR DEBIT CREDIT BALANCE
May 2 J-1 150,000 150,000 May 21 J-1 80,000 80,000
2 J-1 40,000 110,000
7 J-1 12,000 98,000 ACCOUNTS PAYABLE No 21
7 J-1 4,000 94,000 Date PR DEBIT CREDIT BALANCE
8 J-1 4,000 90,000 May 2 J-1 20,000 20,000
11 J-1 45,000 135,000 31 J-1 20,000 -
25 3,000 132,000
31 8,000 124,000
NOTES PAYABLE No 22
Date PR DEBIT CREDIT BALANCE
May 31 J-1 20,000 20,000

ACCOUNTS RECEIVABLE No 12 MIKE, CAPITAL No 31

Date PR DEBIT CREDIT BALANCE Date PR DEBIT CREDIT BALANCE
May 18 J-1 20,000 20,000 May 2 J-1 150,000 150,000
21 J-1 80,000 230,000
MIKE, DRAWING No 32
TOOLS No 13 PR DEBIT CREDIT BALANCE
Date PR DEBIT CREDIT BALANCE May 25 J-1 3,000 3,000
May 7 J-1 12,000 12,000
SERVICE INCOME No 41
REPAIR EQUIPMENT No 14 Date PR DEBIT CREDIT BALANCE
Date PR DEBIT CREDIT BALANCE May 11 J-1 45,000 45,000
May 2 J-1 60,000 60,000 18 J-1 20,000 65,000
RENT EXPENSE No 51
Date PR DEBIT CREDIT BALANCE
May 7 J-1 4,000 4,000

WAGES EXPENSE No 52
Date PR DEBIT CREDIT BALANCE
May 31 J-1 8,000 8,000

TAXES AND LICENSES No 53

Date PR DEBIT CREDIT BALANCE
May 8 J-1 4,000 4,000
 GENERAL LEDGER

Chart of Accounts:
11 - Cash 21 - Accounts Payable 51 - Rent Expense
12 - Accounts Receivable 22 - Notes Payable 52 - Wages Expense
13 - Tools 31 - Mike, Capital 53 - Taxes and Licenses
14 - Repair Equipment 32 - Mike, Drawing
15 - Truck 41 - Service Income

Trial Balance

Debit Credit
Cash 124,000 -
Accounts Receivable 20,000 -
Tools 12,000 -
Repair Equipment 60,000 -
Truck 80,000 -
Accounts Payable - -
Notes Payable - 20,000
Mike, Capital - 230,000
Mike, Drawing 3,000 -
Service Income - 65,000
Rent Expense 4,000 -
Wages Expense 8,000 -
Taxes and Licenses 4,000 -
315,000 315,000