Case Problem Partnership
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anonbeautifulCASE 1
INTRODUCTION
In January 2020, Andy and Trinidad formed the ABC Partnership with initial capital contributions of ₱200,000 each
and agreed to share profits and losses equally. ABC is a NON-VAT registered entity engaged in rendering
professional accounting services with an office located in Gensan Drive, Koronadal City.
The entity prepares financial statements on a monthly basis; hence, it prepares adjusting and closing entries at the
end of each month.
ABC maintains the following chart of accounts:
111 Cash
113 Accounts Receivable
118 Input VAT
122 Office Equipment
122A Accumulated Depreciation-Office Equipment
211 Accounts Payable
212 Withholding Tax Payable
213 Expanded Withholding Tax Payable
214 SSS, PhilHealth and Pag-IBIG Contribution Payable
215 Utilities Payable
216 Accrued Percentage Tax Payable
311 A.D. Tesa, Capital
312 T.E. Seda, Capital
313 A.D. Tesa, Drawings
314 T.E. Seda, Drawings
315 Income Summary
411 Service Revenue
512 Salaries Expense
513 SSS, PhilHealth and Pag-IBIG Contributions
521 Rent Expense
522 Utilities Expense
523 Supplies Expense
524 Transportation Expense
531 Depreciation Expense
532 Percentage Tax Expense
551 Miscellaneous Expense
The partnership’s accounting policy includes the following:
1. The partnership uses special journals to record service revenues, cash receipts, and cash disbursements in
addition to general journal. It also maintains subsidiary ledger for its clients.
2. Depreciation on office equipment is 10% per annum based on the office equipment balance
3. Purchases of supplies are immediately charge to expense
4. Percentage tax is accrued monthly at 3% of service revenue.
ABC’s post-closing trial balance as of October 31, 2020 is as follows:
Debit Credit
Cash ₱ 255,000.00
Accounts Receivable 115,000.00
Office Equipment 210,000.00
Accumulated Depreciation - Office Equipment ₱ 17,500.00
Withholding Tax Payable 800.00
Expanded Withholding Tax Payable 500.00
SSS, SSS, PhilHealth and Pag-IBIG Contribution Payable 5,550.00
Utilities Payable 3,800.00
Accrued Percentage Tax Payable 6,750.00
A.D. Tesa, Capital 272,550.00
T.E. Seda, Capital 272,550.00
