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    Problem 4

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    Caila Nicole Reyes
    1. The document records various journal entries made by Entity C throughout 20X1, including the initial investment, purchase of equipment, prepaid rent, revenues and expenses. 2. It provides the unadjusted trial balance, adjusting entries to record depreciation expense and rent expense, and the adjusted trial balance. 3. The closing entries close the income and expense accounts to the income summary account, and then close that account to the capital account of the owner.

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    Problem 4

    Uploaded by

    Caila Nicole Reyes
    32 views11 pages
    1. The document records various journal entries made by Entity C throughout 20X1, including the initial investment, purchase of equipment, prepaid rent, revenues and expenses. 2. It provides the unadjusted trial balance, adjusting entries to record depreciation expense and rent expense, and the adjusted trial balance. 3. The closing entries close the income and expense accounts to the income summary account, and then close that account to the capital account of the owner.

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    PROBLEM-4

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    1. The document records various journal entries made by Entity C throughout 20X1, including the initial investment, purchase of equipment, prepaid rent, revenues and expenses. 2. It provides the unadjusted trial balance, adjusting entries to record depreciation expense and rent expense, and the adjusted trial balance. 3. The closing entries close the income and expense accounts to the income summary account, and then close that account to the capital account of the owner.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    32 views11 pages

    Problem 4

    Uploaded by

    Caila Nicole Reyes
    1. The document records various journal entries made by Entity C throughout 20X1, including the initial investment, purchase of equipment, prepaid rent, revenues and expenses. 2. It provides the unadjusted trial balance, adjusting entries to record depreciation expense and rent expense, and the adjusted trial balance. 3. The closing entries close the income and expense accounts to the income summary account, and then close that account to the capital account of the owner.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 11

    ENTITY C

    DECEMBER 31, 20X1


    JOURNAL ENTRIES

    DEBIT CREDIT
    1 JAN. 1, 20X1 CASH 2,000,000.00
    C., CAPITAL 2,000,000.00
    To record initial investment of 2,000,000.00 in the business.

    2 JAN. 1, 20X1 OFFICE EQUIPMENT 800,000.00


    CASH 800,000.00
    To record purchase of equipment on cashwith 10 yrs. Useful life

    3 JAN. 1, 20X1 PREPAID RENT 720,000.00


    CASH 720,000.00
    To record advance rent for 2 years(Asset Method).

    4 ACCOUNTS RECEIVABLE 2,900,000.00


    SERVICE INCOME 2,900,000.00
    To record services rendered on account.

    5 SUPPLIES EXPENSE 190,000.00


    CASH 190,000.00
    To record purchase of supplies.

    6 UTILITIES EXPENSE 260,000.00


    CASH 260,000.00
    To record payment of utilities.

    7 SALARIES EXPENSE 1,900,000.00


    CASH 1,900,000.00
    To record payment of salaries.

    8 CASH 2,700,000.00
    ACCOUNTS RECEIVABLE 2,700,000.00
    To record payment of utilities.
    ENTITY C
    GENERAL LEDGER
    DECEMBER 31, 20X1
    CASH OFFICE EQUIPMENT ACCOUNTS RECEIVABLE
    DEBIT CREDIT DEBIT CREDIT DEBIT
    1 2,000,000.00 800,000.00 2 2 800,000.00 4 2,900,000.00
    8 2,700,000.00 720,000.00 3
    190,000.00 5
    260,000.00 6
    1,900,000.00 7

    4,700,000.00 3,870,000.00 800,000.00 0.00 2,900,000.00


    830,000.00 800,000.00 200,000.00

    SERVICE INCOME UTILITIES EXPENSE SALARIES


    DEBIT CREDIT DEBIT CREDIT DEBIT
    2,900,000.00 4 6 260,000.00 260,000.00 7 1,900,000.00

    2,900,000.00 2,900,000.00 260,000.00 260,000.00 1,900,000.00

    SUPPLIES EXPENSE RENT EXPENSE INCOME & EXPENSE SUMMARY


    DEBIT CREDIT DEBIT CREDIT DEBIT
    5 190,000.00 190,000.00 360,000.00 360,000.00 260,000.00
    1,900,000.00
    80,000.00
    190,000.00
    360,000.00
    190,000.00 190,000.00 360,000.00 360,000.00 2,790,000.00
    110,000.00
    ACCOUNTS RECEIVABLE PREPAID RENT C. CAPITAL
    CREDIT DEBIT CREDIT DEBIT CREDIT
    2,700,000.00 8 3 720,000.00 2,000,000.00 1
    110,000.00

    2,700,000.00 720,000.00 0.00 2,110,000.00

    SALARIES DEPRECIATION ACCUMULATED DEPRECIATION


    CREDIT DEBIT CREDIT DEBIT CREDIT
    1,900,000.00 80,000.00 80,000.00 80,000.00

    1,900,000.00 80,000.00 80,000.00

    OME & EXPENSE SUMMARY


    CREDIT
    2,900,000.00

    2,900,000.00
    110,000.00
    ENTITY C.
    UNADJUSTED TRIAL BALANCE
    DECEMBER 31, 20X1

    DEBIT CREDIT
    CASH 830,000.00
    OFFICE EQUIPMENT 800,000.00
    ACCOUNTS RECEIVABLE 200,000.00
    PREPAID RENT 720,000.00
    C., CAPITAL 2,000,000.00
    SERVICE INCOME 2,900,000.00
    SUPPLIES EXPENSE 190,000.00
    UTILITIES 260,000.00
    SALARIES 1,900,000.00
    TOTAL BALANCES 4,900,000.00 4,900,000.00
    EINTITY C
    DECEMBER 31, 20X1
    ADJUSTING ENTRIES

    DEBIT
    1 DEC. 31, 20X1 DEPRECIATION EXPENSE 80,000.00
    ACCUMULATED DEPRECIATION-Office Equipment
    To record depreciation for the year

    2 RENT EXPENSE 360,000.00


    PREPAID RENT
    To record rent expense for the year 20x1.
    CREDIT COMPUTATION

    80,000.00 COST OF OFFICE EQUIPMENT 800,000.00


    USEFUL LIFE (10 yrs.) ÷ 10.00
    ANNUAL DEPRECIATION 80,000.00

    COMPUTATION
    360,000.00 ADVANCE RENTAL(2 YRS.) 720,000.00
    NO. OF YEARS ÷ 2.00
    ANNUAL RENTAL 360,000.00
    ENTITY C.
    WORKSHEET
    DECEMBER 31, 20X1
    UNADJUSTED TRIAL BALANCE ADJUSTMENTS
    DEBIT CREDIT DEBIT
    CASH 830,000.00
    OFFICE EQUIPMENT 800,000.00
    ACCOUNTS RECEIVABLE 200,000.00
    PREPAID RENT 720,000.00
    C., CAPITAL 2,000,000.00
    SERVICE INCOME 2,900,000.00
    SUPPLIES EXPENSE 190,000.00
    UTILITIES 260,000.00
    SALARIES 1,900,000.00
    TOTAL BALANCES 4,900,000.00 4,900,000.00

    DEPRECIATION EXPENSE AJE-1 80,000.00


    ACCUMULATED DEPRECIATION
    RENT EXPENSE AJE-2 360,000.00
    440,000.00
    ADJUSTMENTS ADJUSTED TRIAL BALANCE POST CLOSING TRIAL BALANCE
    CREDIT DEBIT CREDIT DEBIT CREDIT
    830,000.00 830,000.00
    800,000.00 800,000.00
    200,000.00 200,000.00
    360,000.00 AJE-2 360,000.00 360,000.00
    2,000,000.00 2,110,000.00
    2,900,000.00
    190,000.00
    260,000.00
    1,900,000.00

    80,000.00
    80,000.00 AJE 1 80,000.00 80,000.00
    360,000.00
    440,000.00 4,980,000.00 4,980,000.00 2,190,000.00 2,190,000.00
    EINTITY C
    CLOSING ENTRIES
    DECEMBER 31, 20X1
    DEBIT CREDIT
    1 DECEMBER 31, 20X1 SERVICE INCOME 2,900,000.00
    SUPPLIES EXPENSE 190,000.00
    UTILITIES 260,000.00
    SALARIES 1,900,000.00
    DEPRECIATION EXPENSE 80,000.00
    RENT EXPENSE 360,000.00
    INCOME & EXPENSE SUMMARY 110,000.00
    To close nominal accounts to income & expense summary

    2 DECEMBER 31, 20X1 INCOME & EXPENSE SUMMARY 110,000.00


    C., CAPITAL 110,000.00
    To close income & expense summary TO C., Capital.
    ENTITY C.
    BALANCE SHEET
    AS OF DECEMBER 31, 20X1

    ASSETS
    Cash ₱ 830,000.00
    Accounts Receivable 200,000.00
    Prepaid Rent 360,000.00
    OfficeEquipment ₱ 800,000.00
    Less: Accumulated Depreciation 80,000.00 720,000.00
    Total Assets ₱ 2,110,000.00

    LIABILITIES & OWNER'S EQUITY

    Total Liablities ₱ 0.00

    C., Capital, January 1, 20x1 ₱ 2,000,000.00


    Add: Net Income 110,000.00
    C., Capital, December 31, 20x1 ₱ 2,110,000.00

    Total Liabilities & Owner's Equity ₱ 2,110,000.00


    ENTITY c.
    INCOME STATEMENT
    DECEMBER 31, 20X1

    Service Income ₱ 2,900,000.00


    Less: Operating Expenses
    Depreciation ₱ 80,000.00
    Rent Expense 360,000.00
    Supplies Expenes 190,000.00
    Salaries 1,900,000.00
    Utilities 260,000.00 2,790,000.00

    Net Income ₱ 110,000.00

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