Entity A started operations on November 1, 20x1. The following were the transactions during the period: Nov. Transactions 1 Provided ₱100,000 cash as initial investment to the business. 1 Acquired equipment for ₱72,000 cash. The equipment has a useful life of 4 years. Entity A records depreciation expense only at year-end. 1 Paid a one-year insurance premium of ₱24,000. (Use ‘asset method’) 12 Purchased inventory costing ₱30,000 for cash. (Use periodic inventory system) 14 Sold goods for ₱30,000 cash. Dec. Transactions 1 Sold goods with sale price of ₱24,000 in exchange for a ₱24,000, 10%, one-year note receivable. Principal and interest are due at maturity. 5 Purchased inventory for ₱4,000 on account. 26 Sold goods for ₱34,000 on account. 27 Paid ₱2,000 account payable. 29 Collected ₱20,000 account receivable. Additional information: There is no beginning inventory. The ending inventory per physical count is ₱21,000. Entity A determines at year-end that accounts receivable of ₱2,000 is doubtful of collection. Salaries earned by employees during the period but were not yet paid amounted to ₱20,000. Requirements: Provide the journal entries for the transactions. Post the entries to the ledger using T-accounts. Prepare the unadjusted trial balance using a worksheet.
Entity A started operations on November 1, 20x1. The following were the transactions during the period:
Nov. |
Transactions |
1 |
Provided ₱100,000 cash as initial investment to the business. |
1 |
Acquired equipment for ₱72,000 cash. The equipment has a useful life of 4 years. Entity A records |
1 |
Paid a one-year insurance premium of ₱24,000. (Use ‘asset method’) |
12 |
Purchased inventory costing ₱30,000 for cash. (Use periodic inventory system) |
14 |
Sold goods for ₱30,000 cash. |
|
|
Dec. |
Transactions |
1 |
Sold goods with sale price of ₱24,000 in exchange for a ₱24,000, 10%, one-year note receivable. Principal and interest are due at maturity. |
5 |
Purchased inventory for ₱4,000 on account. |
26 |
Sold goods for ₱34,000 on account. |
27 |
Paid ₱2,000 account payable. |
29 |
Collected ₱20,000 account receivable. |
Additional information:
- There is no beginning inventory. The ending inventory per physical count is ₱21,000.
- Entity A determines at year-end that
accounts receivable of ₱2,000 is doubtful of collection. - Salaries earned by employees during the period but were not yet paid amounted to ₱20,000.
Requirements:
- Provide the
journal entries for the transactions. Post the entries to the ledger using T-accounts.- Prepare the unadjusted
trial balance using a worksheet. - Prepare the
adjusting entries . - Complete the worksheet.
- Prepare the closing entries.
- Prepare the balance sheet and income statement.
- Prepare the reversing entries to be recorded in the next accounting period
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