JS Company started operations on January 1, 2019. A summary of the transactions during the year is provided below: 1. The owner Johanes Simons invested ₱2,000,000 to the business. 2. Acquired equipment for ₱1,000,000 cash. 3. Obtained a 12%, one-year, bank loan of ₱500,000. 4. Paid one-year insurance amounting to ₱160,000 on September 30, 2019. JS Company uses the “asset method” in recording prepayments. 5. Service fees earned amounted to ₱6,000,000, one-third of which was on cash basis. 6. Collected ₱1,800,000 accounts receivable. 7. The company paid salaries expense paid amounted to ₱1,200,000. 8. Total utilities expense paid amounted ₱500,000. 9. Supplies purchased on cash basis amounted to ₱120,000. 10. The owner Johanes Simons withdrew Cash amounted to ₱1,400,000. a.Provide the journal entries for the transactions, using the following Account Titles: Cash Service fees Accounts receivable Salaries expense Prepaid insurance Utilities expense Prepaid supplies Supplies Expense Equipment Depreciation Expense Accumulated Depreciation Insurance Expense Notes payable Interest Expense J. Simons, Capital Interest Payable J. Simons, Drawings Income Summary b.Prepare the adjusting entries (see additional information below). Information for adjusting entries: i. The equipment was acquired on January 1, 2019 and was estimated to have a useful life of 10 years. ii. The loan was obtained on July 1, 2019. Principal and interest are due at maturity date. iii. The one-year insurance covers the period October 1, 2019 to September 30, 2020. iv. Unused supplies at the end of the year amounted to ₱40,000. c.Complete the worksheet.
JS Company started operations on January 1, 2019. A summary of the transactions during the year is provided below:
1. The owner Johanes Simons invested ₱2,000,000 to the business.
2. Acquired equipment for ₱1,000,000 cash.
3. Obtained a 12%, one-year, bank loan of ₱500,000.
4. Paid one-year insurance amounting to ₱160,000 on September 30, 2019. JS Company uses the “asset method” in recording prepayments.
5. Service fees earned amounted to ₱6,000,000, one-third of which was on cash basis.
6. Collected ₱1,800,000
7. The company paid salaries expense paid amounted to ₱1,200,000.
8. Total utilities expense paid amounted ₱500,000.
9. Supplies purchased on cash basis amounted to ₱120,000.
10. The owner Johanes Simons withdrew Cash amounted to ₱1,400,000.
a.Provide the
Cash Service fees
Accounts receivable Salaries expense
Prepaid insurance Utilities expense
Prepaid supplies Supplies Expense
Equipment
Notes payable Interest Expense
J. Simons, Capital Interest Payable
J. Simons, Drawings Income Summary
b.Prepare the
Information for adjusting entries:
i. The equipment was acquired on January 1, 2019 and was estimated to have a useful life of 10 years.
ii. The loan was obtained on July 1, 2019. Principal and interest are due at maturity date.
iii. The one-year insurance covers the period October 1, 2019 to September 30, 2020.
iv. Unused supplies at the end of the year amounted to ₱40,000.
c.Complete the worksheet.
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