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Made from Wood is new business founded by Mr. A in July 2022. The business was registered as a sole proprietorship and is starting small by purchasing wood furniture (table, chairs, cabinets) from suppliers and selling them to individual and business customers online or through its furniture shop located in Lipa City, Batangas. *Use Accrual Accounting Base Method Chart of Accounts: ASSETS: Cash and Cash Equivalents Petty Cash Cash on Hand Cash in Bank Accounts Receivable Merchandise Inventory Prepaid Expenses Supplies Fixed Assets Leasehold Improvements Accumulated Depreciation – Leasehold Improvements Transportation and Other Equipment Accumulated Depreciation – Transportation and Other Equipment Other Assets LIABILITIES: Accounts Payable Accrued Expenses and Other Liabilities Income Tax Payable EQUITY: Owner’s Capital Retained Earnings INCOME STATEMENT: Income: Sales Sales Discount Sales Returns and Allowances Cost of Sales: Cost of Sales Expenses: Salary Expenses Rent Expenses Professional Fees Transportation Expenses Depreciation Expenses – Leasehold Improvements Depreciation Expenses – Transportation and Other Equipment Insurance Expenses Supplies Expenses Utility Expenses Miscellaneous Expenses Income Tax Income Tax Expense REQUIRED: • JOURNAL ENTRIES

Made from Wood is new business founded by Mr. A in July 2022. The business was registered as a sole proprietorship and is starting small by purchasing wood furniture (table, chairs, cabinets) from suppliers and selling them to individual and business customers online or through its furniture shop located in Lipa City, Batangas. *Use Accrual Accounting Base Method Chart of Accounts: ASSETS: Cash and Cash Equivalents Petty Cash Cash on Hand Cash in Bank Accounts Receivable Merchandise Inventory Prepaid Expenses Supplies Fixed Assets Leasehold Improvements Accumulated Depreciation – Leasehold Improvements Transportation and Other Equipment Accumulated Depreciation – Transportation and Other Equipment Other Assets LIABILITIES: Accounts Payable Accrued Expenses and Other Liabilities Income Tax Payable EQUITY: Owner’s Capital Retained Earnings INCOME STATEMENT: Income: Sales Sales Discount Sales Returns and Allowances Cost of Sales: Cost of Sales Expenses: Salary Expenses Rent Expenses Professional Fees Transportation Expenses Depreciation Expenses – Leasehold Improvements Depreciation Expenses – Transportation and Other Equipment Insurance Expenses Supplies Expenses Utility Expenses Miscellaneous Expenses Income Tax Income Tax Expense REQUIRED: • JOURNAL ENTRIES

Quickbooks Online Accounting
Quickbooks Online Accounting
3rd Edition
ISBN:9780357391693
Author:Owen
Publisher:Owen
Chapter4: Operating Activities: Sales And Cash Receipts
Section: Chapter Questions
Problem 4.12C
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Made from Wood is new business founded by Mr. A in July 2022. The business was registered as a sole proprietorship and is starting small by purchasing wood furniture (table, chairs, cabinets) from suppliers and selling them to individual and business customers online or through its furniture shop located in Lipa City, Batangas. *Use Accrual Accounting Base Method Chart of Accounts: ASSETS: Cash and Cash Equivalents Petty Cash Cash on Hand Cash in Bank Accounts Receivable Merchandise Inventory Prepaid Expenses Supplies Fixed Assets Leasehold Improvements Accumulated Depreciation – Leasehold Improvements Transportation and Other Equipment Accumulated Depreciation – Transportation and Other Equipment Other Assets LIABILITIES: Accounts Payable Accrued Expenses and Other Liabilities Income Tax Payable EQUITY: Owner’s Capital Retained Earnings INCOME STATEMENT: Income: Sales Sales Discount Sales Returns and Allowances Cost of Sales: Cost of Sales Expenses: Salary Expenses Rent Expenses Professional Fees Transportation Expenses Depreciation Expenses – Leasehold Improvements Depreciation Expenses – Transportation and Other Equipment Insurance Expenses Supplies Expenses Utility Expenses Miscellaneous Expenses Income Tax Income Tax Expense REQUIRED: • JOURNAL ENTRIES
Transactions July 2022 1. On July 1, 2022, Mr. A invested Php 3 million. The amount was deposited in Made from Wood's checking account in Philippine Bank - Lipa Branch. On top of that Php 3 million, he also invested Php 50,000 for petty cash fund. 2. On July 2, 2022, Mr. A paid Php 3,500 from the petty cash fund for the registration andlicensing fees. Also, on the same date, he signed a rental contract with Green Propertygood for one year and issued check for Php 60,000 for one-month advance and two-month security deposit (to be recognized under Other assets). The rented property willbe used as the furniture showroom and will accept walk-in clients. 3. On July 3, 2022, Mr. A signed a contract with DT Construction to renovate the rented property. The renovation includes customization of lighting fixtures, change of flooring and painting (to be recognized as Leasehold improvements). Payment of Php 100,000will be made once the renovation is completed within two weeks. 4. On July 5, 2022, Mr. A withdrew Php 1 million and bought Isuzu Javiz to be used asdelivery truck. It was delivered the same day. 5. On July 18, 2022, the renovation of the rented furniture showroom is completed and Mr.A issued check for Php100,000 to DT Construction. 6. On July 20, 2022, supplier Wood Works Furniture with office located in Brgy Barangkallaya. Mandaluyong City delivered the furniture listed below (with Made from Wood's selling price details as well). Mr. A issued check to Wood Works Furniture for full payment. Delivery fee was shouldered by Wood Works Furniture. Stock Code D001 D002 0001 0002 W001 W002 Stock Code Description L001 L002 C001 C002 B001 B002 Scandi Barnes 4-seater dining set Scandi, Barnes 6-seater dining set Otis Outdoor 4-seater set table Berare Outdoor Brown Bench Marla Brown Office Desk Sara Oak Office Desk Description Olympia Wooden Sofa Set Malta Wooden Sofa Set Zico Coffee Table Number of Units 7. On July 22, 2022, another supplier Furniture Shop Philippines with office located in Brgy 62, Pasay City delivered the furniture listed below (with Made from Wood's selling price details as well). Payment terms is n/30. Delivery fee was shouldered by Furniture Shop Philippines. Tammy Coffee Table Harry Bookcase with Glass Door Rose Cube Bookcase 3 3 3 5 Number of Units Purchase Price per Unit P10,000.00 P12,000.00 P 6,000.00 P 5,000.00 P 4,000,00 P 3,000.00 3 3 3 Selling Price per Unit P13,000.00 P16,000.00 P 8,000.00 P 6,500.00 P 5,500.00 P 4,000,00 Purchase Price per Unit P17,500.00 P19,000.00 P 2,300.00 P 4,200.00 P 5,900.00 P 4,100.00 Selling Price per Unit P22,000.00 P24,000.00 P 2,900.00 P 4,900.00 P 6,900.00 P 4,600.00
Transcribed Image Text:Transactions July 2022 1. On July 1, 2022, Mr. A invested Php 3 million. The amount was deposited in Made from Wood's checking account in Philippine Bank - Lipa Branch. On top of that Php 3 million, he also invested Php 50,000 for petty cash fund. 2. On July 2, 2022, Mr. A paid Php 3,500 from the petty cash fund for the registration andlicensing fees. Also, on the same date, he signed a rental contract with Green Propertygood for one year and issued check for Php 60,000 for one-month advance and two-month security deposit (to be recognized under Other assets). The rented property willbe used as the furniture showroom and will accept walk-in clients. 3. On July 3, 2022, Mr. A signed a contract with DT Construction to renovate the rented property. The renovation includes customization of lighting fixtures, change of flooring and painting (to be recognized as Leasehold improvements). Payment of Php 100,000will be made once the renovation is completed within two weeks. 4. On July 5, 2022, Mr. A withdrew Php 1 million and bought Isuzu Javiz to be used asdelivery truck. It was delivered the same day. 5. On July 18, 2022, the renovation of the rented furniture showroom is completed and Mr.A issued check for Php100,000 to DT Construction. 6. On July 20, 2022, supplier Wood Works Furniture with office located in Brgy Barangkallaya. Mandaluyong City delivered the furniture listed below (with Made from Wood's selling price details as well). Mr. A issued check to Wood Works Furniture for full payment. Delivery fee was shouldered by Wood Works Furniture. Stock Code D001 D002 0001 0002 W001 W002 Stock Code Description L001 L002 C001 C002 B001 B002 Scandi Barnes 4-seater dining set Scandi, Barnes 6-seater dining set Otis Outdoor 4-seater set table Berare Outdoor Brown Bench Marla Brown Office Desk Sara Oak Office Desk Description Olympia Wooden Sofa Set Malta Wooden Sofa Set Zico Coffee Table Number of Units 7. On July 22, 2022, another supplier Furniture Shop Philippines with office located in Brgy 62, Pasay City delivered the furniture listed below (with Made from Wood's selling price details as well). Payment terms is n/30. Delivery fee was shouldered by Furniture Shop Philippines. Tammy Coffee Table Harry Bookcase with Glass Door Rose Cube Bookcase 3 3 3 5 Number of Units Purchase Price per Unit P10,000.00 P12,000.00 P 6,000.00 P 5,000.00 P 4,000,00 P 3,000.00 3 3 3 Selling Price per Unit P13,000.00 P16,000.00 P 8,000.00 P 6,500.00 P 5,500.00 P 4,000,00 Purchase Price per Unit P17,500.00 P19,000.00 P 2,300.00 P 4,200.00 P 5,900.00 P 4,100.00 Selling Price per Unit P22,000.00 P24,000.00 P 2,900.00 P 4,900.00 P 6,900.00 P 4,600.00
8. On July 26, 2022, Made from Wood opened its furniture showroom. Php 2,800 was spent from the petty cash fund on food and other expenses to celebrate the opening day.It also marked the first day of two employees hired by Mr. A- Employee 1 and Employee 2. The employees' daily wage is Php 500 each, payable every 15th and 30th of the month. 9. Also on July 26, 2022, Mr. A issued check for P30,000 for Made from Wood's perlife insurance for one year. 10. On July 27, 2022, the following orders (including those placed on July 26) were deliveredand paid in cash: Customer Name Anna Ocampo Kris Lingar Marie Delos Santos Customer Name ● 11. On July 28, 2022, the following orders were received. No delivery was made. Delivery Address Ricky De Castro Jess Andres Delivery Address No. 11, Bay San Jose, Lipa City No. 18, Brak nosluban, Lipa City Bk 2 Lot 11, Beverly Hills Subdivision. Bray, Kayumanggi, Lipa City Customer Name Z Company No. 64, Brax Luta Norte, Malvar, Batangas Bk 4 Lot 8, Lipa Heights Subdivision, Bray, Tambo, Lipa City Stock Code L001 0001 W002 Delivery Address Stock Code W002 B002 D001 12. On July 29, 2022, deliveries were completed for orders received on July 28. All orderswere cash on delivery. Mataas na Lupa, Lipa City 13. On July 30, the following were delivered to a corporate customer. The order is payablewithin 30 days: No. of Units Sold 2 Stock Code W001 B001 No. of Units Sold 1 1 No. of Units Sold 5 2 14. Also on July 30, the cash on hand were deposited to Made from Wood's account in Philippine Bank. 15. The following are month-end adjustments to be booked on July 30: Petty cash fund balance is P25,000, P3,000 is spent on the delivery truck's transportation costs (gasoline and toll). The rest is spent on office supplies, aboutP12,000 of which is still unused. The petty cash fund was not replenished. One-month depreciation expense is recognized on both the leasehold improvement (estimated useful life is 3 years) and on transportation equipment (estimated useful life is5 years). No insurance expense is recognized yet. Employees' salaries are accrued and to be paid on August 15th.
Transcribed Image Text:8. On July 26, 2022, Made from Wood opened its furniture showroom. Php 2,800 was spent from the petty cash fund on food and other expenses to celebrate the opening day.It also marked the first day of two employees hired by Mr. A- Employee 1 and Employee 2. The employees' daily wage is Php 500 each, payable every 15th and 30th of the month. 9. Also on July 26, 2022, Mr. A issued check for P30,000 for Made from Wood's perlife insurance for one year. 10. On July 27, 2022, the following orders (including those placed on July 26) were deliveredand paid in cash: Customer Name Anna Ocampo Kris Lingar Marie Delos Santos Customer Name ● 11. On July 28, 2022, the following orders were received. No delivery was made. Delivery Address Ricky De Castro Jess Andres Delivery Address No. 11, Bay San Jose, Lipa City No. 18, Brak nosluban, Lipa City Bk 2 Lot 11, Beverly Hills Subdivision. Bray, Kayumanggi, Lipa City Customer Name Z Company No. 64, Brax Luta Norte, Malvar, Batangas Bk 4 Lot 8, Lipa Heights Subdivision, Bray, Tambo, Lipa City Stock Code L001 0001 W002 Delivery Address Stock Code W002 B002 D001 12. On July 29, 2022, deliveries were completed for orders received on July 28. All orderswere cash on delivery. Mataas na Lupa, Lipa City 13. On July 30, the following were delivered to a corporate customer. The order is payablewithin 30 days: No. of Units Sold 2 Stock Code W001 B001 No. of Units Sold 1 1 No. of Units Sold 5 2 14. Also on July 30, the cash on hand were deposited to Made from Wood's account in Philippine Bank. 15. The following are month-end adjustments to be booked on July 30: Petty cash fund balance is P25,000, P3,000 is spent on the delivery truck's transportation costs (gasoline and toll). The rest is spent on office supplies, aboutP12,000 of which is still unused. The petty cash fund was not replenished. One-month depreciation expense is recognized on both the leasehold improvement (estimated useful life is 3 years) and on transportation equipment (estimated useful life is5 years). No insurance expense is recognized yet. Employees' salaries are accrued and to be paid on August 15th.
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