APPLICATION PROBLEM

Journalizing to Financial Statement Preparation

Transactions for the month of December 2015 are as follows:

Rey Millora opened an account with Union Bank under Rey's Laundromat business name in the amount of
1-Dec P1,500,000. He also invested a computer worth P100,000 with a fair market value of P90,000.

2 Paid municipal taxes of P5,500 including his license to operate.

Bought a P900,000 condominium for his office paying P500,000 down payment and signing a mortgage with
5 Metro Bank payable in 10 years for the balance.

7 Bought furniture on credit from Furniture World, P45,000.

8 Returned P7,000 worth of furniture bought due to wrong specifications.

9 Bought cash register P24,000 paid in cash.

10 Paid furniture and fixtures purchased on account.

11 Bought P5,600 office supplies paid in cash.

Bought a P600,000 van from Jade Motors for use in the business. Terms: 25% cash, 40% thru a 30-day, 10% note,
12 and the balance on account.

Made an additional investment of P500,000 and equipment worth P60,000 with an unpaid balance of P10,000 to
13 Baguio Trading. The business will assume the liability.

14 Returned damaged supplies worth P880.

15 Withdrew P75,000 cash and office supplies worth P500 for personal use.

16 Paid the salary of the office secretary, P7,600.

17 Paid utilities, P1,200.

18 Collected laundry services from various customers, P200,000.

Rendered laundry services on account to the following customers: Gabriel - P20,000; Michael - P10,000; Daniel -
19 P8,000; Uriel - P7,000.

20 Paid repairs, P2,000.

 Collected from laundry services rendered last December 19 from the following customers: Gabriel - P5,000;
30 Michael - P10,000; Daniel - P15,000; Uriel - P4,000.

The company's Chart of Accounts follow:

Account Code Account Title
101 Cash
102 Accounts Receivable
102a Allowance for Bad Debts
103 Office Supplies

201 Office Condominium

201a Accumulated Depreciation - Office Condominium
202 Equipment
202a Accumulated Depreciation - Equipment
203 Furniture and Fixtures
203a Accumulated Depreciation - Furniture and Fixtures
204 Vehicle
204a Accumulated Depreciation - Vehicle

301 Accounts Payable

302 Notes Payable
303 Interest Payable
304 Salaries Payable
305 Mortgage Payable

401 Millora, Capital

402 Millora, Personal

501 Laundry Service Income

601 Bad Debts Expense

602 Depreciation Expense
603 Taxes and Licenses
604 Salaries Expense
605 Utilities Expense
606 Repairs and Maintenance
607 Supplies Expense
608 Interest Expense

Requirements:
1 Journalize the December transactions using a general journal and the
account titles given in the chart of accounts.

2 Post the journal entries to the General Ledger.

3 Extract the balances of each account in the General Ledger and
prepare a trial balance.

4 From the trial balance, prepare the following:

a. Statement of income
b. Statement of changes in equity
c. Statement of financial position
the amount of
00.

a mortgage with

u a 30-day, 10% note,

balance of P10,000 to

el - P10,000; Daniel -
abriel - P5,000;
 General Journal Page 1

Date Particulars f Dr Cr

General Journal Page 2

Date Particulars f Dr Cr
 General Journal Page 3

Date Particulars f Dr Cr
 General Journal Page 4

Date Particulars f Dr Cr
 GENERAL LEDGER

CASH 101
Date Particulars f Dr Date Particulars f Cr

ACCOUNTS RECEIVABLE 102

Date Particulars f Dr Date Particulars f Cr

ALLOWANCE FOR BAD DEBTS 102a

Date Particulars f Dr Date Particulars f Cr

OFFICE SUPPLIES 103

Date Particulars f Dr Date Particulars f Cr
 OFFICE CONDOMINIUM 201
Date Particulars f Dr Date Particulars f Cr

ACCUMULATED DEPRECIATION - OFFICE CONDOMINIUM 201a

Date Particulars f Dr Date Particulars f Cr

EQUIPMENT 202
Date Particulars f Dr Date Particulars f Cr

ACCUMULATED DEPRECIATION - EQUIPMENT 202a

Date Particulars f Dr Date Particulars f Cr

FURNITURE AND FIXTURES 203

Date Particulars f Dr Date Particulars f Cr
 ACCUMULATED DEPRECIATION - FURNITURE AND FIXTURES 203a
Date Particulars f Dr Date Particulars f Cr

VEHICLE 204
Date Particulars f Dr Date Particulars f Cr

ACCUMULATED DEPRECIATION - VEHICLE 204a

Date Particulars f Dr Date Particulars f Cr

ACCOUNTS PAYABLE 301

Date Particulars f Dr Date Particulars f Cr

NOTES PAYABLE 302

Date Particulars f Dr Date Particulars f Cr

INTEREST PAYABLE 303

Date Particulars f Dr Date Particulars f Cr

SALARIES PAYABLE 304

Date Particulars f Dr Date Particulars f Cr

MORTGAGE PAYABLE 305

Date Particulars f Dr Date Particulars f Cr

MILLORA, CAPITAL 401

Date Particulars f Dr Date Particulars f Cr
 MILLORA, PERSONAL 402
Date Particulars f Dr Date Particulars f Cr

INCOME AND EXPENSE SUMMARY 403

Date Particulars f Dr Date Particulars f Cr

LAUNDRY SERVICE INCOME 501

Date Particulars f Dr Date Particulars f Cr

BAD DEBTS EXPENSE 501

Date Particulars f Dr Date Particulars f Cr
 DEPRECIATION EXPENSE 602
Date Particulars f Dr Date Particulars f Cr

TAXES AND LICENSES 603

Date Particulars f Dr Date Particulars f Cr

SALARIES EXPENSE 604

Date Particulars f Dr Date Particulars f Cr

UTILITIES EXPENSE 605

Date Particulars f Dr Date Particulars f Cr

REPAIRS AND MAINTENANCE 606

Date Particulars f Dr Date Particulars f Cr
 SUPPLIES EXPENSE 607
Date Particulars f Dr Date Particulars f Cr

INTEREST EXPENSE 608

Date Particulars f Dr Date Particulars f Cr
 SUBSIDIARY LEDGERS

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER OR CUSTOMERS' CARD

CUSTOMER'S NAME:
Date Particulars f Dr Cr Balance

CUSTOMER'S NAME:
Date Particulars f Dr Cr Balance

CUSTOMER'S NAME:
Date Particulars f Dr Cr Balance

CUSTOMER'S NAME:
Date Particulars f Dr Cr Balance

ACCOUNTS PAYABLE SUBSIDIARY LEDGER OR SUPPLIERS' CARD

SUPPLIER'S NAME:
Date Particulars f Dr Cr Balance
SUPPLIER'S NAME:
Date Particulars f Dr Cr Balance

SUPPLIER'S NAME:
Date Particulars f Dr Cr Balance

SUPPLIER'S NAME:
Date Particulars f Dr Cr Balance
Rey's Laundromat
TRIAL BALANCE
DECEMBER 31, 2012
Amounts in Philippine Peso
Dr Cr

Rey's Laundromat
ACCOUNTS RECEIVABLE SCHEDULE
December 31, 2015
Amounts in Philippine Peso

Rey's Laundromat
ACCOUNTS PAYABLE SCHEDULE
December 31, 2015
Amounts in Philippine Peso
Rey's Laundromat
Worksheet
DECEMBER 31, 2012
Amounts in Philippine Peso
Unadjusted Trial Balance Adjustments Adjusted Trial Balance
Dr Cr Dr Cr Dr
 Statement of Financial
Adjusted Trial Balance Statement of Income Position
Cr Dr Cr Dr Cr
Rey's Laundromat
Statement of Income
For the month ended December 31, 2012
Amounts in Philippine Peso

Rey's Laundromat
Statement of Changes in Equity
For the month ended December 31, 2012
Amounts in Philippine Peso

Rey's Laundromat
Statement of Financial Position
December 31, 2012
Amounts in Philippine Peso
 LIABILITIES AND EQUITY

Rey's Laundromat
Statement of Cash Flows
For the month ended December 31, 2012
Amounts in Philippine Peso
Rey's Laundromat
POST-CLOSING TRIAL BALANCE
DECEMBER 31, 2012
Amounts in Philippine Peso
Dr Cr