JOURNALIZING

….

Date ACCOUNT DEBIT CREDIT

1 Cash P 2 0 0 0 0 0
A, Capital P 2 0 0 0 0 0
Owner's Investment

Oct 1 Cash 3 0 0 0 0 0
Notes Payable 3 0 0 0 0 0
Loans Obtained

Nov 1 Equipment 3 6 0 0 0 0
Cash 3 6 0 0 0 0
Purchase of equipment

4 Prepaid Supplies 8 0 0 0 0
Cash 8 0 0 0 0
Purchase of supplies

5 Cash 1 8 0 0 0 0
Service Fees 1 8 0 0 0 0
Services Rendered

6 Accounts Receivable 4 2 0 0 0 0
Service Fees 4 2 0 0 0 0
Services Rendered On Account

7 Cash 3 7 0 0 0 0
Accounts Receivable 3 7 0 0 0 0
Collection of Accounts

8 Utilities Expense 1 6 0 0 0
Cash 1 6 0 0 0
Payment of Utilities

9 Salaries Expense 1 4 0 0 0 0
Cash 1 4 0 0 0 0
Payment of salaries

10 A, Drawing 1 0 0 0 0 0
Cash 1 0 0 0 0 0
Owner's Withdrawal

ADJUSTING ENTRIES:
`
Dec 31 Bad Debt Expense 3 0 0 0
Allowance for Bad Debts 3 0 0 0
AJE for Bad Debts

Computation: 6% x P 50,000 = P 3,000

Dec 31 Depreciation Expense 1 2 0 0 0

Accumulated Depreciation 1 2 0 0 0
AJE for Depreciation

Computation:
= P 360,000 / 5 years = 72,000 per year or P 6,000 per month
= P 6,000 x 2 months = P 12,000
Dec 31 Interest Expense 9 0 0 0
Dec 31 Interest Expense 9 0 0 0
Interest Payable 9 0 0 0

Computation:
= P 300,000 x 12% x 3/12 = P 9,000

Dec 31 Supplies Expense 7 5 0 0 0

Prepaid Supplies 7 5 0 0 0
AJE for Supplies Expense

CLOSING ENTRIES:

Dec 31 Service Fees 6 0 0 0 0 0

Salaries Expense 1 4 0 0 0 0
Utilities Expense 1 6 0 0 0
Bad Debt Expense 3 0 0 0
Depreciation Expense 1 2 0 0 0
interest Expense 9 0 0 0
Supplies Expense 7 5 0 0 0
Income Summary 3 4 5 0 0 0

Dec 31 Income Summary 3 4 5 0 0 0

A, Capital 3 4 5 0 0 0

Dec 31 A, Capital 1 0 0 0 0 0
A, Drawing 1 0 0 0 0 0
 2002

REVERSING ENTRIES:
Jan 1 Interest Payable 9 0 0 0
Dec 31 Interest Expense 9 0 0 0

Dec 31

Dec 31

Dec 31 Service Fees 2 0 0 0 0 0

Income Summary 5 5 0 0 0
Salaries Expense 1 4 0 0 0 0
Utilities Expense 1 6 0 0 0
Bad Debt Expense 3 0 0 0
Depreciation Expense 1 2 0 0 0
interest Expense 9 0 0 0
Supplies Expense 7 5 0 0 0

Dec 31 A, Capital 5 5 0 0 0
Income Suammry 5 5 0 0 0

Dec 31 A, Capital 1 0 0 0 0 0
A, Drawing 1 0 0 0 0 0
 POSTING TO THE LEDGER

CASH
CREDIT Date DESCRIPTION DEBIT CREDIT
1 Ower's Investment 2 0 0 0 0 0
Oct 1 Loans Obtained 3 0 0 0 0 0
Nov1 Equipment Purchased 3
4 Purchase of supplies
5 Services rendered 1 8 0 0 0 0
7 Collection of accounts 3 7 0 0 0 0
8 Payment of utilities
9 Payment of salaries 1
10 Owner's Drawing 1

ACCOUNTS RECEIVABLE
Date DESCRIPTION DEBIT CREDIT
6 Services rendered on account 4 2 0 0 0 0
7 Collection of accounts 3

PREPAID SUPPLIES
Date DESCRIPTION DEBIT CREDIT
4 Purchase of supplies 8 0 0 0 0

EQUIPMENT
Date DESCRIPTION DEBIT CREDIT
Nov 1 Equipment Purchased 3 6 0 0 0 0

NOTES PAYABLE
Date DESCRIPTION DEBIT CREDIT
Oct 1 Loans Obtained 3

A, CAPITAL
Date DESCRIPTION DEBIT CREDIT
1 Ower's Investment 2
 A, DRAWING
Date DESCRIPTION DEBIT CREDIT
10 Owner's Drawing 1 0 0 0 0 0

SERVICE FEES
Date DESCRIPTION DEBIT CREDIT
5 Services rendered 1
6 Services rendered on account 4

SALARIES EXPENSE
Date DESCRIPTION DEBIT CREDIT
9 Payment of salaries 1 4 0 0 0 0

SUPPLIES EXPENSE
Date DESCRIPTION DEBIT CREDIT

UTILITIES EXPENSE
Date DESCRIPTION DEBIT CREDIT
8 Payment of utilities 1 6 0 0 0
DGER

CREDIT BALANCE
2 0 0 0 0 0
5 0 0 0 0 0
6 0 0 0 0 1 4 0 0 0 0
8 0 0 0 0 6 0 0 0 0 Unadjusted Trial Balance
2 4 0 0 0 0 Debit
6 1 0 0 0 0 Accounts
1 6 0 0 0 5 9 4 0 0 0 Cash 354,000.00
4 0 0 0 0 4 5 4 0 0 0 Accounts Receivable 50,000.00
0 0 0 0 0 3 5 4 0 0 0 Prepaid Supplies 80,000.00
Equipment 360,000.00
Notes Payable
A, Capital
CREDIT BALANCE A, Drawing 100,000.00
4 2 0 0 0 0 Service Fees
7 0 0 0 0 5 0 0 0 0 Salaries Expense 140,000.00
Utilities Expense 16,000.00
TOTAL 1,100,000.00
Adjustments:
CREDIT BALANCE Bad Debt Expense
8 0 0 0 0 Allowance for Bad Debts
Depreciation Expense
Accumulated Depreciation
Interest Expense
Interest Payable
CREDIT BALANCE Supplies Expense
3 6 0 0 0 0

CREDIT BALANCE
0 0 0 0 0 3 0 0 0 0 0

CREDIT BALANCE
0 0 0 0 0 2 0 0 0 0 0
 CREDIT BALANCE
1 0 0 0 0 0

CREDIT BALANCE
8 0 0 0 0 1 8 0 0 0 0
2 0 0 0 0 6 0 0 0 0 0

CREDIT BALANCE
1 4 0 0 0 0

CREDIT BALANCE

CREDIT BALANCE
1 6 0 0 0
 ENTITY A
WORKSHEET
December 31, 2001

temporary or nominal accounts

adjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement

Credit Debit Credit Debit Credit Debit

354,000.00
50,000.00
75,000.00 5,000.00
360,000.00
300,000.00 300,000.00
200,000.00 200,000.00
100,000.00
600,000.00 600,000.00
140,000.00 140,000.00
16,000.00 16,000.00
1,100,000.00

3,000.00 3,000.00 3,000.00

3,000.00 3,000.00
12,000.00 12,000.00 12,000.00
12,000.00 12,000.00
9,000.00 9,000.00 9,000.00
9,000.00 9,000.00
75,000.00 75,000.00 75,000.00
99,000.00 99,000.00 1,124,000.00 1,124,000.00 255,000.00
345,000.00

if profit: Service Fees 40.00

Expenses 30.00
Income Summary 10.00

Income Summary 10.00

Capital 10.00
if loss: Service Fees 60.00
Income Summary 15.00
Expenses 75.00

A, Capital 15.00
Income Summary 15.00

if breakeven (no profit/loss) Service Fees 25.00

Expense 25.00

2001 Dec 31, 2001 Adjusting

Interest Expense 9,000.00
Interest Payablle 9,000.00

Computation:
= P 300,000 x 12% x 3/12 = P 9,000

2002 WITH REVERSING ENTRIES

Jan 1, 2002 Reversing

Interest Payable 9,000.00
Interest Expense 9,000.00

Sep 30, 2002 Interest Expense 36,000.00

Cash 36,000.00

Interest Expense
36,000.00 9,000.00

27,000.00
2001 Dec 31, 2001 Adjusting
Prepaid Supplies 5,000.00
Supplies Expense 5,000.00

asset method

2002 Jan 1, 2002 Prepaid Supplies 75,000.00

Supplies Expense 75,000.00

Dec 31, 2002 Supplies Expense 5,000.00

Prepaid Supplies 5,000.00

PS SE
5,000.00 5,000.00 5000
75,000.00
70,000.00
T
001

porary or nominal accounts permanent or real accounts

Income Statement Balance Sheet Closing Entries Post-Closing Trial Balance

Credit Debit Credit Debit Credit Debit

354,000.00 354,000.00
50,000.00 50,000.00
5,000.00 5,000.00
360,000.00 360,000.00
300,000.00
200,000.00 100,000.00 345,000.00
100,000.00 100,000.00
600,000.00 600,000.00
140,000.00
16,000.00

3,000.00
3,000.00
12,000.00
12,000.00
9,000.00
9,000.00
75,000.00
600,000.00 869,000.00 524,000.00 700,000.00 700,000.00 769,000.00
345,000.00
PROFIT

Closing Entries:
SF 60
exp 75
loss 15
 10 10

WITH NO REVERSING ENTRIES

January 1, 2002 NO REVERSING ENTRY

Sep 30, 2002 Interest Payable 9,000.00

Cash 9,000.00

Sep 30, 2002 Interest Expense 27,000.00

Cash 27,000.00

Interest Expense
27,000.00

27,000.00
 expense method

2002 January 1, 2002 Supplies Exp

Prep Supplies

PS
75000 5,000.00 5,000.00
75,000.00
70,000.00
 FINANCIAL STATEMENTS:

ENTITY A
st-Closing Trial Balance INCOME STATEMENT
Credit FOR THE PERIOD ENDED DECEMBER 31, 2001

INCOME
Service Fees P 600,000.00

EXPENSES
300,000.00 Salaries Expense (140,000.00)
445,000.00 Utilities Expense (16,000.00)
Bad Debt Expense (3,000.00)
Depreciation Expense (12,000.00)
Interest Expense (9,000.00)
Supplies Expense (75,000.00)
TOTAL EXPENSES (255,000.00)

PROFIT P 345,000.00
3,000.00

12,000.00

9,000.00 x

769,000.00
5,000.00
5,000.00

SE
5000 75000
 ENTITY A
STATEMENT OF CHANGES IN OWNER'S EQUITY BAL
AS OF DECEMBER 31, 2001 AS OF DE

ASSETS
Capital, January 1 P 200,000.00 Cash
add: Profit 345,000.00 Accounts Receivable
less: Drawings (100,000.00) less: Allowance for Bad De
Capital, December 31 P 445,000.00 Prepaid Supplies
Equipment
less: Accumulated Deprec
TOTAL ASSETS

Beginning Capital on January 1, 2002 LIABILITIES

Notes Payable
Interest Payable
TOTAL LIABILITIES

EQUITY
A, Capital
TOTAL EQUITY

TOTAL LIABILITIES AND

 ENTITY A
BALANCE SHEET
AS OF DECEMBER 31, 2001

P 354,000.00
unts Receivable 50,000.00
Allowance for Bad Debts (3,000.00)
aid Supplies 5,000.00
360,000.00
Accumulated Depreciation (12,000.00)
AL ASSETS 754,000.00

300,000.00
est Payable 9,000.00
AL LIABILITIES 309,000.00

445,000.00
AL EQUITY 445,000.00

AL LIABILITIES AND EQU P 754,000.00

 JOURNALIZING
….

Date ACCOUNT DEBIT CREDIT

1 Cash P 3 2 0 0 0 0
B, Capital P 3 2 0 0 0 0
` Owner's Investment

Dec 1 Cash 2 0 0 0 0 0
Notes Payable 2 0 0 0 0 0
Loans Obtained

Dec 1 Equipment 2 4 0 0 0 0
Cash 2 4 0 0 0 0
Purchase of equipment

4 Prepaid rent 1 0 8 0 0 0
Cash 1 0 8 0 0 0
Prepayment for rent

5 Cash 2 6 0 0 0 0
Service Fees 2 6 0 0 0 0
Services Rendered

6 Utilitiies Expense 1 5 0 0 0
Cash 1 5 0 0 0
Payment of utlities

7 B, Drawing 5 0 0 0 0
Cash 5 0 0 0 0
Cash withdrawal

ADJUSTING ENTRIES:

Dec 31 Depreciation Expense 5 0 0 0

Accumulated Depreciation 5 0 0 0
AJE for Depreciation

Computation:
= P 240,000 / 4 years = P 60,000 per year or P 5,000 per month
= P 5,000 x 1 month = P5,000 (depreciation from Dec 1 to Dec 31)

Dec 31 Salaries Expense 8 0 0 0

Salaries Payable 8 0 0 0
` Unpaid salaries

Dec 31 Interest Expense 2 0 0 0

Interest Payable 2 0 0 0

Computation:
= P 200,000 x 12% x 1/12 = P 2,000

Dec 31 Rent Expense 1 8 0 0 0

Prepaid Rent 1 8 0 0 0
AJE for Rent Expense

Computation:
= P 108,000 / 6 months = P 18,000 per month
= rent expense from Dec 1 to Dec 31 is P 18,000 (one month only)

CLOSING ENTRIES:

Dec 31 Service Fees 2 6 0 0 0 0

Salaries Expense 8 0 0 0
Utilities Expense 1 5 0 0 0
Depreciation Expense 5 0 0 0
Interest Expense 2 0 0 0
Rent Expense 1 8 0 0 0
Income Summary 2 1 2 0 0 0

Dec 31 Income Summary 2 1 2 0 0 0

B, Capital 2 1 2 0 0 0

Dec 31 B, Capital 5 0 0 0 0
B, Drawing 5 0 0 0 0

2002

REVERSING ENTRIES:
Jan 1 Salaries Payable 8 0 0 0
Dec 31 Salaries Expense 8 0 0 0

Jan 1 Interest Payable 2 0 0 0

Interest Expense 2 0 0 0
 POSTING TO THE LEDGER

CASH
CREDIT Date DESCRIPTION DEBIT CREDIT
1 Owner's Investment 3 2 0 0 0 0
Dec 1 Loans Obtained 2 0 0 0 0 0
Dec 1 Equipment Purchased 2
4 Prepayment for rent 1
5 Services rendered 2 6 0 0 0 0
6 Payment of utilities
7 Cash withdrawal

PREPAID RENT
Date DESCRIPTION DEBIT CREDIT
4 Prepayment for rent 1 0 8 0 0 0

EQUIPMENT
Date DESCRIPTION DEBIT CREDIT
Dec1 Equipment Purchased 2 4 0 0 0 0

NOTES PAYABLE
Date DESCRIPTION DEBIT CREDIT
2 Loans obtained 2

B, CAPITAL
Date DESCRIPTION DEBIT CREDIT
1 Ower's Investment 3

B, DRAWING
Date DESCRIPTION DEBIT CREDIT
7 Owner's Drawing 5 0 0 0 0
 SERVICE FEES
Date DESCRIPTION DEBIT CREDIT
5 Services rendered 2

UTILITIES EXPENSE
Date DESCRIPTION DEBIT CREDIT
6 Payment of utilities 1 5 0 0 0
DGER

CREDIT BALANCE
3 2 0 0 0 0
5 2 0 0 0 0
4 0 0 0 0 2 8 0 0 0 0
0 8 0 0 0 1 7 2 0 0 0 Unadjusted Trial Balance
4 3 2 0 0 0 Debit
1 5 0 0 0 4 1 7 0 0 0 Accounts
5 0 0 0 0 3 6 7 0 0 0 Cash 367,000.00
Prepaid Rent 108,000.00
Equipment 240,000.00
Notes Payable
B, Capital
B, Drawing 50,000.00
Service Fees
CREDIT BALANCE Utilities Expense 15,000.00
1 0 8 0 0 0 TOTAL 780,000.00
Adjustments:
Salaries Expense
Salaries Payable
Depreciation Expense
CREDIT BALANCE Accumulated Depreciation
2 4 0 0 0 0 Interest Expense
Interest Payable
Rent Expense

CREDIT BALANCE
0 0 0 0 0 2 0 0 0 0 0

CREDIT BALANCE
2 0 0 0 0 3 2 0 0 0 0

CREDIT BALANCE
5 0 0 0 0
 CREDIT BALANCE
6 0 0 0 0 2 6 0 0 0 0

CREDIT BALANCE
1 5 0 0 0
 ENTITY B
WORKSHEET
December 31, 2001

temporary or nominal accounts

adjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement

Credit Debit Credit Debit Credit Debit

367,000.00
18,000.00 90,000.00
240,000.00
200,000.00 200,000.00
320,000.00 320,000.00
50,000.00
260,000.00 260,000.00
15,000.00 15,000.00
780,000.00

8,000.00 8,000.00 8,000.00

8,000.00 8,000.00
5,000.00 5,000.00 5,000.00
5,000.00 5,000.00
2,000.00 2,000.00 2,000.00
2,000.00 2,000.00
18,000.00 18,000.00 18,000.00
33,000.00 33,000.00 795,000.00 795,000.00 48,000.00
212,000.00

if profit: Service Fees 40.00

Expenses 30.00
Income Summary 10.00

Income Summary 10.00

A, Capital 10.00

if loss: Service Fees 60.00

 Income Summary 15.00
Expenses 75.00

A, Capital 15.00
Income Summary 15.00

if breakeven (no profit/loss) Service Fees 25.00

Expense 25.00

2001 Dec 31, 2001 Adjusting

Interest Expense 9,000.00
Interest Payablle 9,000.00

Computation:
= P 300,000 x 12% x 3/12 = P 9,000

2002 WITH REVERSING ENTRIES

Jan 1, 2002 Reversing

Interest Payable 9,000.00
Interest Expense 9,000.00

Sep 30, 2002 Interest Expense 36,000.00

Cash 36,000.00

Interest Expense
36,000.00 9,000.00

27,000.00
2001 Dec 31, 2001 Adjusting
Prepaid Supplies 5,000.00
Supplies Expense 5,000.00

asset method

2002 Jan 1, 2002 Prepaid Supplies 75,000.00

Supplies Expense 75,000.00

Dec 31, 2002 Supplies Expense 5,000.00

Prepaid Supplies 5,000.00

PS SE
5,000.00 5,000.00 5000
75,000.00
70,000.00
B
ET
2001

porary or nominal accounts permanent or real accounts contents will be

permanent or real accounts
Income Statement Balance Sheet Closing Entries Post-Closing Trial Balance
Credit Debit Credit Debit Credit Debit

367,000.00 367,000.00
90,000.00 90,000.00
240,000.00 240,000.00
200,000.00
320,000.00 50,000.00 212,000.00
50,000.00 50,000.00
260,000.00 260,000.00
15,000.00

8,000.00
8,000.00
5,000.00
5,000.00
2,000.00
2,000.00
18,000.00
260,000.00 747,000.00 535,000.00 310,000.00 310,000.00 697,000.00
212,000.00

Closing Entries:
SF 60
exp 75
loss 15
 10 10

WITH NO REVERSING ENTRIES

January 1, 2002 NO REVERSING ENTRY

Sep 30, 2002 Interest Payable 9,000.00

Cash 9,000.00

Sep 30, 2002 Interest Expense 27,000.00

Cash 27,000.00

Interest Expense
27,000.00

27,000.00
 expense method

2002 January 1, 2002 Supplies Exp

Prep Supplies

PS
75000 5,000.00 5,000.00
75,000.00
70,000.00
 FINANCIAL STATEMENTS:

contents will be
rmanent or real accounts ENTITY B
st-Closing Trial Balance INCOME STATEMENT
Credit FOR THE PERIOD ENDED DECEMBER 31, 2001

INCOME
Service Fees P 260,000.00

200,000.00 EXPENSES
482,000.00 Salaries Expense (8,000.00)
Utilities Expense (15,000.00)
Depreciation Expense (5,000.00)
Interest Expense (2,000.00)
Rent Expense (18,000.00)
TOTAL EXPENSES (48,000.00)

8,000.00 PROFIT P 212,000.00

5,000.00

2,000.00

697,000.00
5,000.00

5,000.00

SE 75000
5000
 ENTITY B
STATEMENT OF CHANGES IN OWNER'S EQUITY B
AS OF DECEMBER 31, 2001 AS OF

ASSETS
Capital, January 1 P 320,000.00 Cash
add: Profit 212,000.00 Prepaid rent
less: Drawings (50,000.00) Equipment
Capital, December 31 P 482,000.00 less: Accumulated Deprec
TOTAL ASSETS

LIABILITIES
Notes Payable
Beginning Capital on January 1, 2002 Interest Payable
Salaries Payable
TOTAL LIABILITIES

EQUITY
B, Capital
TOTAL EQUITY

TOTAL LIABILITIES AND

 ENTITY B
BALANCE SHEET
AS OF DECEMBER 31, 2001

P 367,000.00
90,000.00
240,000.00
Accumulated Depreciation (5,000.00)
AL ASSETS 692,000.00

200,000.00
est Payable 2,000.00
ries Payable 8,000.00
AL LIABILITIES 210,000.00

482,000.00
AL EQUITY 482,000.00

AL LIABILITIES AND EQUITY P 692,000.00

 JOURNALIZING
….

Date ACCOUNT DEBIT CREDIT

1 Cash P 2 0 0 0 0 0
C, Capital P 2 0 0 0 0 0
` Owner's Investment

Oct 1 Cash 3 0 0 0 0 0
Notes Payable 3 0 0 0 0 0
Loans Obtained

3 Equipment 3 6 0 0 0 0
Cash 3 6 0 0 0 0
Purchase of equipment

4 Prepaid Supplies 8 0 0 0 0
Cash 8 0 0 0 0
Prepayment for supplies

5 Cash 1 8 0 0 0 0
Service Fees 1 8 0 0 0 0
Services Rendered

6 Accounts Receivable 4 2 0 0 0 0
Service Fees 4 2 0 0 0 0
Services Rendered on account

7 Cash 3 7 0 0 0 0
Accounts Receivable 3 7 0 0 0 0
Collection of accounts

8 Utilities Expense 1 6 0 0 0
Cash 1 6 0 0 0
Payment of utilities

9 Salaries Expense 1 4 0 0 0 0
Cash 1 4 0 0 0 0
Payment of salaries

10 C, Drawing 1 0 0 0 0 0
Cash 1 0 0 0 0 0
Cash withdrawal
ADJUSTING ENTRIES:
` Dec 31 Depreciation Expense 5 0 0 0
Accumulated Depreciation 5 0 0 0
AJE for Depreciation

Computation:
= P 240,000 / 4 years = P 60,000 per year or P 5,000 per month
= P 5,000 x 1 month = P5,000 (depreciation from Dec 1 to Dec 31)

Dec 31 Salaries Expense 8 0 0 0

Salaries Payable 8 0 0 0
Unpaid salaries

Dec 31 Interest Expense 2 0 0 0

Interest Payable 2 0 0 0

Computation:
= P 200,000 x 12% x 1/12 = P 2,000

Dec 31 Rent Expense 1 8 0 0 0

Prepaid Rent 1 8 0 0 0
AJE for Rent Expense

Computation:
= P 108,000 / 6 months = P 18,000 per month
= rent expense from Dec 1 to Dec 31 is P 18,000 (one month only)

CLOSING ENTRIES:

Dec 31 Service Fees 2 6 0 0 0 0

Salaries Expense 8 0 0 0
Utilities Expense 1 5 0 0 0
Depreciation Expense 5 0 0 0
Interest Expense 2 0 0 0
Rent Expense 1 8 0 0 0
Income Summary 2 1 2 0 0 0

Dec 31 Income Summary 2 1 2 0 0 0

B, Capital 2 1 2 0 0 0

Dec 31 B, Capital 5 0 0 0 0
B, Drawing 5 0 0 0 0
 2002

REVERSING ENTRIES:
Jan 1 Salaries Payable 8 0 0 0
Dec 31 Salaries Expense 8 0 0 0

Jan 1 Interest Payable 2 0 0 0

Interest Expense 2 0 0 0
 POSTING TO THE LEDGER

CASH
CREDIT Date DESCRIPTION DEBIT CREDIT
1 Owner's Investment 2 0 0 0 0 0
Oct 1 Loans Obtained 3 0 0 0 0 0
3 Equipment Purchased 3
4 Prepayment for supplies
5 Services rendered 1 8 0 0 0 0
7 Collection of accounts 3 7 0 0 0 0
8 Payment of utilities
9 Cash withdrawal

PREPAID RENT
Date DESCRIPTION DEBIT CREDIT
4 Prepayment for rent 1 0 8 0 0 0

EQUIPMENT
Date DESCRIPTION DEBIT CREDIT
Dec1 Equipment Purchased 2 4 0 0 0 0

NOTES PAYABLE
Date DESCRIPTION DEBIT CREDIT
2 Loans obtained 2

B, CAPITAL
Date DESCRIPTION DEBIT CREDIT
1 Ower's Investment 3

B, DRAWING
Date DESCRIPTION DEBIT CREDIT
7 Owner's Drawing 5 0 0 0 0
 SERVICE FEES
Date DESCRIPTION DEBIT CREDIT
5 Services rendered 2

UTILITIES EXPENSE
Date DESCRIPTION DEBIT CREDIT
6 Payment of utilities 1 5 0 0 0
DGER

CREDIT BALANCE
2 0 0 0 0 0
5 0 0 0 0 0
6 0 0 0 0 8 6 0 0 0 0
8 0 0 0 0 7 8 0 0 0 0 Unadjusted Trial Balance
4 3 2 0 0 0 Debit
4 1 7 0 0 0 Accounts
5 0 0 0 0 3 6 7 0 0 0 Cash 367,000.00
Prepaid Rent 108,000.00
Equipment 240,000.00
Notes Payable
B, Capital
B, Drawing 50,000.00
Service Fees
CREDIT BALANCE Utilities Expense 15,000.00
1 0 8 0 0 0 TOTAL 780,000.00
Adjustments:
Salaries Expense
Salaries Payable
Depreciation Expense
CREDIT BALANCE Accumulated Depreciation
2 4 0 0 0 0 Interest Expense
Interest Payable
Rent Expense

CREDIT BALANCE
0 0 0 0 0 2 0 0 0 0 0

CREDIT BALANCE
2 0 0 0 0 3 2 0 0 0 0

CREDIT BALANCE
5 0 0 0 0
 CREDIT BALANCE
6 0 0 0 0 2 6 0 0 0 0

CREDIT BALANCE
1 5 0 0 0
 ENTITY B
WORKSHEET
December 31, 2001

temporary or nominal accounts

adjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement

Credit Debit Credit Debit Credit Debit

367,000.00
18,000.00 90,000.00
240,000.00
200,000.00 200,000.00
320,000.00 320,000.00
50,000.00
260,000.00 260,000.00
15,000.00 15,000.00
780,000.00

8,000.00 8,000.00 8,000.00

8,000.00 8,000.00
5,000.00 5,000.00 5,000.00
5,000.00 5,000.00
2,000.00 2,000.00 2,000.00
2,000.00 2,000.00
18,000.00 18,000.00 18,000.00
33,000.00 33,000.00 795,000.00 795,000.00 48,000.00
212,000.00

if profit: Service Fees 40.00

Expenses 30.00
Income Summary 10.00

Income Summary 10.00

A, Capital 10.00

if loss: Service Fees 60.00

 Income Summary 15.00
Expenses 75.00

A, Capital 15.00
Income Summary 15.00

if breakeven (no profit/loss) Service Fees 25.00

Expense 25.00

2001 Dec 31, 2001 Adjusting

Interest Expense 9,000.00
Interest Payablle 9,000.00

Computation:
= P 300,000 x 12% x 3/12 = P 9,000

2002 WITH REVERSING ENTRIES

Jan 1, 2002 Reversing

Interest Payable 9,000.00
Interest Expense 9,000.00

Sep 30, 2002 Interest Expense 36,000.00

Cash 36,000.00

Interest Expense
36,000.00 9,000.00

27,000.00
2001 Dec 31, 2001 Adjusting
Prepaid Supplies 5,000.00
Supplies Expense 5,000.00

asset method

2002 Jan 1, 2002 Prepaid Supplies 75,000.00

Supplies Expense 75,000.00

Dec 31, 2002 Supplies Expense 5,000.00

Prepaid Supplies 5,000.00

PS SE
5,000.00 5,000.00 5000
75,000.00
70,000.00
B
ET
2001

porary or nominal accounts permanent or real accounts contents will be

permanent or real accounts
Income Statement Balance Sheet Closing Entries Post-Closing Trial Balance
Credit Debit Credit Debit Credit Debit

367,000.00 367,000.00
90,000.00 90,000.00
240,000.00 240,000.00
200,000.00
320,000.00 50,000.00 212,000.00
50,000.00 50,000.00
260,000.00 260,000.00
15,000.00

8,000.00
8,000.00
5,000.00
5,000.00
2,000.00
2,000.00
18,000.00
260,000.00 747,000.00 535,000.00 310,000.00 310,000.00 697,000.00
212,000.00

Closing Entries:
SF 60
exp 75
loss 15
 10 10

WITH NO REVERSING ENTRIES

January 1, 2002 NO REVERSING ENTRY

Sep 30, 2002 Interest Payable 9,000.00

Cash 9,000.00

Sep 30, 2002 Interest Expense 27,000.00

Cash 27,000.00

Interest Expense
27,000.00

27,000.00
 expense method

2002 January 1, 2002 Supplies Exp

Prep Supplies

PS
75000 5,000.00 5,000.00
75,000.00
70,000.00
 FINANCIAL STATEMENTS:

contents will be
rmanent or real accounts ENTITY B
st-Closing Trial Balance INCOME STATEMENT
Credit FOR THE PERIOD ENDED DECEMBER 31, 2001

INCOME
Service Fees P 260,000.00

200,000.00 EXPENSES
482,000.00 Salaries Expense (8,000.00)
Utilities Expense (15,000.00)
Depreciation Expense (5,000.00)
Interest Expense (2,000.00)
Rent Expense (18,000.00)
TOTAL EXPENSES (48,000.00)

8,000.00 PROFIT P 212,000.00

5,000.00

2,000.00

697,000.00
5,000.00

5,000.00

SE 75000
5000
 ENTITY B
STATEMENT OF CHANGES IN OWNER'S EQUITY B
AS OF DECEMBER 31, 2001 AS OF

ASSETS
Capital, January 1 P 320,000.00 Cash
add: Profit 212,000.00 Prepaid rent
less: Drawings (50,000.00) Equipment
Capital, December 31 P 482,000.00 less: Accumulated Deprec
TOTAL ASSETS

LIABILITIES
Notes Payable
Beginning Capital on January 1, 2002 Interest Payable
Salaries Payable
TOTAL LIABILITIES

EQUITY
B, Capital
TOTAL EQUITY

TOTAL LIABILITIES AND

 ENTITY B
BALANCE SHEET
AS OF DECEMBER 31, 2001

P 367,000.00
90,000.00
240,000.00
Accumulated Depreciation (5,000.00)
AL ASSETS 692,000.00

200,000.00
est Payable 2,000.00
ries Payable 8,000.00
AL LIABILITIES 210,000.00

482,000.00
AL EQUITY 482,000.00

AL LIABILITIES AND EQUITY P 692,000.00