Application 1-a

PROBLEM 1- Completing the cycle.

Requirements:

a. Provide journal entries.

b. Post the entries to the ledger.
c. Prepare the unadjusted trial balance.

d. Provide the adjusting entries.

e. Complete the worksheet up to post-closing trial balance.

f. Prepare the closing entries.

g. Prepare the balance sheet and income statement.


Entity Backspace started operations in 20x1. The following were the transactions for the year ended

December 31, 20x1:


1. The owner invested P 300, 000 cash in the business.

2. The business obtained a 12%, one-year, bank loan of P200, 000 on October 1, 20x1. Principal and

interest are due at maturity date.

3. Purchased office supplies worth P80, 000 for cash (Entity Backspace uses the Asset method).

4. Purchased equipment on November 1, 20x1 for P360, 000 cash. (5 years useful life)

5. Rendered services worth P180, 000 for cash.

6. Rendered services worth P420, 000 on account.

7. Collected P370, 000 accounts receivable.

8. Paid utilities expense of P16, 000.

9. Paid salaries expense of P140, 000.

10. The owner withdrew P100, 000 cash from the business.


Application b

Instruction: For each of the sales terms, determine the following:

1. the amount recorded as a sale.

2. the amount of cash received.

On July 1, 2019, Savery Lace & Boxes sold merchandise with a P 150, 000 list price.

•Trade Discount •Credit Terms •Date Paid

a. 30% 2/10, n/30 July 8

b. 40% 1/10, n/30. July 15

c. - 2/10, n/30. July 11

d. 20% 1/15,n/30 July 14

e. 40% n/30. July 28


Application C

1. On January 1, 20x1, Mr. A and Ms. B formed a partnership. Mr. A contributed cash of ₱500,000
while Ms. B contributed a building with carrying amount of ₱400,000 and fair value of ₱800,000. The
building has an unpaid mortgage of ₱200,000 which is not assumed by the partnership.

Requirement: Provide the journal entry to record the contributions of the partners.​