Solution manual fundamentals of accounting by cabrera chapter 10

Chapter 10
Completing the Accounting Cycle
Exercises
Exercise 1
Closing entry on Dec. 31
Patient Services
Laboratory Fees
Income Summary

340,000
180,000
520,000

Exercise 2
Closing entry on Dec. 31
Income Summary
Rent Expense
Wages Expense
Other Expenses

300,000
140,000
110,000
50,000

Exercise 3
Closing entry on Dec. 31
Income Summary
Capital Account

22,000

22,000

Exercise 4
Reversing entries
a. not reversed
b. not reversed
c. Salary Payable
Salaries Expense

3,600
3,600


2

Chapter 10

Exercise 5

(c) AJE
April 3

Salaries Expense
18,000
3,600 CE
RE
4,800

Salaries Payable
(c) AJE

21,600
3,600

RE

3,600

Exercise 6
Closing entry on Dec. 31
1. Repair Revenue
368,600
Wages Expense
Rent Expense
Supplies Expense
Insurance Expense
Depreciation Expense – Repair Equipment
Income Taxes Expense
Income Summary
To close the revenue and expense accounts
to Income Summary.

122,600
18,000
63,900
13,700
20,200
40,000
90,200

3,600

Completing the Accounting Cycle

3

Exercise 7
Max Pest Control Services
Worksheet
For the Year Ended September 30, 2008

Cash
Accounts receivable
Prepaid rent
Supplies
Equipment
Accumulated
depreciation
Accounts payable
Salary payable
Robert Claro, Capital
Robert Claro,
Drawing
Service revenue
Depreciation
expense
Salary expense
Rent expense
Utilities expense
Supplies expense

Trial Balance
DR
CR
356,000
34,400
12,000
33,900
126,000

(a)

2,100
(d) 6,000
(e) 16,500

28,400
16,000
160,300

(b)

400

(c)

5,000

(a)

2,100

30,000

Adjusted Trial Balance
DR
CR
356,000
36,500
6,000
17,400
126,000

Income Statement
DR
CR

(b)
(c)
(d)

18,000
7,800
297,700

400
5,000
6,000

(e) 16,500

30,000

30,000

Balance Sheet
DR
CR
356,000
36,500
6,000
17,400
126,000

28,800
16,000
5,000
160,300

28,800
16,000
5,000
160,300

30,000
93,000

297,700
Net income

Adjustments

DR
CR

30,000
95,100

400
23,000
6,000
7,800
16,500
305,200

305,200

95,100
400
23,000
6,000
7,800
16,500
53,700
41,400
95,100

95,100

251,500

95,100

251,500

210,100
41,400
251,500


4

Chapter 10

Exercise 8
JOURNAL
Date
a

b

c

Account Titles and Explanation
Office Equipment
Supplies

Post
Ref

Debit
29,000

Rent Expense (P9,000 x 2)
Prepaid Rent
Cash

29,000
18,000
18,000
9,000

Salary Payable
d

e

f

Credit

Unearned Service Revenue
Accounts Receivable

9,000
32,000
32,000

Interest Receivable
Accounts Receivable

8,000

Accounts Payable
Cash

6,000

8,000

6,000

Exercise 9
Bazooka Trailer Rental
Income Statement
For the Year Ended December 31, 2008
Trailer Rentals
Less: Expenses
Wage expense
Insurance expense
Supplies expense
Depreciation expense, trailers
Other expense
Total expenses
Net income

Bazooka Trailer Rental

P910,920
468,000
14,400
5,320

48,000
215,640
751,360
P159,560


Completing the Accounting Cycle

5

Statement of Changes in Owner’s Equity
For the Year Ended December 31, 2008
J. Reyes, Capital, January 1
Add: Net income

P 83,880
159,560
P243,440
114,000
P129,440

Less: Withdrawals
J. Reyes, Capital, December 31
Bazooka Trailer Rental
Balance Sheet
December 31, 2008
Assets
Current Assets
Cash
Accounts receivable

Supplies
Prepaid insurance
Total current asset

P 13,840
19,440
2,380
7,200
P 42,860

Trailers
Less: Accumulated depreciation
Net carrying value

P240,000
144,000
96,000

Total Assets

P138,860
Liabilities and Owner’s Equity

Liabilities
Current Liabilities
Accounts payable
Wages payable
Total Liabilities
Owner’s Equity
J. Reyes, Capital

Total Liabilities and Owner’s Equity

Exercise 10

P

5,420
4,000
9,420

129,440
P138,860


6

Chapter 10

There is no single correct way to present the solution to this case. However, the
solution should include answers to the following questions:
1. What was the entity’s net income for the year? This question can be
answered by completing the work sheet. (The overall solution also requires
preparation of the income statement).
2. What were the entity’s total assets, liabilities, and capital at the end of the
year? The balance sheet answers this question.
3. Did the owner’s capital account increase or decrease from its original
balance of P250,000? This question is answered by the statement of
owner’s equity.
Answers:
(1) See the work sheet, which indicates that net income for the year was

P335,400. The entity’s income statement is
Dantes Computing Service
Income Statement
For the Month Ended December 31, 20xx
Revenues:
Service revenue
Expenses:
Salary expense
Depreciation expense
Rent expense
Supplies expense
Utilities expense
Total expenses
Net income

P629,400
P182,000
59,000
24,000
21,000
8,000
294,000
P335,400


Completing the Accounting Cycle

7

(2) Total assets were P383,900, total liabilities were P232,700, owner’s capital

was P151,200,as reported on the balance sheet:
Dantes Computing Service
Balance Sheet
December 31, 20xx
ASSETS
Current assets:
Cash
Accounts receivable
Supplies
Prepaid rent
Total current assets
Plant assets:
Equipment
P236,000
Less: Accum. depr.
59,000
Total assets

LIABILITIES
P 58,300
139,600
5,000
4,000
206,900
177,000
P383,900

Current liabilities:
Accounts payable
Salary payable

Unearned service revenue
Total current liabilities
OWNER’S EQUITY
Katrina Dantes, capital
Total liabilities and
owner’s equity

P185,400
12,000
35,300
P232,700
151,200
P383,900

Instructional note: The Working Paper allows students to create a second
peso amount column for assets if needed. The student may also present the
balance sheet in report format.
(3) During the year, Dantes’ capital account decreased from P250,000 to
P151,200, as shown by the statement of owner’s equity.
Dantes Computing Service
Statement of Owner’s Equity
For the Month Ended December 31, 20xx
Katrina Dantes, capital, January 2, 20xx
Add: Net income
Less: Withdrawals
Katrina Dantes, capital, December 31, 20xx

P250,000
335,400
585,400

434,200
P151,200

Dantes’ capital has decreased because withdrawals exceeded net income.
She would probably not get the bank loan. You could recommend that
Dantes earn more income or cut back on withdrawals from the business.


8

Chapter 10

Dantes Computing Service
Worksheet
For the Year Ended December 31, 20xx

Cash
Accounts receivable
Prepaid rent
Supplies
Equipment
Accumulated
depreciation
Accounts payable
Salary payable
Unearned service
revenue
Katrina Dantes,
Capital
Katrina Dantes,

Drawing
Service revenue
Salary expense
Depreciation
expense
Rent expense
Utilities expense
Supplies expense

Trial Balance
DR
CR
58,300
123,600
28,000

Adjustments
DR
CR
(a) 16,000
(c) 24,000
(d)
21,000

26,000
236,000

41,300

(f) 12,000

(b)

6,000

250,000
434,200

Income Statement
DR
CR

5,000
23,600

(e) 59,000
185,400

170,000

8,000

(a) 16,000
(b) 6,000

59,000
185,400
12,000

59,000
185,400

12,000

35,300

35,300

250,000

250,000
629,400

182,000

182,000

(e) 59,000
(c) 24,000

59,000
24,000
8,000

59,000
24,000
8,000

21,000
1,084,10
0

434,200
629,400

(f) 12,000

(d)
138,000

138,000

21,000
1,117,11
0

Balance Sheet
DR
CR
58,300
139,600
4,000
5,000
23,600

434,200
607,400

1,084,10
0
Net income

Adjusted Trial Balance
DR
CR
58,300
139,600
4,000

21,000
1,171,10
0

294,000
335,400
629,400

629,400

877,100

629,400

877,100

541,700
335,400
877,100


Completing the Accounting Cycle

Multiple Choice Questions
1.
2.
3.
4.
5.

a
d, a, e, b, f, c
d
d
b

6.
7.
8.
9.

c
b
c
b

9


10

Chapter 10

Test Material
Test Material 10-1
Rainbow Star Painting Contractors
Worksheet
For the Year Ended July 31, 2008
Account Title
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accumulated
Depreciation
– Equipment
Building
Accumulated
Depreciation
– Building
Land
Accounts Payable
Interest Payable
Wage Payable
Unearned Service
Revenue
Note Payable – Longterm
Nico Coral, Capital
Nico Coral, Drawing
Service Revenue
Depreciation Expense –
Equipment

Depreciation Expense –
Building
Wage Expense
Insurance Expense
Interest Expense
Utilities Expense
Property Tax Expense
Advertising Expense
Supplies Expense

Trial Balance
Debit
Credit
P 12,000
378,200
176,600
23,000
326,900

(h)

11,000
(c)
(d)

P262,400

29,200
5,000

Adjusted Trial Balance
Debit
Credit
12,000
389,200
147,400
18,000
326,900

(a-1) 6,300

368,900

Income Statement
Debit
Credit

105,000

(a-2) 3,700

268,700
368,900

108,700

108,700

283,000
226,900

105,600

(g)
(e)
(b)
(f)

1,000
1,800
2,400

283,000
227,900
1,800
2,400

49,700

224,000
591,300
42,000

227,900
1,800
2,400

55,900

55,900

224,000
591,300

224,000
591,300

42,000
141,900

(f)
(h)

49,700
11,000

(a-1) 6,300
(a-2)
(b)
(d)
(e)

32,000
2,700
8,400
3,400

(g)
(c)
1,657,100

3,700
2,400
5,000
1,800

1,000
29,200
110,100

110,100

Balance Sheet
Debit
Credit
P 12,000
388,200
147,400
18,000
326,900

268,700
368,900

283,000

1,657,100
Net Income

Adjustments

Debit
Credit

42,000
202,600

202,600

6,300

6,300

3,700
34,400
5,000
1,800
2,700
8,400
4,400
29,200
1,683,300

3,700
34,400
5,000
1,800
2,700
8,400
4,400
29,200

95,900
106,700

1,683,300

202,600

1,587,400

1,480,700
106,700


Completing the Accounting Cycle
202,600

202,600

1,587,400

11

1,587,400


12

Chapter 10

Test Material 10-2

Requirement (1)
JOURNAL
Date
June

30

30

30

30

30

30

30

30

Post
Ref

Account Titles and Explanation
Adjusting Entries
Depreciation Expense – Equipment
Accumulated
Depreciation
Equipment

Depreciation Expense – Building
Accumulated
Depreciation
Building

Debit
73,000

–

73,000

39,700
–

39,700

Supplies Expense
Supplies

35,800

Insurance Expense
Prepaid Insurance

31,000

35,800

31,000

Interest Expense
Interest Payable

6,900

Accounts Receivable
Service Revenue

9,400

Unearned Service Revenue
Service Revenue
Wage Expense
Wage Payable

Credit

6,900

9,400
77,900
77,900
7,700
7,700


Completing the Accounting Cycle

13

JOURNAL
Date
June

30

30

30

30

Post
Ref

Account Titles and Explanation
Closing Entries
Service Revenue
Income Summary

Debit
1,098,600

1,098,600

Income Summary
Depreciation Expense – Equipment
Depreciation Expense – Building
Wage Expense

Insurance Expense
Interest Expense
Utilities Expense
Property Tax Expense
Supplies Expense

552,300

Income

546,300

Summary (P1,098,600
P552,300)
Molly Chan, Capital

Credit

73,000
39,700
188,000
31,000
115,100
43,000
26,700
35,800

-

546,300

Molly Chan, Capital
Molly Chan, Drawing

453,000
453,000

Requirement (2)
Mabuhay Financial Couriers
Income Statement
For the Month Ended June 30, 2008
Revenues:
Service revenue
Expenses:
Wage expense
Interest expense
Depreciation expense – equipment
Utilities expense
Depreciation expense – building
Supplies expense
Insurance expense
Property tax expense
Total expenses
Net income

P1,098,600
P188,000
115,100
73,000
43,000

39,700
35,800
31,000
26,700
552,300
P 546,300


14

Chapter 10

Mabuhay Financial Couriers
Statement of Owner’s Equity
For the Month Ended June 30, 2008
Molly Chan, capital, June 30, 2008
Add: Net income

P 683,900
546,300
1,230,200
453,000
P 777,200

Less: Withdrawals
Molly Chan, capital, June 30, 2008
Mabuhay Financial Couriers
Balance Sheet
June 30, 2008
ASSETS

Current assets:
Cash
Accounts receivable
Supplies
Prepaid insurance
Total current assets

P 193,500
264,700
12,900
32,000
P 503,100

Plant assets:
Equipment
P 558,000
Less: Accum. depr.
164,800
Building
P1,449,000
Less: Accum. depr.
168,500
Total assets

LIABILITIES
Current liabilities:
Accounts payable
Interest payable
Wage payable
Unearned service revenue

Total current liabilities
Long-term liabilities:
Note payable
Total liabilities

P 384,000
14,900
7,700
23,000
429,600
970,000
P1,399,600

393,200
1,280,500
P2,176,800

OWNER’S EQUITY
Molly Chan, capital
Total liabilities and
owner’s equity

777,200
P2,176,800

Instructional note: The Working Paper allows students to create a second peso-amount
column for assets if needed.
Requirement (3)
Faculty member can introduce the two important ratios as follows:

Current ratio =

Total current assets
Total current liabilities

=

2008

2007

1.17

1.01

0.64

0.71

P503,100
=
P429,600

The ability to pay current liabilities with current assets improved during 2008.

Debt ratio =

Total liabilities
Total assets

=

P1,399,600
=
P2,176,800


Completing the Accounting Cycle

15

The overall ability to pay total liabilities improved during 2008.
Working this problem will help in managing a business by showing how to use the current
ratio and the debt ratio in decision making. A manager can track his or her business’
current ratio to determine whether its ability to pay current liabilities is improving or
deteriorating. The manager can track the business’s debt ratio to see the trend in the
entity’s overall ability to pay debts. These ratios are widely used for this purpose and
represent two of the most useful decision aids that students will learn in this course.
Students can also gain additional understanding of the information contained in the
income statement and the balance sheet and the role that the end-of-period adjustments
play in producing the financial statements.
They can also learn that the revenue, expense, and withdrawals accounts pertain to a
specific period and must be closed at the end of the period. This learning will aid a
manager’s understanding of the nature of revenues, expenses, and withdrawals.

Test Material 10-3
Requirements (1) and (4)
ACCOUNT
DATE
2008

Oct.
31

ITEM
Bal.

ACCOUNT
DATE
2008
Oct.
31

31

JRNL.
REF

DEBIT

CREDIT

JRNL.
REF

DEBIT

CREDIT

JRNL.
REF

Adj.

J.12

SUPPLIES
JRNL.

CREDIT

2

00
0

12

BALANCE
DEBIT
CREDIT
153 1 0
0

ACCOUNT NO.

DEBIT

11

BALANCE

DEBIT
CREDIT
19 0 0
0

ACCOUNT NO.

PREPAID RENT

ITEM
Bal.

ACCOUNT
DATE

ACCOUNT NO.

ACCOUNTS RECEIVABLE

ITEM
Bal.

ACCOUNT
DATE
2008
Oct. 1

CASH

13

BALANCE
DEBIT
CREDIT
22 0 0
0
20 0 0
0

ACCOUNT NO.

14
BALANCE


16

Chapter 10

2008
Oct. 1
31

ITEM
Bal.

REF

Adj.

J.12

ACCOUNT
DATE
2008
Oct. 1

DATE
2008
Oct. 1
31

DATE
2008
Oct. 1

DATE
2008
Oct. 1
31

DATE
2008
Oct.
31

70
0

JRNL.

REF

JRNL.
REF

DEBIT
40
0
70
0

ACCOUNT NO.
DEBIT

CREDIT

DEPRECIATION

DEBIT

J.12

- ACCOUNT NO.

CREDIT
2

50
0

DEBIT

CREDIT

JRNL.
REF

DEBIT

J.12

5

ACCOUNTS PAYABLE

ITEM
Bal.

JRNL.
REF

CREDIT

DEBIT

80
0

16

17

BALANCE
DEBIT
CREDIT
683 0 0
0

18

BALANCE
DEBIT
CREDIT
121 000
126 800

ACCOUNT NO.
CREDIT

15

BALANCE
DEBIT
CREDIT
34 000
36 500

ACCOUNT NO.

JRNL.

REF

CREDIT

BALANCE
DEBIT
CREDIT
268 3 0
0

ACCUMULATED DEPRECIATION - BUILDING ACCOUNT NO.

ITEM
Bal.
Adj.

ACCOUNT

7

BUILDING

ITEM
Bal.

ACCOUNT

8

ACCUMULATED

FURNITURE

ITEM
Bal.
Adj.

ACCOUNT

CREDIT

FURNITURE

ITEM
Bal.

ACCOUNT

DEBIT

21

BALANCE
DEBIT
CREDIT
72 900


Completing the Accounting Cycle
ACCOUNT
DATE

2008
Oct.
31

ITEM
Adj.

ACCOUNT
DATE
2008
Oct. 1
31

31

DATE
2008
Oct.
31
31

Clo.

DATE
2008
Oct. 31
31
31

DATE

DEBIT

J.12

4

CREDIT

JRNL.
REF

DEBIT

J.12

49
39

90
0

JRNL.
REF

855

JRNL.
REF
J.12

J.12
J.12

CREDIT

DEBIT

49
49

800

32

BALANCE
DEBIT
CREDIT
39 0 0
0

00
0
ACCOUNT NO.

CREDIT
99 6 0
0

33

BALANCE
DEBIT
CREDIT
99 600

700
900

COMMISSION REVENUE
JRNL.

ACCOUNT NO.

39

INCOME SUMMARY

31

BALANCE
DEBIT
CREDIT
844 900
894 800

000

DEBIT

23

BALANCE
DEBIT
CREDIT
53 000
49 000

ACCOUNT NO.
CREDIT

22

BALANCE
DEBIT
CREDIT
3 100

ACCOUNT NO.

000

J.12

ITEM
Clo.

ACCOUNT

CREDIT
3 100

ELLA SANTOS, DRAWING

Clo.

Clo.
Clo.

DEBIT

JRNL.
REF

J.12

ITEM
Bal.

ACCOUNT

JRNL.
REF
J.12

ELLA SANTOS, CAPITAL

ITEM
Bal.
Clo.

ACCOUNT

ACCOUNT NO.

UNEARNED COMMISSION REVENUE

ITEM
Bal.
Adj.

ACCOUNT
DATE
2008
Oct. 1
31

SALARY PAYABLE

17

49

ACCOUNT NO.

41
BALANCE

900

18

Chapter 10

2008
Oct. 31
31
31

ITEM
Bal.
Adj.

REF

Clo.

J.12

ACCOUNT
DATE
2008
Oct. 31
31
31

DATE
2008
Oct.
31

31

Clo.

DATE
2008
Oct.
31
31

DATE
2008
Oct.
31
31

DATE
2008
Oct. 31

ACCOUNT NO.

JRNL.
REF
J.12

DEBIT
3

JRNL.

REF
J.12

100

18
21

50
0

Clo.

2

DEBIT

Clo.

DEBIT
2 50
0

J.12

DEPRECIATION EXPENSE - BUILDING

ITEM
Adj.

JRNL.
REF
J.12

DEBIT
5 80
0

52

53

BALANCE
DEBIT
CREDIT
5 30
0

ACCOUNT NO.

CREDIT

2

51

30
0

DEPRECIATION EXPENSE - FURNITURE

JRNL.
REF
J.12

600

00
0

CREDIT

5

99

BALANCE
DEBIT
CREDIT
2 00
0

ACCOUNT NO.

J.12

ITEM
Adj.

21

CREDIT

600

40
0
50
0

ACCOUNT NO.
DEBIT
2 00
0

95

BALANCE
DEBIT
CREDIT

CREDIT

UTILITIES EXPENSE
JRNL.
REF

CREDIT

600

J.12

ITEM
Bal.

ACCOUNT

99

DEBIT

00
0

RENT EXPENSE

Clo.

ACCOUNT

4

J.12

ITEM
Adj.

ACCOUNT

J.12

CREDIT

SALARY EXPENSE

ITEM
Bal.
Adj.

ACCOUNT

DEBIT

54

BALANCE
DEBIT
CREDIT
2 50
0

50
0
ACCOUNT NO.

CREDIT

55

BALANCE

DEBIT
CREDIT
5 80
0


Completing the Accounting Cycle
31

Clo.

ACCOUNT
DATE
2008
Oct.
31
31

Clo.

JRNL.
REF

DEBIT

J.12

80
0
ACCOUNT NO.

CREDIT

4

JRNL.
REF
J.12
J.12

DEBIT
7 70
0

BALANCE
DEBIT
CREDIT
4 90
0

ACCOUNT NO.

CREDIT

7

56

90
0

SUPPLIES EXPENSE

ITEM
Adj.
Clo.

5

ADVERTISING EXPENSE

ITEM
Bal.

ACCOUNT
DATE
2008
Oct.
31
31

J.12

19

70
0

57

BALANCE
DEBIT
CREDIT
7 70
0


20

Chapter 10

Green Star Talent Agency
Worksheet
For the Month Ended October 31, 2008

Cash
Accounts receivable
Prepaid rent
Supplies
Furniture
Accumulated
depreciation –
furniture
Building
Accumulated
depreciation –
building
Accounts payable
Salary payable
Unearned

commission
revenue
Ella Santos, Capital
Ella Santos, Drawing
Commission revenue
Salary expense
Rent expense
Utilities expense
Depreciation
expense –
furniture
Depreciation
expense - building
Advertising expense
Supplies expense

Trial Balance
DR
CR
19,000
153,100
22,000
8,400
268,300
34,000

(b)
(c)

2,000

7,700

(d)

2,500

683,000

53,000
844,900
39,000

Adjusted Trial Balance
DR
CR
19,000
153,100
20,000
700
268,300

Income Statement
DR
CR

(a)

5,800

(f)

3,100

4,000

95,600

18,400

(e)

(a)

400

36,500

4,900
1,221,40
0

39,000

683,000
126,800
72,900
3,100

126,800
72,900

3,100

49,000
844,900

49,000
844,900

99,600

99,600

(f)
(b)

3,100
2,000

21,500
2,000
5,300

21,500
2,000
5,300

(d)

2,500

2,500

2,500

(e)

5,800

(c)

7,700

5,800
4,900
7,700
1,232,80
0

5,800
4,900
7,700

5,300

25,100

25,100

Balance Sheet
DR

CR
19,000
153,100
20,000
700
268,300

36,500
683,000

121,000
72,900

1,221,40
0
Net income

Adjustments
DR
CR

1,232,80
0

39,000

49,700
49,900

99,600

1,183,10
0

99,600

99,600

1,183,10
0

1,133,20
0
49,900
1,183,10
0


Completing the Accounting Cycle

21


22

Chapter 10

Requirement (3)
Green Star Talent Agency
Income Statement

For the Month Ended October 31, 2008
Revenues:
Commission revenue
Expenses:
Salary expense
Supplies expense
Depreciation expense – building
Utilities expense
Advertising expense
Depreciation expense - furniture
Rent expense
Total expenses
Net income

P99,600
P21,500
7,700
5,800
5,300
4,900
2,500
2,000

Green Star Talent Agency
Statement of Owner’s Equity
For the Month Ended October 31, 2008
Ella Santos, capital, October 1, 2008
Add: Net income
Less: Withdrawals
Ella Santos, capital, October 31, 2008

49,700
P 49,900

P 844,900
49,900
894,800
39,000
P 855,800


Completing the Accounting Cycle

23

Green Star Talent Agency
Balance Sheet
October 31, 2008
ASSETS
Current assets:
Cash
Accounts receivable
Prepaid rent
Supplies
Total current assets
Plant assets:
Furniture
Less: Accumulated depreciation
Building
Less: Accumulated depreciation

Total assets
LIABILITIES
Current liabilities:
Accounts payable
Salary payable
Unearned commission revenue
Total current liabilities
OWNER’S EQUITY
Ella Santos, capital
Total liabilities and owner’s equity

P 19,000
153,100
20,000
700
192,800
P268,300
36,500
P683,000
126,800

231,800
556,200
P980,800
P 72,900
3,100
49,000
125,000
855,800
P980,800

24

Chapter 10

Requirement (4)
JOURNAL
Date
2008
October 31

31

31

31

31

31

Post
Ref

Account Titles and Explanation
Adjusting Entries
Unearned Commission Revenue
Commission Revenue

Debit

23
41

4,000

Rent Expense
Prepaid Rent

52
13

2,000

Supplies Expense
Supplies

57
14

7,700

4,000

2,000

7,700

Depreciation Expense - Furniture

Accumulated
Depreciation
Furniture

54
16

2,500

-

Depreciation Expense – Building
Accumulated
Depreciation
Building

55
18

58,000

–

51
22

3,100

Salary Expense
Salary Payable

Credit

2,500

58,000

3,100

JOURNAL
Date
2008
October 31

31

31

31

Post
Ref

Account Titles and Explanation
Closing Entries
Commission Revenue
Income Summary
Income Summary
Salary Expense
Rent Expense

Utilities Expense
Depreciation Expense – Furniture
Depreciation Expense – Building
Advertising Expense
Supplies Expense
Income

Summary
P49,700)
Ella Santos, Capital

Ella Santos, Capital
Ella Santos, Drawing

(P99,600

-

Debit

41
33

99,600

33
51
52
53
54

55
56
57

49,700

33

49,900

99,600

21,500
2,000
5,300
2,500
5,800
4,900
7,700

31
31
32

Credit

49,900
39,000
39,000

Completing the Accounting Cycle

25

Requirement (5)
Green Star Talent Agency
Postclosing Trial Balance
October 31, 2008
P

Cash
Accounts receivable
Prepaid rent
Supplies
Furniture
Accumulated depreciation – Furniture
Building
Accumulated depreciation – Building
Accounts payable
Salary payable
Unearned commission revenue
Ella Santos, capital
Total

19,000
153,100
20,000
700
268,300

P

36,500

68,300

P1,144,100

126,800
72,900
3,100
49,000
855,800
P1,144,100