University of Santo Tomas Industrial Engineering Department IE 312- Financial Accounting Problem Set # 2

A.

Marichu Fornolles Guardians completed the following transactions during May 2010. 1 3 4 5 6 9 12 16 17 22 24 27 29 30 31 31 31 Fornolles transferred cash from a personal account to an account to be used for the business, P243,000 Fornolles invested in the business personal weapons having a fair market value of P34,000 Bought communication equipment on account from Pesa Electronics, P13,740. Paid rent for the month, P7,650. Bought a used service vehicle car for P93,000, paying P45,000 down, with the balance due in thirty days. Received invoice and paid insurance premium to Cacawa Fidelity Company for bonding employees, P7,710. Performed security services for Loreta Galleries. Billed Loreta for services rendered , P8,250. Received bill from Marcos Printers for office stationery, P1,757, Billed Pascua Construction for services rendered, P14,790. Paid Regal Shell Service for gasoline for service vehicle, P720. Performed security services at a fashion jewelry fair. Billed organizers for services rendered, P17,500. Paid Pesa Electronics P4,500 to apply on an account. Received P8,250 from Loreta Galleries in full payment on account. Billed Merchant Bank for services rendered, P21,600. Received and paid telephone bill, P1,030 Paid salaries to employees, P 31,500 Fornolles withdrew cash for personal use, P18,000

May

B.

Violeta Nunez won a concession to rent out bicycles in the Quezon Circle during the summer. During the month of April, Nunez completed the following transactions for her bicycle rental business: 2 3 4 5 Began business by placing P120,000 in a business checking account. Purchased supplies on account for P1,500. Purchased ten bicycles for P25,000, paying P12,000 down and agreed to pay the balance in thirty days. Paid P29,000 in cash for a furnished container to store the bicycles and use for other operations.

April

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Received P4,700 in cash for rentals during the first week of operation. Paid P4,000 in cash for shipping and installation costs (considered an addition to the cost of the container) to place the container at the park entrance. Hired a part-time assistant to help on weekends. Paid a maintenance person P750 to clean the grounds. Received P5,000 in cash for rentals during the second week of operation. Paid the assistant P480 for a weekends work. Paid the supplies purchased on April 3 Paid a P550 repair bill on bicycles. Received P5,500 in cash for rentals during the third week of operation. Paid the assistant P480 for a weekends work. Billed a company P1,100 for bicycle rentals for employees outing. Paid the P3,000 fee for April to the Park Administration for the right to the bicycle concession. Received P4,100 in cash for rentals during the week. Paid the assistant P480 for a weekends work. Transferred P5,000 to personal checking account.

1. Prepare Journal Entries 2. Post all the journal entries using the following ledger accounts: A. Cash;Accounts Receivable; Prepaid Insurance; Arms and Communication Equipment; Service Vehicle; Accounts Payable; Fornolles Capital; Fornolles, Withdrawals; Service Revenues; Salaries Expense; Rent Expense; Supplies Expense; Gasoline Expense and Utilities Expense. B. Cash; Accounts Receivable; Supplies; Container; Bicycles; Accounts Payable; Nunez, Capital; Nunez, Withdrawals; Rental Revenues; Wages Expense; Maintenance Expense; Repair Expense; and Concession Fee Expense. 3. Prepare trial balance.