EXERCISE 1

Instruction: On a separate sheet of paper, solve the problem.

Gaudie G. won a concession to rent out bicycles in CLSU. During the month of April 2021, Gaudie G. completed the
following transactions for his bicycle rental business.

April 2 Began business by placing P120,000 in a business checking account.

3 Purchased supplies on account for P1,500.
4 Purchased ten bicycles for P25,000 paying P12,000 down and agreed to pay the balance in thirty days.
5 Paid P29,000 in cash for a furnished container to store the bicycles and use for other operations.
6 Received P4,700 in cash for rentals during the first week of operation.
8 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.
9 Hired a part-time assistant to help on weekends.
10 Paid a maintenance person P750 to clean the grounds.
13 Received P5,000 in cash for rentals during the second week of operation.
16 Paid the assistant P480 for a weekend’s work.
17 Paid for the supplies purchased on April 3.
18 Paid a P550 repair bill on bicycles.
20 Received P5,500 in cash for rentals during the third week of operation.
22 Paid the assistant P480 for a weekend’s work.
23 Billed a company P1,100 for bicycle rentals for employees’ outing.
25 Paid the P3,000 fee for April to the Park Administration for the right to the bicycle concession.
27 Received P4,100 in cash for rentals during the week.
29 Paid the assistant P480 for a weekend’s work.
30 Transferred P5,000 to personal checking account.

Required:
1. Prepare the journal entries for the April transactions.
2. Set up the following ledger accounts and post all the journal entries: Cash; Accounts Receivable; Supplies;
Container; Bicycles; Accounts Payable; Gaudie, Capital; Gaudie, Withdrawals; Rental Revenues; Wages Expense;
Maintenance Expense; Repair Expense; and Concession Fee Expense.
3. Prepare a trial balance.

1. JOURNALIZING
GAUDIE G. BICYCLE RENTAL BUSINESS
GENERAL JOURNAL ENTRY
FOR THE MONTH ENDED OF APRIL 30, 2021
DATE ACCOUNTS AND EXPLANATIONS P DEBIT CREDIT
R
April 2 Cash ₱ 120,000.00
Gaudie, Capital ₱ 120,000.00
To record the initial investment of Gaudie G.

3 Supplies 1,500.00
Accounts Payable 1,500.00
 To record the purchased supplies on account

4 Bicycles 25,000.00
Cash 12,000.00
Accounts Payable 13,000.00
To record the purchase of bicycles paying on cash
and pay the remaining balance

5 Container 29,000.00
Cash 29,000.00
To record the purchase of furnished container to
store

6 Cash 4,700.00
Rental Revenues 4,700.00
To record the rental revenues during the first week
of operation

8 Container 4,000.00
Cash 4,000.00
To record the payment for shipping and
installations costs

10 Maintenance Expense 750.00

Cash 750.00
To record the payment for maintenance person to
clean the ground

13 Cash 5,000.00
Rental Revenues 5,000.00
To record the rental revenues during second
operation

16 Wages Expense 480.00

Cash 480.00
To record the payment for the assistant

17 Accounts Payable 1,500.00

Cash 1,500.00
To record the payment of supplies on April 3

18 Repair Expense 550.00

Cash 550.00
To record the repair bill on bicycles

20 Cash 5,500.00
Rental Revenues 5,500.00
To record the rental revenues during third
operation
 22 Wages Expense 480.00
Cash 480.00
To record the payment for the assistant

23 Accounts Receivable 1,100.00

Rental Revenues 1,100.00
To record the billed rental revenues

25 Concession Fee Expense 3,000.00

Cash 3,000.00
To record the payment for the bicycle concession

27 Cash 4,100.00
Rental Revenues 4,100.00
To record the rental revenues during the week

29 Wages Expense 480.00

Cash 480.00
To record the payment for the assistant

30 Gaudie, Withdrawals 5,000.00

Cash 5,000.00
To record the withdrawals of Gaudie G.

2. POSTING
GAUDIE G. BICYCLE RENTAL BUSINESS
GENERAL LEDGER ENTRY
FOR THE MONTH ENDED OF APRIL 30, 2021
DATE EXPLANATION PR DEBIT CREDIT BALANCE
CASH
DEBIT CREDIT
Apri 2 120,000.00 120,000.00
l
4 12,000.00 108,000.00
5 29,000.00 79,000.00
6 4,700.00 83,700.00
8 4,000.00 79,700.00
10 750.00 78,950.00
13 5,000.00 83,950.00
16 480.00 83,470.00
17 1,500.00 81,970.00
18 550.00 81,420.00
20 5,500.00 86,920.00
22 480.00 86,440.00
25 3,000.00 83,440.00
27 4,100.00 87,540.00
29 480.00 87,060.00
30 5,000.00 82,060.00
 ACCOUNTS RECEIVABLE
23 1,100.00 1,100.00
SUPPLIES
3 1,500.00 1,500.00
CONTAINER
5 29,000.00 29,000.00
8 4,000.00 33,000.00
BICYCLES
4 25,000.00 25,000.00
ACCOUNTS PAYABLE
3 1,500.00 1,500.00
4 13,000.00 14,500.00
17 1,500.00 13,000.00
GAUDIE, CAPITAL
1 120,000.00 120,000.00
GAUDIE, WITHDRAWALS
30 5,000.00 5,000.00
RENTAL REVENUES
6 4,700.00 4,700.00
13 5,000.00 9,700.00
20 5,500.00 15,200.00
23 1,100.00 16,300.00
27 4,100.00 20,400.00
WAGES EXPENSE
16 480.00 480.00
22 480.00 960.00
29 480.00 1,440.00
MAINTENANCE EXPENSE
10 750.00 750.00
REPAIR EXPENSE
18 550.00 550.00
CONCESSION FEE EXPENSE
25 3,000.00 3,000.00
 3. TRIAL BALANCE
GAUDIE G. BICYCLE RENTAL BUSINESS
TRIAL BALANCE OF BALANCES
FOR THE MONTH ENDED OF APRIL 30, 2021
ACCOUNT TITLES DEBIT CREDIT
CASH 82,060.00
ACCOUNTS RECEIVABLE 1,100.00
SUPPLIES 1,500.00
CONTAINER 33,000.00
BICYCLES 25,000.00
ACCOUNTS PAYABLE 13,000.00
GAUDIE, CAPITAL 120,000.00
GAUDIE, WITHDRAWALS 5,000.00
RENTAL REVENUES 20,400.00
WAGES EXPENSE 1,440.00
MAINTENANCE EXPENSE 750.00
REPAIR EXPENSE 550.00
CONCESSION FEE EXPENSE 3,000.00
TOTAL: ₱ 153,400.00 ₱ 153,400.00