Scribd Logo
Upload

Welcome to Scribd!

  • 2K views

    Discussion Questions On Accounting Cycle of A Service Business

    Uploaded by

    Ghillian Mae Guiang
    The document provides journal entries, ledger postings, an unadjusted trial balance, adjusting entries, and a partial worksheet for a janitorial service business owned by Mr. George called "George Johnny" that recorded various transactions throughout the year including investments, purchases, billings, collections, withdrawals, and expenses. Adjusting entries were needed to account for estimated uncollectible accounts, unused supplies, and unpaid salaries. The worksheet would be completed to arrive at a post-closing trial balance for the accounting period.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd

    Discussion Questions On Accounting Cycle of A Service Business

    Uploaded by

    Ghillian Mae Guiang
    2K views6 pages
    The document provides journal entries, ledger postings, an unadjusted trial balance, adjusting entries, and a partial worksheet for a janitorial service business owned by Mr. George called "George Johnny" that recorded various transactions throughout the year including investments, purchases, billings, collections, withdrawals, and expenses. Adjusting entries were needed to account for estimated uncollectible accounts, unused supplies, and unpaid salaries. The worksheet would be completed to arrive at a post-closing trial balance for the accounting period.

    Original Title

    Discussion Questions on Accounting Cycle of a Service Business

    Copyright

    © © All Rights Reserved

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document provides journal entries, ledger postings, an unadjusted trial balance, adjusting entries, and a partial worksheet for a janitorial service business owned by Mr. George called "George Johnny" that recorded various transactions throughout the year including investments, purchases, billings, collections, withdrawals, and expenses. Adjusting entries were needed to account for estimated uncollectible accounts, unused supplies, and unpaid salaries. The worksheet would be completed to arrive at a post-closing trial balance for the accounting period.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    2K views6 pages

    Discussion Questions On Accounting Cycle of A Service Business

    Uploaded by

    Ghillian Mae Guiang
    The document provides journal entries, ledger postings, an unadjusted trial balance, adjusting entries, and a partial worksheet for a janitorial service business owned by Mr. George called "George Johnny" that recorded various transactions throughout the year including investments, purchases, billings, collections, withdrawals, and expenses. Adjusting entries were needed to account for estimated uncollectible accounts, unused supplies, and unpaid salaries. The worksheet would be completed to arrive at a post-closing trial balance for the accounting period.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 6

    Guiang, Ghillian Mae B.

    AC 101

    Discussion Questions on Accounting Cycle of a Service Business

    ADAPTED: Zeus Vernon B. Millan, Financial Accounting and Reporting – Fundamentals, 2018, 1 st Edition

    Problem: Worksheet:

    Mr. George opened a janitorial service business called “George Johnny” on January 1, 20x1. The following were the transactions during the year:

    1. Mr. George made an investment of P100,000 to the business.


    2. The business purchased supplies worth P60,000. Mr. George uses the expense method.
    3. Total service fees billed to clients, on account, amounted to P400,000.
    4. Total collections on accounts receivable amounted to P270,000.
    5. Mr. George took P60,000 cash from the business.
    6. Total salaries paid amounted to P180,000.

    Additional information:

    a. One of the debtors of Mr. George with an account balance of P50,000 is undergoing financial difficulties. Mr. George estimated that only P40,000 of the account will be
    collected.
    b. Unused supplies at the end of the period amounted to P20,000.
    c. Unpaid employee salaries amounted to P30,000.

    Requirements:

    a. Provide the journal entries. (10 pts.)


    b. Post the entries to the ledger. (10 pts.)
    c. Prepare the unadjusted trial balance. ( 5 pts. )
    d. Provide the adjusting entries. ( 10 pts.)
    e. Complete the worksheet up to post closing trial balance. (35 pts.)
    A. Provide Journal Entries

    1 Cash P 100,000

    Owner’s Capital P 100,000

    To record the investment made by the owner


    to the business

    2 Supplies Expense 60,000

    Cash 60,000

    To record the purchase of supplies

    3 Accounts Receivable 400,000

    Service Revenue 400,000

    To record the services rendered on account

    4 Cash 270,000

    Accounts Receivable 270,000

    To record the collection of accounts receivable

    5 Owner’s Drawings 60,000

    Cash 60,000

    To record the withdrawal of owner


    6 Salaries Expense 180,000

    Cash 180,000

    To record the expenses for salaries of employees

    B. Post Entries to the Ledger

    ASSETS

    CASH
    (1) P 100,000 P 60,000 (2)

    (4) 270,000 60,000 (5)

    180,000 (6)

    P 70,000

    ACCOUNTS RECEIVABLE

    (3) P 400,000 P 270,000 (4)

    P 130,000

    OWNER’S EQUITY
    OWNER’S CAPITAL OWNER’S DRAWING

    P 100,000 (1) (5) P 60,000

    P 100,000
    P 60,000
    INCOME
    SERVICE REVENUE

    P 400,000 (4)

    EXPENSES
    SUPPLIES EXPENSE SALARIES EXPENSE

    (2) P 60,000 (6) P 180,000

    P 60,000 P 180,000

    C. Provide the Unadjusted Trial Balance


    George Johnny
    Unadjusted Trial Balance
    December 31, 20x1

    ACCOUNTS DEBIT CREDIT

    Cash P 70,000

    Accounts Receivable 130,000

    Owner’s Capital P 100,000

    Owner’s Drawing 60,000

    Service Revenue 400,000

    Supplies Expense 60,000

    Salaries Expense 180,000

    TOTALS P 500,000 P 500,000


    D. Provide the Adjusting Entries

    A Bad Debts Expense P 10,000

    Allowance for Bad Debts P 10,000

    To record the bad debts expense for the


    period

    B Prepaid Supplies 20,000

    Supplies Expense 20,000

    To recognized the unused portion of the


    supplies

    C Salaries Expense 30,000

    Salaries Payable 30,000

    To record unpaid salaries


    E. Complete the worksheet until the post-closing trial balance

    You might also like