1 | ACCTG 101

Accounting Definition

Defined by the American Institute of Certified Public Accountants (AICPA):

 It is the art of recording, classifying, summarizing in a significant manner and in terms of money,
transactions, and events which are, in part at least, of a financial character, and interpreting the results
thereof.

Five Basic Elements of the Financial Statements

In order to enhance the quality of information in financial statements, business transactions are grouped in different
classes or categories on the basis of their economic characteristics. The broad classes or categories are called
elements of financial statements. These elements help measure the business’ financial position and performance.

The elements that are directly related to the measurement of financial position in the balance sheet of the business
are—

1. Assets. These are valuable resources owned by the business that can provide future economic benefits.
 these are valuable resources owned by the business
 their characteristics are:
o controlled by the business
o these are the results of past and valid events (either it is bought, donated, invested, or
traded)
o these can provide future economic benefits for the business
 ex: current– cash, cash equivalents, accounts receivable, notes receivable, inventory, supplies,
prepayments, short-term investments
 ex: non-current– property, land, plant, equipment, building, vehicles, furniture, long-term
investments, intangible assets

2. Liabilities. Obligation of the business outside parties; also results of past and valid events.
 this element is the obligation of the business outside parties who have furnished resources (or what
the business owed)
 its characteristics are:
o this represents the business obligations
o it signifies the transfer of economic benefit (this could be a transfer of cash or other property)
o like assets, these are the results of past and valid events
o there is a complementary nature of assets and liabilities (like mirror images of each other—
meaning, if there is an effect on assets, there has to be in any way effect on liabilities
 ex: current– accounts payable, notes payable, accrued expenses, accrued liabilities, unearned
income, current position of long-term debt
 ex: non-current– mortgage payable, bonds payable, long-term notes payable

3. Owner’s Equity. Residual interest in the assets of the business after deducting all its liabilities; also known
as net assets.
 it is defined as the residual interest in the assets of the business after deducting all its liabilities (or
also known as net assets)
 other term is investments
 this may pertain to the following:
o sole proprietorship and partnership – capital (or investment net of withdrawal) of the
proprietor and/or partners
o cooperative – members’ contribution
o corporation – stockholders’ equity
 in a way, this is also an obligation of the business to the owner(s)
 this element is influenced with the profit or loss of the business
 for a corporation, the stockholders’ equity is also affected with the dividend that the business
declares during the period
 ex: capital, withdrawals, income summary

The elements that are directly related to the measurement of the financial performance in the income statement of
the business are—

4. Income. Benefits earned by the business for the services rendered or delivery of goods.
 it increases in economic benefits during the accounting period in the form of inflows or
enhancements of assets, or decreases of liabilities that result in increases in equity
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 this encompasses both revenue (income that arises in the course of the ordinary activities of a
business) and gains (increase in economic benefits that is not from the ordinary course of the
business)
 ex: sales, revenue from services rendered (service revenue), income on room accommodation (rent
income), gain

5. Expenses. It decreases the economic benefits in the form of outflows or depletion of assets; it is also the
incurrence of liabilities which result to a decrease in equity.
 it decreases in economic benefits during the accounting period in the form of outflows or depletion of
assets or incurrence of liabilities that result in decrease in equity, other than those relating to
distributions to equity participants
 this encompasses the expenses that arise in the course of the ordinary activities of the business,
losses that represent other items that is not in the ordinary course of the business, and cost of goods
sold or services rendered
 ex: selling expenses, cost of sales, advertising expenses, etc.

Five Basic Financial Statements (According to the Sequence of Preparation)

Financial Statements are the final results or output of accounting. They contained the financial information/data
processed by accounting which are relayed to the different users for whatever use they are to them.

The proper sequence in the preparation of the financial statements are as follows:

1. Income Statement. It shows the results of the business’ operations, which may be in the form of profit, loss,
or breakeven.
 known as Statement of Comprehensive Income for the Period
 presents a summary of the revenues or income and expenses of an entity for a specific period
 it shows the results of the business’ operations, which may be—
 profit (revenue or income > expenses)
 loss (revenue or income < expenses)
 breakeven (revenue or income = expenses)
 note: in accounting, loss is written with a parenthesis

2. Statement of Changes in Owner’s Equity. It summarizes the changes that occurred in the owner’s equity;
movement of investment or interest of the owner.
 summarizes the changes that occurred in the owner’s investment or capital to the business.
 the owner’s equity can be affected by the following:
 results of the operations of the business (sole proprietorship)
o profit (+)
o loss (-)
o breakeven (no effect)
 additional investments (+)
 withdrawals or drawings of the owners (-)

3. Balance Sheet. It discloses the financial position or net worth of the business.
 otherwise known as the Statement of Financial Position
 it also discloses the financial position or condition or net worth of the business by listing its total
assets, liabilities, and owner’s equity
 it may be presented through report form wherein the assets, liabilities, and owner’s equity are simply
listed in a vertical sequence
 or through account form where the assets are listed in the left side of the report and the liabilities and
owner’s equity are on the right side of the report

4. Statement of Cash Flows. It classifies cash receipts (inflows) and cash payments (outflows) into operating,
investing, and financing activities.
 provides the information about the total cash receipts and cash payment of the business during a
period
 in the statement, the cash receipts are classified as inflows, while the cash payments are the
outflows
 these are the three activities disclosed in this statement
1. operating
2. investing
3. financing
 it indicates the net increase and decrease in cash during the period and the cash balance at the end
of that specific period
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5. Notes to the Financial Statements. The only narrative report which includes explanations containing the
significant information relating to the different financial statements.
 otherwise known as Disclosures
 the only narrative report which includes the explanations of what are the significant information that
relates to the different statements
 it doesn’t involve any computations, figures, or amounts

Explanation on the Sequence of Preparation (Financial Statement)

1. income statement. reports all the income and expenses; profit or loss is the final figure in this statement
 income - expenses
 (=) results of the operations

2. statement of changes in owner’s equity. considers the profit or loss figure from the income statement as
one of the determining factors that explains the change in owner’s equity
 owner’s equity, beg. + additional investment - drawing +/- results of the operations
 owner’s equity, end

3. balance sheet. reports the ending owner’s equity, taken directly from the statement of changes in owner’s
equity.
 assets (includes cash which balance is supported in the statement of cash flows)
 (=) liabilities + owner’s equity

4. statement of cash flows. reports the net increase or decrease in cash during the period and ends with the
cash balance reported in the balance sheet
 this statement is prepared based on information from the income statement and balance sheet

Rules on Debit and Credit

 debit
o Value received
o Found on the left side of a T-account
o Increase Assets and Expenses.
o Decrease Liabilities, Owner’s Equity and Income or Revenue
 credit
o Value parted with
o Found on the right side of a T-Account
o Increase Liabilities, Owner’s Equity and Income or Revenue
o Decrease Assets and Expenses

ELEMENT DEBIT CREDIT NORMAL BALANCE

Assets + - Debit
Liabilities - + Credit
Owner’s Equity - + Credit
Income - + Credit
Expense + - Debit
Owner’s Withdrawal + - Debit

Basic Accounting Equation

 assets = liabilities + owner’s equity

 assets = liabilities + (owner’s capital – owner’s withdrawal + income – expenses)
o expanded accounting equation: owner’s equity is affected by these accounts (one that has
parenthesis above)

Solve the Following:

If asset of P1,200,000.00 increased by 50% and Owner’s Equity of P200,000.00 increased to P250,000.00, how
much will the liability be?

 A = P1,200,000.00 x 50% = P600,000 + P1,200,000.00 = P1,800,000.00

 OE = P250,000.00
 L = P1,800,000.00 - P250,000.00 = P1,550,000.00

If the liability is equivalent to 40% of the total asset and the owner’s equity is equal to P75,000.00, how much is
the total asset?
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 A = P75,000.00 / 60% = P125,000.00

 OE = P75,000.00
 L = P125,000.00 - P75,000.00 = P50,000.00

Formula on the Results of the Operations of the Business

 revenue or income - expenses = profit/loss or break even

 Profit = R/I > E
 Loss = R/I < E
 Breakeven = R/I = E (if your income/revenue is just enough for your expenses)

Formula to Compute OE, Beginning

 capital (OE), end + expenses - income = capital (OE), beginning

Formula to Compute OE, End

 capital (OE), beginning + additional investment + profit - drawing - loss = capital (OE), end
 assets - liabilities = capital (OE), end

Types of Business

1. Service-Oriented Business
 its product is the service rendered, skills, knowledge, or expertise
 ex: spa, law firm, accounting firm, car repair shop, barber shop

2. Merchandising or Trading Business

 it sells finished products which the business buys (no alteration).
 ex: sari-sari store, mobile phone reseller, car reseller, grocery store

3. Manufacturing Business
 it processes inputs to form finished goods which they sell later
 ex: car manufacturer, textile company, food products maker

4. Agriculture Business
 this business is those who do the actual planting of the produce, do the fishing, raise poultry or
cattle, piggery, etc. and sell whatever their produce

5. Hybrid Business
 the business which has two or more types of business
 ex: bake shop which produce their pastries (manufacturing) and sells soda or other drinks
(merchandising)

Forms of Business Organizations

Any forms of business organizations can do any type of business. There is no limitation.

1. Sole Proprietorship
 owned by one person called the proprietor
 it is also the easiest to form (there is no conflict of interest)
 the government only requires simple and few requirements (no need to report to SEC)

2. Partnership
 owned by two or more persons called the partners
 it can be formed formally (with a written agreement) or informally (may be formed even with a mere
handshake)
 if one is practicing their profession, you should not gain from that (several doctors working in a clinic)

3. Corporation
 owned by share/stockholders
 owned by 5 or more persons; but supposedly form by at least 15 individuals
 stock corporation – shares of stock are evidence of their ownership
 non-stock corporation – does not issue shares of stock. Usually owned by a certain community
which shares something in common (ex. USJR, INC.)
o owners are called members
 Philippine already allowed one-man corporations but with limitations

4. Cooperative
 owners are called members
 an organization which intention is to help the members augment their livelihood
 they joined the organization voluntarily
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 UK has many cooperatives (have many benefits: tax exemption or reduction)

3 Parts of a Journal Entry

DEBIT
CREDIT
BRIEF EXPLANATION

Transaction Analysis

1. Mr. A invested P25,000.00 cash in a business.

DEBIT CASH P25,000.00

CREDI A, CAPITAL P25,000.00
T
2. Z Marketing collected the account of B Enterprise amounting to P10,000.00.

DEBIT CASH P10,000.00

CREDIT ACCOUNTS RECEIVABLE P10,000.00
3. Maria purchased office supplies on credit for P5,000.00.

DEBIT OFFICE SUPPLIES P5,000.00

CREDIT ACCOUNTS PAYABLE P5,000.00
4. L Company purchased a truck for P1,000,000.00 paying only P500,000.00 and the rest to be paid at the end
of the year.

DEBIT TRUCK P1,000,000.00

CREDIT CASH P500,000.00
CREDIT ACCOUNTS PAYABLE P500,000.00
5. Company A paid its account with Company B for P5,000.00.

DEBIT ACCOUNTS PAYABLE P5,000.00

CREDIT CASH P5,000.00
10 Steps of The Accounting Cycle

1. Transaction Analysis
2. Journalizing
3. Posting
4. Preparation of The Trial Balance
5. Preparation of The Worksheet
6. Preparation of The Financial Statements
7. Adjusting Entries
8. Closing Entries
9. Preparation of Post-closing Trial Balance
10. Reversing Entries

2 Types of Trial Balance and their Differences

1. TRIAL BALANCE OF TOTALS. discloses the total debits and total credits of each account

o (Note: even account with zero balance as long as it has debit and/or credit entries are included)

2. TRIAL BALANCE OF BALANCES. discloses the balances of each account

o (Note: this does not include accounts with zero balance)

3 Kinds of Trial Balance

1. Unadjusted Trial Balance

2. Adjusted Trial Balance
3. Post-closing Trial Balance (only permanent accounts)

What are the Nominal or Temporary Accounts?

 They are accounts that are closed to the income summary at the end of the accounting period.
 These are accounts found in the income statement, namely: revenue/income and expenses.
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What are the Real or Permanent Accounts?

 They are accounts that are not to be closed.

 These are accounts found in the balance sheet, namely: assets, liabilities and owner’s equity.

4 Closing Entries Prepared by the Business

1. To close the Income or Revenue Accounts to the Income and Expense Summary.
Debit: All Income Accounts ; Credit: Income & Expense Summary

2. To close the Expense Accounts to the Income and Expense Summary.

Debit: Income & Expense Summary ; Credit: All Expense Accounts

3. To close the Income and Expense Summary to the Capital Account.

If the balance of the Income and Expense Summary is Debit:
Debit: Capital ; Credit: Income & Expense Summary
But if the balance of the Income and Expense Summary is Credit:
Debit: Income & Expense Summary ; Credit: Capital

4. To close the Drawing Account to Capital Account.

Debit: Capital ; Credit: Drawing

Identify the Following

INCOME AND EXPENSE SUMMARY

(1) Total
DEBIT SIDE CREDIT SIDE
(1) P 530,000.00 (2) P 980,000.00

Expenses
(2) Total Income/Revenue
(3) Result of the Business is PROFIT

Discuss Any Information about the Father of Accounting

 He is Fray Luca Pacioli, a mathematician and Italian Franciscan monk.

 He wrote about venetian way of business that also describe the double-entry bookkeeping.

What are the different books of account and when are they used?

 Journal or General Journal. the book of original entry and used during the Journalizing or Recording.
 Ledger or General Ledger. the book of final entry and used during the Posting or Classifying.

Name At Least Two (2) Source Documents Used in Analyzing the Transactions

1. Official Receipt
2. Sales Invoice
3. Checks
4. Deposit slips

What are accounts to be reversed? When are they reversed?

 All accrual accounts. They are usually reversed at the beginning of the next accounting period.

Cost Principle

 It states that all assets should be booked at its original or acquisition cost.

Matching Principle

 It states that all expenses must be recognize when it is incurred and all income or revenue when they are
earned.

Identify the Elements, Normal Balance and Compute for the Capital Beg. and End.

ACCOUNT NAME AMOUNT ELEMENT

Accounts Receivable ₱10,000.00 A – DEBIT
Accrued Salaries ₱25,000.00 L – CREDIT
Accounts Payable ₱200,000.00 L – CREDIT
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Cash in Bank ₱750,000.00 A – DEBIT

Computer ₱25,000.00 A – DEBIT
Depreciation Expense ₱8,000.00 E – DEBIT
Furniture & Fixture ₱17,500.00 A – DEBIT
Insurance Expense ₱10,000.00 E – DEBIT
Prepaid Rent ₱12,000.00 A – DEBIT
Rent Expense ₱2,000.00 E – DEBIT
Truck ₱65,000.00 A – DEBIT
Salaries Expense ₱27,500.00 E – DEBIT
Service Revenue ₱350,000.00 I/R – CREDIT
Utilities Expense ₱30,000.00 E – DEBIT

Total Assets ₱879,500.00 OE, End = A - L

Total Liabilities ₱225,000.00 ₱654,500.00
Total Owner’s Equity ₱654,500.00
Total Revenue ₱350,000.00 Profit = R - E
Total Expenses ₱77,500.00 ₱272,500.00
Profit ₱272,500.00 OE, Beg. = OE, End + E - I
₱382,000.00

4 Types of Transactions

1. Source of Assets (SA). An asset account increases and a corresponding claims (liabilities or owner’s
equity) increases.
2. Exchange of Assets (EA). One asset account increases and another asset account decreases.
3. Use of Assets (UA). An asset account decreases and a corresponding claims (liabilities or owner’s equity)
decreases.
4. Exchange of Claims (EC). One claims (liabilities or owner’s equity) increases and another claims (liabilities
or owner’s equity) decreases.

2 Source of Assets (↑ ↑) Asset Increase Liabilities / Owner’s Equity Increase

1 Exchange of Assets (↑ ↓) Asset Increase Asset Decrease
Liabilities / Owner’s Equity
2 Use of Assets (↓ ↓) Asset Decrease
Decrease
Liabilities / Owner’s Equity
4 Exchange of Claims (↑ ↓) Liabilities / Owner’s Equity Increase
Decrease

9 Effects of Transactions

1. SA: Increase in Assets = Increase in Liabilities

2. SA: Increase in Assets = Increase in Owner’s Equity
3. EA: Increase in one Asset = Decrease in another Asset
4. UA: Decrease in Assets = Decrease in Liabilities
5. UA: Decrease in Assets = Decrease in Owner’s Equity
6. EC: Increase in Liabilities = Decrease in Owner’s Equity
7. EC: Increase in Owner’s Equity = Decrease in Liabilities
8. EC: Increase in one Liability = Decrease in another Liability
9. EC: Increase in one Owner’s Equity = Decrease in another Owner’s Equity
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SAMPLE PROBLEMS
Journalize

1. ABC purchased a second-hand delivery van amounting to P1,000,000.00 paying down payment of
P250,000.00, issuing a promissory note in the amount of P500,000.00 and the balance payable at the end of
the year.

DEBIT DELIVERY VAN P1,000,000.00

CREDIT CASH P250,000.00
NOTES PAYABLE P500,000.00
ACCOUNTS PAYABLE P250,000.00
To record purchase of a second-hand delivery van.
2. Purple Enterprise paid their annual insurance for P120,000.00 starting June 1, 2020. The business uses the
asset method in this transaction. They are also using the calendar period.

DEBIT PREPAID INSURANCE P120,000.00

CREDIT CASH P120,000.00
To record payment of annual insurance for June 1,
2020 to May 31, 2021.
3. Purple Enterprise paid their annual insurance for P120,000.00 starting June 1, 2020. The business uses the
asset method in this transaction. Using calendar period, what will be the adjusting entry on December 31,
2020.

DEBIT INSURANCE EXPENSE P70,000.00

CREDIT PREPAID INSURANCE P70,000.00
To adjust prepaid annual insurance for June 1 to
December 31, 2020.
4. Photo Company is commissioned to document the preparation of the Plant International Conference from
January 1 to March 31, 2021. They were paid for their services on December 1, 2020 the contract amount
of P150,000.00. The payment was recorded using the income method in the books of Photo Company.
(Please use Professional Fee.)

DEBIT CASH P150,000.00

CREDIT PROFESSIONAL FEE P150,000.00
To record advance payment for the Plant Int’l
Conference.
5. Photo Company is commissioned to document the preparation of the Plant International Conference from
January 1 to March 31, 2021. They were paid for their services on December 1, 2020 the contract amount
of P150,000.00. The payment was recorded using the Income method in the books of Photo Company.
Will there be an adjusting entry at the end of the accounting period on December 31, 2020? If yes, prepare
the adjusting entry.

DEBIT PROFESSIONAL FEE P150,000.00

CREDIT UNEARNED PROFESSIONAL FEE P150,000.00
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To adjust entry made on Dec. 1, 2020 representing

unearned professional fee.
6. (USING THE PROBLEM ON PHOTO COMPANY) What is the entry on the books of Plant International
Conference using the expense method on December 1, 2020? (Please use Documentation Expense.)

DEBIT DOCUMENTATION EXPENSE P150,000.00

CREDIT CASH P150,000.00
To record payment to Photo Company.

7. Will there be an adjusting entry at the end of their accounting period on December 31, 2020? If yes, prepare
the adjusting entry.

DEBIT PREPAID DOCUMENTATION EXPENSE P150,000.00

CREDIT DOCUMENTATION EXPENSE P150,000.00
To adjust entry made on Dec. 1, 2020 for the
advance payment to Photo Company.
8. Given the following data from the Aging of Receivables:

Current (1-30 days)

31-45 days P210,000.00
Past Due P175,000.00
P40,000.00
Prepare the adjusting entries based on the following policies:

A. Provision for the Allow. Uncollectible Account is 50% of the 31-45 days and 75% on the Past Due.

DEBIT UNCOLLECTIBLE ACCOUNT EXPENSE P117,500.00

CREDIT ALLOWANCE FOR UNCOLLECTIBLE ACCOUNT P117,500.00
B. Provision is equal to the amount of the Past Due accounts.

DEBIT UNCOLLECTIBLE ACCOUNT EXPENSE P40,000.00

CREDIT ALLOWANCE FOR UNCOLLECTIBLE ACCOUNT P40,000.00
9.

DATE SALVAGE
PROPERTY COST EUL
ACQUIRED VALUE
Service Car 05-01-2020 P550,000.00 5 years P5,000.00
Steel Cabinet 12-01-2019 P20,000.00 5 years P500.00
Air-Con Unit 06-01-2019 P67,000.00 3 years P1,000.00
A. Annual and monthly Depreciation of each property.

ANNUAL MONTHLY
PROPERTY
DEPRECIATION DEPRECIATION
Service Car P109,000.00 P9,083.33
Steel Cabinet P3,900.00 P325.00
Air-Con Unit P22,000.00 P1,833.33
B. Prepare the adjusting entry for the depreciation on Dec. 31, 2020.

DEBIT DEPRECIATION EXPENSE P98,566.64

CREDIT ACCUMULATED DEPRECIATION P98,566.64
C. Compute the respective Net Book Value of each property.

ACCUMULATED NET BOOK

PROPERTY COST
DEPRECIATION VALUE
Service Car P550,000.00 P72,666.64 P477,333.36
Steel Cabinet P20,000.00 P4,225.00 P15,775.00
Air-Con Unit P67,000.00 P34,833.31 P32,166.69
10. Purple Enterprise purchased P25,000.00 office supplies on June 5, 2020 as additional to their stocks on
hand worth P2,000.00. During the inventory count at the end of the month, what was on hand was only
worth P15,000.00 including P500.00 worth of damaged items. What is the adjusting entry for this account
using the asset method? Using the expense method?

A. Asset Method
DEBIT SUPPLIES EXPENSE P12,500.00
CREDIT OFFICE SUPPLIES P12,500.00
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B. Expense Method
DEBIT OFFICE SUPPLIES P14,500.00
CREDIT SUPPLIES EXPENSE P14,500.00
11. MMK Corp. paid their account with GMA Stores for P65,000.00 but booked it as debit to Accounts
Receivable instead of Accounts Payable.

WRONG ENTRY/ORIGINAL ENTRY:

ACCOUNTS RECEIVABLE P65,000.00
CASH P65,000.00
CORRECT ENTRY:
ACCOUNTS PAYABLE P65,000.00
CASH P65,000.00
CORRECTING ENTRY:
ACCOUNTS PAYABLE P65,000.00
ACCOUNTS RECEIVABLE P65,000.00

12. Summer Resort catered to Helen Trading for a package of P25,000.00 for Cash. But the services was
recorded as debit to Accounts Receivable instead of Cash for P15,000.00.

WRONG ENTRY/ORIGINAL ENTRY:

ACCOUNTS RECEIVABLE P15,000.00
SERVICE INCOME P15,000.00
CORRECT ENTRY:
CASH P25,000.00
SERVICE INCOME P25,000.00
CORRECTING ENTRY:
CASH P25,000.00
ACCOUNTS RECEIVABLE P15,000.00
SERVICE INCOME P10,000.00
13. Lay Enterprises pays salaries of P75,000.00 every 10th and 25th each month. Using the calendar period,
what will be their adjusting entry for the salaries at the end of the period?

DEBIT SALARIES EXPENSE P30,000.00

CREDIT ACCRUED SALARIES PAYABLE P30,000.00
14. Bank of Canada extended a six-month loan to VIP Co. in the amount of P150,000.00 with monthly interest
rate of 5% collected every 10th day of the following month. The principal and the corresponding interest will
be paid on August 31, 2021. What is their entry on the interest for March 2021?

DEBIT ACCRUED INTEREST RECEIVABLE P7,500.00

CREDIT INTEREST INCOME P7,500.00
15. Compute for the capital beg. and end.

ACCOUNT NAME AMOUNT

Accounts Receivable 10,000.00
Accrued Salaries 25,000.00
Accounts Payable 200,000.00
Cash in Bank 750,000.00
Computer 25,000.00
Depreciation Expense 8,000.00
Furniture & Fixture 17,500.00
Insurance Expense 10,000.00
Prepaid Rent 12,000.00
Rent Expense 2,000.00
Truck 65,000.00
Salaries Expense 27,500.00
Service Revenue 350,000.00
Utilities Expense 30,000.00
Assets P879,500.00 Capital End P654,500.00
Liabilities P225,000.00 Profit P272,500.00
Capital End P654,500.00 Capital Beg P382,000.00
Income P350,000.00
Expense P77,500.00
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Profit P272,500.00

16. Closing entries. Compute the balance of the income summary and capital end.

ACCOUNT NAMES AMOUNT

Delivery Expense 8,000.00
Depreciation Expense 15,500.00
A, Capital 210,000.00
A, Drawing 25,000.00
Insurance Expense 12,000.00
Miscellaneous Expense 375.00
Miscellaneous Income 2,100.00
Rent Expense 7,000.00
Salaries Expense 37,500.00
Service Revenue 100,500.00
Taxes and Licenses 10,000.00
Utilities Expense 5,000.00

INCOME EXPENSES
Service Revenue P 100,500.00 Delivery Expense P 8,000.00
Miscellaneous Income 2,100.00 Depreciation Expense 15,500.00
TOTAL P 102,600.00 Insurance Expense 12,000.00
Miscellaneous Expense 375.00
Rent Expense 7,000.00
Salaries Expense 37,500.00
Taxes and Licenses 10,000.00
Utilities Expense 5,000.00
TOTAL P 95,375.00
Income Summary Balance (Credit) A, Capital Balance End
P7,225.00 P 192,225.00