URDANETA CITY UNIVERSITY

San Vicente West, Urdaneta City Pangasinan

FIRST SEMESTER - A.Y. 2024-2025

Practice Set #1
Service Business

Miss Merry Heart Duque opened “Duque Auditing Firm” on September 1, 2024.
Miss Duque completed the following transactions:

Sept. 2 Miss Duque invested P3,500,000 in her newly opened Auditing Firm.
She acquired land for future building site, P2,500,000, by paying
2 cash of P1,500,000 and by issuing a 3-year 18% note payable
(interest is payable annually) for the P1,000,000 balance.
2 She purchased 3 computer sets on account, P375,000.
Miss Duque invested her personal tables and chairs with fair value of
3 P150,000.
3 She purchased P175,000 worth of office supplies for cash. (Use
Asset Method)
3 Miss Duque acquired cabinets worth P250,000 for cash.
She acquired loan from City Savings Bank worth P1,500,000 for her
4 newly opened Auditing Firm.
She purchased a brand new car for the newly opened Auditing Firm
4 for P1,000,000 cash.
4 Paid P6,000 insurance for one year. (Use Asset method)
She updated his membership with the Philippine Institute of Certified
5 Public Accountant (PICPA) by paying P1,000.
6 She purchased additional tables and chairs for P310,000 cash.
10 Received 350,000 cash from customers for services rendered.
11 Billed customers for services rendered, P275,000.
13 Paid gasoline worth P10,000 cash.
13 Paid 1/3 of computer sets made on account on September 2.
13 Paid salaries for the first half of September, P175,000.
24 Received cash from billed customers on September 11, P175,000.
24 Received P305,000 cash from customers for services rendered.
25 Billed customers for services rendered, P255,000.
30 Paid utility bills, P30,000.
30 Received cash from billed customers on September 25, P155,000.
Received the remaining balance of customers billed on September
30 11.
30 Paid office rent for one year, P120,000. (Use Asset method)
30 Withdrew P450,000 cash for personal use.
30 Paid salaries for the second half of September, P175,000.
 Chart of Accounts
Balance Sheet Income Statement
Assets Income
110 Cash 410 Professional Fees
120 Accounts Receivable Expense
130 Office Supplies 505 Salaries Expense
140 Prepaid Rent 510 Office Supplies Expense
150 Prepaid Insurance 515 Rent Expense
Depreciation Expense –
160 Land 520 Computer Equipment
Depreciation Expense –
170 Computer Equipment 525 Transportation Equipment
Accumulated Depreciation – Depreciation Expense –
175 Computer Equipment 530 Furniture and Fixtures
180 Transportation Equipment 535 Utilities Expense
Accumulated Depreciation –
185 Transportation Equipment 540 Association Dues Expense
190 Furniture and Fixtures 545 Interest Expense
Accumulated Depreciation –
195 Furniture and Fixtures 550 Gasoline Expense
Liabilities 555 Insurance Expense
210 Accounts Payable 560 Miscellaneous Expense
220 Notes Payable
230 Salaries Payable
240 Interest Payable
Equity
310 Duque, Capital
320 Duque, Withdrawals
330 Income Summary

Required:
1. Record the transactions in the General Journal.
2. Post the journal entries in the General Ledger.
3. Prepare the Trial Balance.
4. Prepare the adjusting journal entries for the following adjustments.
Record in the General Journal, then post to the General Ledger.
a. Inventory of office supplies at the end of September
amounted to P25,000.
b. Rent for the month has expired.
c. Computer Equipment has an estimated useful life of 5 years.
d. Furniture and Fixtures invested by Miss Duque has an estimated
useful life of 3 years.
e. Furniture and Fixtures purchased during the month of September
has an estimated useful life of 5 years with P10,000 salvage
value at the end of 5 years.
f. Transportation Equipment has an estimated useful life of 5 years
with P100,000 salvage value at the end of 5 years.
g. The P1,000,000 notes payable was issued on September 2, 2024
with an annual interest rate of 18%.
h. Salaries are paid on Fridays. The weekly payroll is P87,500.
The auditing firm has a 5-day work week. September 30 falls on a
Monday.
5. Prepare the ten-column worksheet.
6. Prepare the Financial Statements.
7. Prepare the closing entries. Record in the General Journal, then post to
the General Ledger.
8. Prepare the post-closing trial balance.
Prepared by:

REMEDIOS A. PALAGANAS, CPA, MBA

Noted:

PELILIA C. VELOSO, CPA, DBA, LLB