ABM-12

STI College
Cagayan de Oro City

Compilation of Accounting Process

In partial fulfillment of:
Fundamentals of Accountancy, Business Management 2

Submitted to:
MR. RUINO L. RENOBLAS, CPA, MBA

Submitted by:
NERVIE JOY V. MAESTRADO

Date: October 15, 201

 Table of Content

1. Accounting Problem

2. Chart of Accounts

3. Journal Entries

4. General Ledger

5. Trial Balance

6. Income Statement

7. Balance Sheet

8. Statement of Cash Flows

9. Statement of Changes in Owner’s Equity

10. Closing Entries

11. Post Closing Trial Balance

 FUNDAMENTALS OF ACCOUNTING FIRM

DON ACCOUNTING FIRM

DECEMBER

01  Mr. Don Ramos invested P500, 000 to start the business.

 The firm obtained a loan from Mars Bank amounting to P100, 000. The loan bears
6% annual interest payable every December 01 of the following year. The principal is
payable in two (2) equal annual installments.
 The firm paid P10, 000 for the necessary permits and licenses for its operation.
 P120, 000 was also paid by the firm for the annual rent of the office space. The lease
contract will expire on December 01 of the following year and will be renewed yearly.

02  Don Accounting Firm rendered service o Cinderella, Inc. worth P135, 000 on credit.
 Purchased supplies worth P5, 000.

08  Rendered service to Snow White Co. for P37, 500.

 Purchased a laptop in cash, P36, 000. The laptop has an estimated useful life of
three (3) years, with no residual value. The company treats purchases during the
first half of the mount as a purchase at the start of the month.
15 Cinderella, Inc. paid the firm.

17 Mr. Don Ramos withdrew P25, 000 for personal use.

20 Cygnus Catering billed the firm for P25, 000 for the services rendered to its holiday luncheon
for clients and staff.
22 Received P35, 000 cash in advance from Sleeping Beauty, Co. for the services that will be
rendered next year.
23 Rendered services to Queen Company on credit, P55, 000.

27 Rendered a taxation advice and billed the client, P20, 000.

31 Paid P15, 000 for the salary of its office staff and utilities worth P8, 000.
 CHART OF ACCOUTS
Account Account Name Account Account Name Account Account Name
Number Number Number
101 Cash 201 Accounts Payable 401 Professional Fees
102 Accounts 202 Notes Payable 501 Salaries Expense
Receivable
103 Office Supplies 203 Unearned Revenue 503 Utilities Expense
104 Prepaid Rent 301 D. Ramos, Capital 504 Representation Expense
105 Office Equipment 302 D. Ramos, Drawing 508 Permits and Licenses Expense
 JOURNAL ENTRIES

DATE PARTICULAR Ref. DEBIT CREDIT

Dec. 1 Cash 101 500,000
D. Ramos, Capital 301 500,000

Cash
Notes Payable 101 100,000
202 100,000

Permits and Licenses Expense 508 10,000

Cash 101 10,000

Prepaid Rent 104 120,000

Cash 101 120,000

Dec.2 Accounts Receivable 102 135,000

Professional Fees 401 135,000

Office Supplies 103 5,000

Cash 101 5,000

Dec.8 Cash 101 37,500

Professional Fees 401 37,500

Office Equipment 105 36,000

Cash 101 36,000

Dec.15 Cash 101 135,000

Accounts Receivable 102 135,000

Dec.17 D. Ramos, Drawing 302 25,000

Cash 101 25,000

Dec.20 Representation Expense 504 25,000

Accounts Payable 201 25,000

Dec.22 Cash 101 35,000

Unearned Revenue 203 35,000

Dec.23 Accounts Receivable 102 55,000

Professional Fees 401 55,000

Dec. Accounts Receivable 102 20,000

27
Professional Fees 401 20,000

Dec.31 Salaries Expense 501 15,000

Utilities Expense 503 8,000
Cash 101 23,000
 GENERAL LEDGER

101 Cash 202 Notes Payable

12-01 500,000 12-01 10,000 12-01 100,000
12-01 100,000 12-01 120,000
12-08 37,000 12-02 5,000
12-15 135,000 12-08 36,000 203 Unearned Revenue
12-22 35,000
12-22 35,000 12-17 25,000
12-31 23,000
301 D. Ramos, Capital
807,500 219,000
12-01 500,000
588,500

302 D. Ramos, Drawing

12-17 25,000
102 Accounts Receivable
12-02 135,000 12-15 135,000
12-23 55,000 401 Professional Fees
12-27 20,000 12-02 135,000
12-08 37,500
210,000 135,000
12-23 55,000
75,000 12-27 20,000
247,500

103 Office Supplies

12-02 5,000 501 Salaries Expense
12-31 15,000

104 Prepaid Rent

12-01 120,000
503 Utilities Expense
12-31 8,000

105 Office Equipment

12-08 36,000 504 Representation Expense
12-20 25,000

201 Accounts Payable 508 Permits and Licenses Expense

12-20 25,000
12-01 10,000
 DON ACCOUNTING FIRM
Trial Balance
As of December 31, 2018

Accounts Debit Credit

Cash 588,500.00
Accounts Receivable 75,000.00
Office Supplies 5,000.00
Prepaid Rent 120,000.00
Office Equipment 36,000.00
Accounts Payable 25,000.00
Notes Payable 100,000.00
Unearned Revenue 35,000.00
D. Ramos, Capital 500,000.00
D. Ramos, Drawing 25,000.00
Professional Fees 247,500.00
Salaries Expense 15,000.00
Utilities Expense 8,000.00
Representation Expense 25,000.00
Permit and License Expense 10,000.00
TOTAL 907,500.00 907,500.00
 DON ACCOUNTING FIRM
Statement of Changes in Owner's Equity
For the year ended December 31, 2018

D. Ramos, Capital - January 1, 2018 500,000.00

Add: Net Income for the period 189,500.00
Additional Capital -
Less: Drawings (25,000.00)
D. Ramos, Capital 664,500.00
 DON ACCOUNTING FIRM
Income Statement
For the year ended December 31,2018

Professional Fees 247,500.00

Less: Salaries Expense 15,000.00
Utilities Expense 8,000.00
Representation Expense 25,000.00
Permits and License Expense 10,000.00
Total Cost and Expense 58,000.00
Net Income/(Loss) 189,500.00
 DON ACCOUNTING FIRM
Balance Sheet
As of December 31, 2018

Current Assets:

Cash 588,500.00

Accounts Receivable 75,000.00

Office Supplies 5,000.00

Prepaid Rent 120,000.00

Total Current Assets 788,500.00

Non-Current Assets

Office Equipment 36,000.00

Total Non-current Assets 36,000.00

TOTAL ASSETS 824,500.00

Current Liabilities:

Accounts Payable 25,000.00

Notes Payable 100,000.00

Unearned Revenue 35,000.00

Total Current Liabilities 160,000.00

Owner's Equity:

D. Ramos, Capital 500,000.00

Less: D.Ramos, Drawing (25,000.00)

Add: Net Income for the period 189,500.00

Total Owner's Equity 664,500.00

TOTAL LIABILITIES AND OWNER'S

EQUITY 824,500.00
 DON ACCOUNTING FIRM
Statement of Cash Flows
For the year ended December 31, 2018

CASH FROM OPERATING ACTIVITIES:

Cash received from customers 207,500.00
Cash paid to suppliers 158,000.00
Net Cash received from Operating Activities 49,500.00

CASH FROM INVESTING ACTIVITIES:

Purchase of Property, Plant and Equipment 36,000.00
Net cash used by Investing Activities 36,000.00

CASH FROM FINANCING ACTIVITIES:

Proceeds from Cash Investment of Owners 500,000.00
Obtained Loan from Bank 100,000.00
Proprietor D. Ramos Withdrew Cash 25,000.00
Net Cash from Financing Activities 575,000.00
NET CHANGE IN CASH - Increase 588,500.00
ADD: Cash Balance - Beginning -
Cash Balance - Ending 588,500.00
 DON ACCOUNTING FIRM

Closing Entries

As of December 31, 2018

Professional Fees 247,500.00

Income Expense Summary 247,500.00

Income and Expense Summary 58,000.00

Salaries Expense 15,000.00

Utilities Expense 8,000.00

Representation Expense 25,000.00

Permit and License Expense 10,000.00

Income and Expense Summary 189,500.00

D. Ramos, Capital 189,500.00

D. Ramos, Capital 25,000.00

D. Ramos, Drawing 25,000.00

 DON ACCOUNTING FIRM
Post Closing Trial Balance
As of December 31, 2018

Accounts Debit Credit

Cash 588,500.00
Accounts Receivable 75,000.00
Office Supplies 5,000.00
Prepaid Rent 120,000.00
Office Equipment 36,000.00
Accounts Payable 25,000.00
Notes Payable 100,000.00
Unearned Revenue 35,000.00
D. Ramos, Capital 664,500.00
TOTAL 824,500.00 824,500.00