University of Saint Louis Tuguegarao

Scholl of Business Administration and Accountancy

Anton Alvaro manages Team Tugui, a professional basketball team. Ledger

balances as of August 31 are as follows
110 Cash 1,129,800
121 Account receivable 3,712,500
131 Uniform supplies 31,050
141 Prepaid Insurance
150 Land 1,025,000
161 Training facilities 1,750,000
171 Training equipment 1,625,000
181 Player contracts 3,250,000
211 Accounts payable 3,725,000
221 Notes Payable 1,800,000
231 Mortgage Payable 1,500,000
310 Antonio capital 5,643,750
312 Antonio drawings 875,000
411 Gaming Revenue 5,125,000
511 Salary expense 1,875,000
512 Advertising expense 400,950
513 Travel expense 532,400
514 Laundry expense 528,000
515 Medical expense 194,550
516 Utilities expense 734,000
517 Miscellaneous expense 130,500

The following transactions transpired in the month of September:

Acquired from Justo Tama the contract of Team Afie for P1,875,000;
1-Sep
12% in cash and financing the balance by issuing a note.
2 Collected P2,809,500 on accounts receivable from season-ticket holders
5 Settled accounts payable, P1,657,500 and paid TV advertising, P78,600
Acquired on account additional uniforms for the upcoming series of
8
competitions, P30,750
10 Billed season-ticket holders for the last five games, P320,250
13 Paid the amount due on this date for a note payable, P600,000
14 Acquired insurance for the months of September to December, 215,280
Acquired additional training equipment on account, P319,500. Useful
15
life is 12 months with no scrap value
19 Paid players’ salaries, P1,136,250
20 Received P3,316,050 cash for tickets to playoff games
22 Paid travel expenses to various provinces, P558,000
Paid laundry expenses P12,600; medical expense P18,900; utilities
24
expense P210,450
27 Paid players’ salaries, P1,240,650 and miscellaneous expense P26,850
29 Paid creditors, P941,850
30 Anton Alvaro withdrew P250,000
 The training facility was acquired on July 1 of the current year. It is
30 estimated to have a useful life of 25 months but no depreciation have
been recorded to date.
The training equipment in the August 31 balances were purchased on
30 August 1 with a useful life of 20 months. No depreciation has not been
recorded to date.

Required:
1 Record the transactions (15pts)
2 Post entries and prepare a trial balance (25 pts)
3 Prepare the adjusting entries (3pts)
Prepare the Financial Statements - Statement of Income. Statement of
4
Financial Position and Statement of Changes in Equity. (13pts)
5 Prepare the closing entries (4pts)

ANSWERS
Team Tugui
Journal Entries
For the month of September 2020
1-Sep Players contract P 1,875,000
Cash P 225,000
Notes Payable 1,650,000
Acquired contract from Justo Tama;
12% down payment
2 Cash 2,809,500
Accounts Receivable 2,809,500
Collection from season-ticket holders
5 Accounts Payable 1,657,500
Advertising Expense 78,600
Cash 1,736,100
Paid creditors and TV advertisement
8 Uniform supplies 30,750
Accounts Payable 30,750
Purchase of uniforms for upcoming
competitions
10 Accounts Receivable 320,250
Gaming Revenue 320,250
Billed season-ticket holders
13 Notes Payable 600,000
Cash 600,000
Paid notes payable due
14 Prepaid Insurance 215,250
Cash 215,250
Insurance for September to December
15 Training Equipment 319,500
Accounts Payable 319,500
Acquired additional training equipment
19 Salary expense 1,136,250
Cash 1,136,250
Payment of players’ salaries
Sept 20 Cash 3,316,050
Gaming Revenue 3,316,050
Sale of tickets for playoff games
22 Travel expense 558,000
Cash 558,000
Travel expenses to various provinces
24 Laundry expense 12,600
Medical expense 18,900
Utilities expense 210,450
Cash 241,950
Payment of game related expenses
27 Salaries expense 1,240,650
Miscellaneous expense 26,850
Cash 1,267,500
Paid players’ salaries and
miscellaneous expenses
29 Accounts Payable 941,850
Cash 941,850
Paid creditors
30 Alvaro, Drawing 250,000
Cash 250,000
Withdrawal of the owner

Team Tugui
Posting to the Ledger Accounts
For the month of September 2020
(Amounts in Philippine Peso)
110 CASH
Date Particulars debit Credit debit credit
Sept 1 Balance forwarded 1,129,800
Acquired contract from Justo Tama; 225,000 904,800
1
12% down payment
2 Collection from season-ticket holders 2,809,500 3,714,300
5 Paid creditors and TV advertisement 1,736,100 1,978,200
13 Paid notes payable due 600,000 1,378,200
14 Insurance for September to December 215,280 1,162,920
19 Payment of players’ salaries 1,136,250 26,670
20 Sale of tickets for playoff games 3,316,050 3,342,720
22 Travel expenses to various provinces 558,000 2,784,720
24 Payment of game related expenses 241,950 2,542,770
27 Paid players’ salaries and miscellaneous 1,267,500 1,275,270
29 Paid creditors 941,850 333,420
30 Withdrawal of owner 250,000 83,420

121 ACCOUNTS RECEIVABLE

Date Particulars debit Credit Debit credit
Sept 1 Balance forwarded 3,712,500
2 Collection from season-ticket holders 2,809,500 903,000
10 Billed season-ticket holders 320,250 1,223,250
 131 UNIFORM SUPPLIES
Date Particulars debit Credit Debit credit
Sept 1 Balance forwarded 31,050
Purchase of uniforms for upcoming 30,750 61,800
8
competitions

141 PREPAID INSURANCE

Date Particulars debit Credit Debit Credit
Sept 14 Insurance for September to December 215,280 215,280
30 Month-end adjustment 53,820 161,460

150 LAND
Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 1,025,000

161 TRAINING FACILITIES

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 1,750,000

162 ACCUMULATED DEPRECIATION – TRAINING FACILITIES

Date Particulars debit Credit Debit Credit
Sept 30 Month-end adjustment 210,000 210,000

171 TRAINING EQUIPMENT

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 1,625,000
15 Acquired additional training equipment 319,500 1,944,500

172 ACCUMULATED DEPRECIATION – TRAINING EQUIPMENT

Date Particulars debit Credit Debit credit
Sept 30 Month-end adjustment 162,500 162,500
30 Month-end adjustment 13,312.50 175,812.5

181 PLAYER CONTRACTS

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 3,250,000
Acquired contract from Justo Tama; 1,875,000 5,125,000
1
12% down payment

211 ACCOUNTS PAYABLE

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 3,725,000
5 Paid creditors and TV advertisement 1,657,500 2,067,500
Purchase of uniforms for upcoming 30,750 2,098,250
8
competitions
15 Acquired additional training equipment 319,500 2,417,750
29 Paid creditors 941,850 1,475,900
 221 NOTES PAYABLE
Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 1,800,000
Acquired contract from Justo Tama; 1,650,000
1
12% down payment
13 Paid notes payable due 600,000 2,850,000

231 MORTGAGE PAYABLE

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 1,500,000

310 ALVARO CAPITAL

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 5,643,750.00
30 To close income for the month 643,967.5 6,287,717.50
30 To close Alvaro Drawing 1,125,000 5,162,717.50

312 ALVARO DRAWING

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 875,000
30 Withdrawal of owner 250,000 1,125,000
30 To close to Alvaro Capital 1,125,000 0

411 GAMING REVENUE

Date Particulars Debit Credit Debit Credit
Sept 1 Balance forwarded 5,125,000
10 Billed season-ticket holders 320,250 5,445,250
20 Sale of tickets for playoff games 3,316,050 8,761,300
30 To close to Income Summary 8,761,300 0

511 SALARY EXPENSE

Date Particulars Debit Credit Debit Credit
Sept 1 Balance forwarded 1,875,000
19 Payment of players’ salaries 1,136,250 3,011,250
27 Paid players’ salaries and miscellaneous 1,240,650 4,251,900
30 To close to Income Summary 4,251,900 0

512 ADVERTISING EXPENSE

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 400,950
5 Paid creditors and TV advertisement 78,600 479,550
30 To close to Income Summary 479,550 0

513 TRAVEL EXPENSES

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 532,400
22 Travel expenses to various provinces 558,000 1,090,400
30 To close to Income Summary 1,090,400 0
 514 LAUNDRY EXPENSE
Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 528,000
24 Payment of game related expenses 12,600 540,600
30 To close to Income Summary 540,600 0

515 MEDICAL EXPENSES

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 194,550
24 Payment of game related expenses 18,900 213,450
30 To close to Income Summary 213,400 0

516 UTILITIES EXPENSE

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 734,000
24 Payment of game related expenses 210,450 944,450
30 To close to Income Summary 944,450 0

517 INSURANCE EXPENSE

Date Particulars debit Credit Debit Credit
Sept 30 Month-end Adjustments 53,820 53,820
30 To close to Income Summary 53,820 0

518 DEPRECIATION EXPENSE

Date Particulars debit Credit Debit Credit
Sept 30 Month-end adjustment – training facility 210,000 210,000
Month-end adjustment– training 162,500 372,500
30
equipment
Month-end adjustment– training 13,312.50 385,812.50
30
equipment
30 To close to Income Summary 385,812.50 0

519 MISCELLANEOUS EXPENSE

Date Particulars debit Credit Debit Credit
Sept 1 Balance forwarded 130,500
27 Paid players’ salaries and miscellaneous 26,850 157,350
30 To close to Income Summary 157,350 0

550 INCOME SUMMARY

Date Particulars debit Credit Debit Credit
Sept 30 To close Income 8,761,300 8,761,300.00
30 To close expenses 8,117,332.50 643,967.50
30 To close to Alvaro Capital 643,967.50 0
 Team Tugui
Unadjusted Trial Balance
September 30, 2020
110 Cash P 83,420
121 Account receivable 1,223,250
131 Uniform supplies 61,800
141 Prepaid Insurance 215,280
150 Land 1,025,000
161 Training facilities 1,750,000
171 Training equipment 1,944,500
181 Player contracts 5,125,000
211 Accounts payable P 1,475,900
221 Notes Payable 2,850,000
231 Mortgage Payable 1,500,000
310 Alvaro, capital 5,643,750
312 Alvaro, drawings 1,125,000
411 Gaming Revenue 8,761,300
511 Salary expense 4,251,900
512 Advertising expense 479,550
513 Travel expense 1,090,400
514 Laundry expense 540,600
515 Medical expense 213,450
516 Utilities expense 944,450
517 Insurance Expense
518 Depreciation
519 Miscellaneous expense 157,350
Total P 20,230,950 P 20,230,950

Team Tugui
Adjusting Journal Entries
September 2020
Sept 30 Insurance Expense P 53,820
Prepaid Insurance P 53,820
30 Depreciation 210,000
Accumulated Depreciation – Training 210,000
Facility
30 Depreciation 162,500
Accumulated Depreciation – Training 162,500
Equipment
30 Depreciation 13,312.50
Accumulated Depreciation – Training
Equipment 13,312.50
 Team Tugui
Statement of Income
For the Month of September 2020
411 Gaming Revenue P 8,761,300.00
511 Salary expense P 4,251,900.00
512 Advertising expense 479,550.00
513 Travel expense 1,090,400.00
514 Laundry expense 540,600.00
515 Medical expense 213,450.00
516 Utilities expense 944,450.00
517 Insurance Expense 53,820.00
518 Depreciation 385,812.50
519 Miscellaneous expense 157,350.00 8,117,332.50
Net Income P 643,967.50

Team Tugui
Statement of Changes in Equity
For the Month of September 2020
310 Alvaro, Capital 8/31/2020 P 5,643,750.00
Additional Investment 0
Net Income 643,967.50
312 Alvaro, Drawing 1,125,000.00
Alvaro Capital 9/30/2020 P 5,162,717.50

Team Tugui
Statement of Financial Position
September 30, 2020
ASSETS
110 Cash P 83,420.00
121 Account receivable 1,223,250.00
131 Uniform supplies 61,800.00
141 Prepaid Insurance 161,460.00 P1,529,930.00
150 Land 1,025,000.00
161 Training facilities P 1,750,000.00
Accumulated Depreciation- 210,000.00 1,540,000.00
162
Training Facility
171 Training equipment P 1,944,500.00
Accumulated Depreciation- 175,812.50 1,768,687.50
172
Training Equipment
181 Player contracts 5,125,000.00 9,458,687.50
Net Asset P 10,988,617.50

Liabilities and Owner’s Equity

211 Accounts payable P 1,475,900.00
221 Notes Payable 2,850,000.00 P 4,325,900
231 Mortgage Payable 1,500,000 5,825,900.00
310 Alvaro, capital 5,162,717.50
Total Liabilities and
P 10,988,617.50
Owner’s Equity
 Team Tugui
Closing Entries
September 30, 2020
Sept 30 Gaming Revenue P 8,761,300
Income Summary P 8,761,300
30 Income Summary 8,117,332.50
Salary expense 4,251,900.00
Advertising Expense 479,550.00
Travel Expense 1,090,400.00
Laundry expense 540,600.00
Medical expense 213,450.00
Utilities expense 944,450.00
Insurance expense 53,820.00
Depreciation expense 385,812.50
Miscellaneous expense 157,350.00
30 Income Summary 643,967.50
Alvaro, Capital 643,967.50
30 Alvaro, Capital 1,125,000.00
Alvaro, Drawing 1,125,000.00

Team Tugui
Post-Closing Trial Balance
September 30, 2020
110 Cash P 83,420
121 Account receivable 1,223,250
131 Uniform supplies 61,800
141 Prepaid Insurance 161,460
150 Land 1,025,000
161 Training facilities 1,750,000
162 Accumulated Depreciation P 210,000
171 Training equipment 1,944,500
172 Accumulated Depreciation 175,812.50
181 Player contracts 5,125,000
211 Accounts payable 1,475,900
221 Notes Payable 2,850,000
231 Mortgage Payable 1,500,000
310 Alvaro, capital
5,162,717.50
Total P 11,374,430 P 11,374,430