UY LAW OFFICE

York New City

Getting Started
On December 01, 2021, Atty. Jan B. Uy established his legal practice under the name “UY
LAW OFFICE”. He employs you as the bookkeeper for the said entity. During the month, Uy
Law Office had the following transactions:

Dec 01 Atty. Jan B. Uy invests P500,000 cash. Uy Law Office obtains a loan from Mars
Bank amounting to P100,000. The loan bears 6% annual interest payable every
December 1, starting December 1, 2021. The principal is payable in two equal
annual installments. Uy Law Office pays P10,000 for the necessary permits and
licenses for its operation. Uy Law Office pays P120,000 for the annual rent of the
office space. The lease contract will expire on December 1, 2021, and is
renewable annually.

Dec 02 Uy Law Office renders legal advice to Jo Deep. Uy Law Office bills Jo Deep for
P135,000. Uy Law Office purchases supply worth P5,000, on a cash basis.

Dec 08 Uy Law Office renders legal advice to Venus Co. for P37,000, on a cash basis.
Uy Law Office purchases a laptop for P36,000 cash. The laptop has an estimated
useful life of 3 years, with no residual value. The Company treats purchases
during the first half of the month as a purchase at the start of the month.

Dec 15 Jo Deep pays Uy Law Office.

Dec 17 Atty. Uy withdraws P25,000 from the law office for his personal use.

Dec 20 Cygnus Catering bills Uy Law Office for P25,000 for services rendered for the
company’s holiday luncheon for its clients and staff.

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UY LAW OFFICE
York New City

Dec 22 Uy Law Office receives P35,000 cash in advance from Jupiter Co. for legal
services to be rendered in 2022.

Dec 23 Uy Law Office renders legal service to Vega Co. for P55,000, on the account.

Dec 27 Uy Law Office renders taxation advice to Amber Hair. Uy Law Office bills Amber
Hair for P20,000.

Dec 31 Uy Law Office pays P15,000 for the salary of its accounting and office staff. Uy
Law Office also pays utilities of P8,000. Office supplies of P3,000 have been
used up by the law office.

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UY LAW OFFICE
York New City

Analysis of the Illustrative Case “UY LAW OFFICE”. The transactions in the case are analyzed
through the accounting equation.

Dec 01
Atty. Jan Uy invests P500,000 cash in Uy Law Office

Asset = Liabilities + Owner’s Equity

Cash 500,000 Jan Uy, Capital 500,000

Uy Law Office obtains a loan from Mars Bank amounting to P100,000. The loan bears 6%
annual interest payable every December 1, starting December 1, 2021. The principal is
payable in two equal annual installments.

Asset = Liabilities + Owner’s Equity

Cash 500,000 Notes Payable 500,000

Uy Law Office pays P10,000 for the necessary permits and licenses for its operation.

Asset = Liabilities + Owner’s Equity

Permit &
Cash (10,000) Licenses (10,000)
Expense

*Expense account

Uy Law Office pays P120,000 for the annual rent of the office space. The lease contract will
expire on December 1, 2021 and is renewable annually.

Asset = Liabilities + Owner’s Equity

Prepaid Rent 120,000

Cash (120,000)

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UY LAW OFFICE
York New City

Dec 02
Uy Law Office renders legal advice to Jo Deep. Uy Law Office bills Jo Deep for P135,000. Uy
Law Office purchases supply worth P5,000, on a cash basis.

Asset = Liabilities + Owner’s Equity

Accounts Professional
135,000 500,000
Receivable Fees*

*Revenue account

Uy Law Office purchases supply worth P5,000, on a cash basis.

Asset = Liabilities + Owner’s Equity

Office
5,000
Supplies

Cash (5,000)

Dc 08

Uy Law Office renders legal advice to Venus Co. for P37,000, on a cash basis.

Asset = Liabilities + Owner’s Equity

Professional
Cash 37,500 37,500
Fees*

*Revenue account

Uy Law Office purchases a laptop for P36,000 cash. The laptop has an estimated useful life of
3 years, with no residual value. The Company treats purchases during the first half of the
month as a purchase at the start of the month.

Asset = Liabilities + Owner’s Equity

Office
36,000
Equipment

Cash (36,000)

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UY LAW OFFICE
York New City

Dec 15

Jo Deep pays Uy Law Office.

Asset = Liabilities + Owner’s Equity

Cash 135,000

Accounts
(135,000)
Receivable

Dec 17

Atty. Uy withdraws P25,000 from the law office for his personal use.

Asset = Liabilities + Owner’s Equity

Jan Uy,
Cash (25,000) (25,000)
Drawing

Dec 20

Cygnus Catering bills Uy Law Office for P25,000 for services rendered for the company’s
holiday luncheon for its clients and staff.

Asset = Liabilities + Owner’s Equity

Accounts Representatio
25,000 25,000
Payable n Expense

Dec 22

Uy Law Office receives P35,000 cash in advance from Jupiter Co. for legal services to be
rendered in 2022.

Asset = Liabilities + Owner’s Equity

Unearned
Cash 35,000 35,000
Revenue

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UY LAW OFFICE
York New City

Dec 23

Uy Law Office renders legal service to Vega Co. for P55,000, on the account.

Asset = Liabilities + Owner’s Equity

Accounts Professional
55,000 55,000
Receivable Fees

Dec 27

Uy Law Office renders taxation advice to Amber Hair. Uy Law Office bills Amber Hair for
P20,000.

Asset = Liabilities + Owner’s Equity

Accounts Professional
20,000 20,000
Receivable Fees

Dec 31

Uy Law Office pays P15,000 for the salary of its accounting and office staff. Uy Law Office also
pays utilities of P8,000. Office supplies of P3,000 have been used up by the law office.

Asset = Liabilities + Owner’s Equity

Salaries
Cash (23,000) (15,000)
Expense

Utilities
(8,000)
Expense

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UY LAW OFFICE
York New City

General Journal

2021 Particulars Ref Debit Credit

Dec. 1 Cash 500,000

Jan Uy, Capital 500,000

Cash 100,000

Notes Payable - Bank 100,000

Permit and Licenses Expense 10,000

Cash 10,000

Prepaid Rent 120,000

Cash 120,000

Dec 02 Accounts Receivable 135,000

Professional Fees 135,000

Office Supplies 5,000

Cash 5,000

Dec 08 Cash 37,500

Professional Fees 37,500

Office Equipment 36,000

Cash 36,000

Dec 15 Cash 135,000

Accounts Receivable 135,000

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UY LAW OFFICE
York New City

Dec 17 Jan Uy, Drawing 25,000

Cash 25,000

Dec 20 Representation Expense 25,000

Accounts Payable 25,000

Dec 22 Cash 35,000

Unearned Revenue 35,000

Dec 23 Accounts Receivable 55,000

Professional Fees 55,000

Dec 27 Accounts Receivable 20,000

Professional Fees 20,000

Dec 31 Salaries Expense 15,000

Utilities Expenses 8,000

Cash 23,000

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UY LAW OFFICE
York New City

General Ledger

CASH

Dec. 1 500,000 Dec. 1 10,000

Dec. 1 100,000 Dec. 1 120,000

Dec. 8 37,500 Dec. 2 5,000

Dec. 15 135,000 Dec. 8 36,000

Dec. 22 35,000 Dec. 17 25,000

Dec. 31 23,000

807,500 219,000

588,500

ACCOUNTS RECEIVABLE

Dec. 2 135,000 Dec. 15 135,000

Dec. 23 55,000

Dec. 27 20,500

210,000 219,000

75,000

OFFICE SUPPLIES

Dec. 2 5,000

PREPAID RENT

Dec. 1 120,000

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UY LAW OFFICE
York New City

OFFICE EQUIPMENT

Dec. 8 36,000

ACCOUNTS PAYABLE

Dec. 20 25,000

NOTES PAYABLE

Dec. 1 100,000

UNEARNED REVENUE

Dec. 22 35,000

JAN UY, CAPITAL

Dec. 1 35,000

JAN UY, DRAWING

Dec. 17 25,0000

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UY LAW OFFICE
York New City

PROFESSIONAL FEES

Dec. 2 35,000

Dec. 8 37,500

Dec. 23 55,000

Dec. 27 20,000

247,500

SALARIES EXPENSE

Dec. 31 15,000

UTILITIES EXPENSE

Dec. 31 8,000

REPRESENTATION EXPENSE

Dec. 20 25,000

PERMIT & LICENSES EXPENSE

Dec. 1 10,000

UNADJUSTED TRIAL BALANCE

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UY LAW OFFICE
York New City

UY LAW OFFICE
UNADJUSTED TRIAL BALANCE
DECEMBER 31, 2021

CASH

ACCOUNTS RECEIVABLE

OFFICE SUPPLIES

PREPAID RENT

OFFICE EQUIPMENT

ACCOUNTS PAYABLE

NOTES PAYABLE – BANK

UNEARNED REVENUE

JAN UY, CAPITAL

JAN UY, DRAWING

PROFESSIONAL FEES

SALARIES EXPENSE

UTILITIES EXPENSE

REPRESENTATION EXPENSE

PERMIT

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