ACC-102 Completing-the-Accounting-Cycle Lecture for the betterment of every one to know much better about it. PDF

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Name: Date: ACC 005 (Section:_____) Jucarlo L. Germinal, CPACompleting the Accounting Cycle (Lecture Notes)As at December 31, 2012, the accounting records for Cardo Dalisay Outdoor Advertising Concepts contained the following balances:TOTAL LIABILITIES AND OWNER’S EQUITY P782,Cash P180,000 Accounts ...

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Name: ACC 005 (Section:_____)

Date: Jucarlo L. Germinal, CPA

Completing the Accounting Cycle (Lecture Notes) As at December 31, 2012, the accounting records for Cardo Dalisay Outdoor Advertising Concepts contained the following balances: Assets Liabilities and Equity Cash P180,000 Accounts Payable P34,000 Accounts Receivable 110,000 Land 90,000 Dalisay, Capital 346,000 Total P380,000 P380,000 The following accounting events apply to 2013: Jan 1 Received P100,000 additional cash investments from the owner. Purchased a service vehicle that cost P80,000. Feb 1 Borrowed P100,000 by issuing a note. Paid P24,000 cash in advance for a 1-year lease for office space Mar 1 Dalisay withdrew P30,000 for emergency personal use. April 1 Acquired land that cost P70,000 cash May 1 Made a cash payment on accounts payable amounting to P15,000. July 1 Received P42,000 cash in advance as a retainer for services to be performed monthly over the coming year. Sept 1 Sold land for P90,000 cash. Oct 1 Purchased P20,000 of supplies on account. Dec 31 Total earned service revenues (on account) for the year, P250,000. Total cash collections from accounts receivable amounted to P200,000. Incurred other operating expenses on account during the year that amounted to P80,000. Additional Information a Accrued salaries amounted to P32,000. b P1,000 of supplies remained on hand at the end of the period. c The service vehicle has an P8,000 salvage value and a 3-year useful life. d The note carried a 9% annual interest rate and a 1-year term. e Earned cash in advance as a retainer for services to be performed. f Expired portion of the 1-year lease for office space. CHART OF ACCOUNTS No. Account No. Account 110 Cash 250 Deferred Service Income 120 Accounts Receivable 310 Dalisay, Capital 130 Supplies 320 Dalisay, Drawings 140 Prepaid Rent 410 Service Income 150 Service Vehicle 510 Rent Expense 151 Accumulated Depreciation-Service 520 Supplies Expense Vehicle

160 Land 210 Accounts Payable 220 Notes Payable 230 Accrued Salaries Expense 240 Accrued Interest Expense 1. Journalizing Date Account Jan 1 Cash Dalisay, Capital Service Vehicle

530 540 550 590

Depreciation Expense Interest Expense Salaries Expense Other Operating Expense

PR 110 310

Debit P100,000

150

80,000

Credit P100,000

Cash Feb 1

Mar 1

April 1

May 1

July 1

Sept 1

Oct 1

Dec 31

110

80,000

Cash Notes Payable

110 220

100,000

Prepaid Rent Cash

140 110

24,000

Dalisay, Drawings Cash

320 110

30,000

Land Cash

160 110

70,000

Accounts Payable Cash

210 110

15,000

Cash Service Income

110 410

42,000

Cash Land

110 160

90,000

Supplies Accounts Payable

130 210

20,000

Accounts Receivable Service Income

120 410

250,000

Cash Accounts Receivable

110 120

200,000

Other Operating Expenses Accounts Payable

590 210

80,000

100,000

24,000

30,000

70,000

15,000

42,000

90,000

20,000

250,000

200,000

80,000

2. Posting to the General Ledger Beginning Jan 1 Feb 1 July 1 Sept 1 Dec 31

Oct 1

Cash P180,000 100,000 100,000 42,000 90,000 200,000 P712,000 P493,000

– 110 P80,000 24,000 30,000 70,000 15,000

Beginning Dec 31

P219,000

Supplies – 130 P20,000 P20,000

Jan 1 Feb 1 Mar 1 April 1 May 1

Accounts Receivable – 120 P110,000 200,000 250,000

360,000 P160,000

Feb 1

200,000

Prepaid Rent – 140 P24,000 P24,000

Dec 31

Jan 1

Service Vehicle – 150 80,000

Accumulated Depreciation-Service Vehicle – 151

P80,000

Beginning April 1

Land – 160 P90,000 P90,000 70,000

Sept 1

May 1

P160,000 P90,000 P70,000 Notes Payable – 220 P100,000

Accounts Payable – 210 15,000 P34,000 20,000 80,000 P15,000 P134,000 P119,000

Beginning Oct 1 Dec 31

Deferred Service Income – 230 Feb 1

P100,000 Dalisay, Capital – 310 P346,000 100,000 - P446,000 P446,000

Beginning Jan 1

Service Income – 410 42,000 250,000 P292,000 P292,000

Mar 1

Dalisay, Drawings – 320 30,000

P30,000 Rent Expense – 510 July 1 Dec 31

Supplies Expense - 520

Depreciation Expense – 530

Interest Expense - 540 Dec 31

Other Operating Expense – 590 P80,000 P80,000

Date Dec 31

Account Salaries Expense Accrued Salaries Expense

PR 550 230

Debit 32,000

Supplies Expense Supplies

520 130

19,000

Depreciation Expense Accumulated Depreciation – Service Vehicle

530 151

24,000

Interest Expense Accrued Interest Expense

540 240

8,250

Service Income Deferred Service Income

410 250

21,000

Rent Expense Prepaid Rent

510 140

22,000

Credit 32,000

19,000

24,000

8,250

21,000

22,000

Cardo Dalisay Outdoor Advertising Concepts Statement of Financial Performance For the Year Ended December 31, 2013 Service Income Less: Rent Expense Supplies Expense Depreciation Expense Interest Expense Salary Expense Other Operating Expense

P271,000 P22,000 19,000 24,000 8,250 32,000 80,000 Profit

185,250 P85,750

Cardo Dalisay Outdoor Advertising Concepts Statement of Changes in Owner’s Equity For the Year Ended December 31, 2013 Balance, Beginning Add: Investment Less: Withdrawals Add: Profit Balance, End

P346,000 100,000 (30,000) 85,750 P501,750

Cardo Dalisay Outdoor Advertising Concepts Statement of Financial Position As of December 31, 2013 ASSETS Current Assets Cash Accounts Receivable Supplies Prepaid Rent Non-Current Assets Service Vehicle Less: Accumulated Depreciation-Service Vehicle Land TOTAL ASSETS LIABILITIES AND OWNER’S EQUITY Liabilities Accounts Payable Notes Payable Accrued Salaries Expense Accrued Interest Expense Deferred Service Income Total Liabilities Owner’s Equity Dalisay, Capital

P493,000 160,000 1,000 2,000 80,000 (24,000) 70,000

119,000 100,000 32,000 8,250 21,000

P656,000

56,000 70,000 P782,000

P280,250

501,750

TOTAL LIABILITIES AND OWNER’S EQUITY

P782,000...