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Exercise No. 2: Analyzing Transactions
to Start a Business Bookkeeping for a
Service Provider (Journalizing)
Introduction
The second step in the accounting cycle involves analyzing and recording source documents in a book called the journal, the book of original entry. The debits and credits of each account are recorded chronologically by day. The simplest form of journal is the two-column general journal and the process of recording in this book is called Journalizing. Each journal entry contains the following items:
- Date
- The account title and the amount to be debited
- The account title and the amount to be credited
- Explanation
Learning Outcomes
- Prepare Journal entries.
- Record Journal entries correctly in a journal
Materials
Online: Laptop or a cellphone, calculator Modular: Black Ballpen answer sheet provided, calculator
Procedure
A. Journalize the following transaction using a 2-column journal. Dr. Janet Dantes opened her medical clinic in Laguna. Consultation fee is Php. 500 per patient, surgery fee depends on the medical case and I allowed to be on account for 30 days with a 50% down payment. The following transactions took place for the first month of operation. January 3 The doctor invested Php. 150,000 cash and 30,000 medical equipment
5 Bought furniture and fixtures costing Php. 15,000 from Furniture Canvas on account 10 Bought and paid cash for medical supplies costing Php. 5, 14 A summary of medical services rendered showed: fifteen (15) cash patients for consultation and check-up. Two for minor surgery. Miles Pangilinan Php. 15,000 and Francis Santos Php. 25,000. Collected the 50% downpayment. 15 Paid the semi-monthly salaries of the secretary and the nurse Php. 9,500. 16 Dr. Dantes bought surgery equipment from Melrose Medical Equipment and issued a note for Php. 200, 17 Collected in full from Francis Santos. 18 Dr. Dantes withdrew Php. 750 medical supplies for family use. 20 Sent a bill to Lucia Tan for monthly check-up for her ten employees. Tan paid 50% only. 22 Partial payment was made to furniture Canvas in the amount of Php. 5,000. 24 Summary of cash receipts from various patients: twenty for consultation and medical check up 25 Paid Php. 50,000 to Melrose Medical Equipment 28 Dr. Dantes charged Mr. John Cojuangco for a leg surgery. He paid Php. 15,000 in cash an promised to pay the balance within 30 days 29 Paid for utilities Php. 2,000, clinic rental Php. 8,000 and semi- monthly salaries 30 Medical supplies used up, Php. 3, 31 Miles paid half of her account.
17 Cash 12, Accounts Receivable 12, Collection from Francis Santos 18 Dantes, Drawings 750 Medical Supplies 750 Withdrawal of supplies for family use 20 Cash 2, Accounts Receivable 2, Service Revenue 5, Rendered service and paid on account with 50% down payment 22 Accounts Payable 5, Cash 5, Made partial payment to furniture canvas 24 Cash 10, Service Revenue 10, Received cash for services performed 25 Notes Payable 50, Cash 50, Partial payment to Melrose Medical Equipment 28 Cash 7, Accounts Receivable 7, Service Revenue 15, Rendered service on account to be paid within 30 days
29 Utilities Expense 2, Rental Expense 8, Salaries Expense 9, Cash 19, Paid for utilities, rental, and monthly salaries expense 30 Medical Supplies Expense 3, Cash 3, Used medical supplies 31 Cash 7, Accounts Receivable 7, Received payment from Miles B. the following business papers, analyze the transactions and make the entries from the viewpoint of Cruz Realty, a lessor who own the building:
April 4, 2019 I promise to pay Cruz Realty the sum of fifteen thousand pesos (Php. 15,000) for the March rental of Room No. 7 on or before April 15, 2019. Jill St. John Ms. Jill St. John TENANT
CRUZ REALTY 178 Jupiter St. Makati CASH VOUCHER Pay to: Joe Lucas No. 145 Address: Carpenter April 10, 2019 EXPLANATION AMOUNT Wages for carpentry job for 10 days from April 1- 10 Php. 5, Prepared by: Jean Lopez Cashier
OLYMPIA EQUIPMENT Taft Ave. Manila CREDIT SALES INVOICE No. 210 April 30, 2019 Customer: Cruz Realty Address: 178 Jupiter St. Makati EXPLANATION AMOUNT One computer Pentium III 500 mhz Php. 35, Terms: 15 days Alex Mallari Proprietor
Answer Sheet: At least two accounts are affected, either an asset, liability, owner’s equity and the effect column should show the amount either in the increase or decrease column and either in the debit or credit column. Account Name Effect Debit Credit Increase Decrease
- Rent Receivable 15,000 15, Rent Revenue 15,000 15,
- Wages Expense 5,000 5, Cash 5,000 5,
- Cash 100,000 100, Loans Payable 100,000 100,
- Rent Receivable 17,500 17, Rent Revenue 17,500 17,
- Cash 17,500 17, Rent Receivable 17,500 17,
- Equipment 35,000 35, Cash 35,000 25,
To record purchase of equipment
