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AKO BA SIYA, started business on January 01, 2016.

The business was started with

P.1,000,000 as the initial capital. The transactions they engaged in during their first month of
business are as follows:

January 1. Purchased Vehicle worth P200,000, 80% on account w. interest rate of

12% per annum. the rest in cash

January 2. Paid in advance the rent and insurance P. 50,000 for the rent, 35% of the
rent fee is the insurance fee.

January 04. Paid Refrigerator worth P. 30,000 which is expected to be useful for 5
years, expected to be sell at 5% of its acquisition cost after the 5 year period.

January 7. Purchased tables, chairs worth 50,000 per set, 5 sets is purchased in
total, 3 sets of it is bought on account.

January 08. Received the advance payment of P. 350,000 for future service

January 15. Rendered service worth P. 500,000, 50% received in cash.

January 17. Purchased supplies worth P. 15,000 in cash

January 28. Received Meralco bill worth 10,000

January 30. Paid commercials, TV Ads worth 15,000

January 31, Paid Meralco bill.


1. AKO BA SIYA, shows a balance of P. 15,000 in the Supplies (asset) account. A physical

count indicates P. 5,000 of supplies on hand at the end of the fiscal period. Journalize the

required adjustment for supplies.

2. AKO BA SIYA paid the 35% of the rent fee as payment for insurance fee for one year
insurance policy on January 2 of the current year. Prepare the required adjustment for the
expired insurance after 6 months.

3. AKO BA SIYA paid P. 50,000 on January 2 for the rental fee. Prepare the required adjustment
after 8 months.

4. AKO BA SIYA purchased equipment on January 04. What will be the book value after 6

5. AKO BA SIYA expected the 35% percent of the receivables is uncollectible