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I.

OBJECTIVES:
At the end of the session, the students must be able to:
a. demonstrate understanding of the use and procedures to be followed in making entries in the
journal after validation of transaction analysis is made;
b. recognize the importance of debit and credit analysis having played a pivotal role in the
overall journalizing process; and
c. use account titles provided in the chart of accounts.

II. SUBJECT MATTER


Topic: Journalizing
Reference: Fundamentals of Accountancy, Business & Management by Rex Banggawan, et. al,
Chapter 8
Fundamentals of Accounting by Rafael Lopez, Chapter 4
Materials: Laptop, Projector, Cartolina

III. PROCEDURE
A. Review:
Revisits the essential learning of the students of elements/major accounts and will be shown
some account titles which they will have to identify, and the normal balance for each.

B. Presentation
Set the mood and give the objectives of the lesson to motivate the learner and develop an
overall expectation of how new lesson can be relevant to the previous ones.
Concepts discussed involve the following:
1.) General Journal, its Use and Parts;
2.) Chart of Accounts and its Use; and
3.) Journalizing and its Procedures.

C. Practice Exercise/Activity
Analyze the effect to each element under the following transactions and make a journal entry.
Illustrative Problem: Davao Laundry Services

March 1 – Mr. Severo Santos opens a current account with Allied Banking Corporation in the amount
of ₱850,000 to start with his laundry business under the trade name “Davao Laundry Services.”
Suggested Answer:
ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

850,000 850,000

Cash in Bank 850,000


S. Santos, Capital 850,000

March 2 – Purchased laundry supplies on account, ₱90,000 from the following suppliers:
SM City – Davao ₱35,000
Gaisano Mall 25,000
NCCC Mall 30,000
Total Payable ₱90,000

Suggested answer:
ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

90,000 90,000

Laundry Supplies 90,000


Accounts Payable 90,000

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March 3 – Purchased laundry machine for cash, ₱150,000.

Suggested answer:
ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

150,000
(150,000)

Laundry Equipment 150,000


Cash in Bank 150,000

March 4 – Rendered laundry services on account, ₱80,000 to the following customers:


Apo View Hotel ₱ 5,000
Grand Men Seng 35,000
Marco Polo Hotel 30,000
Royal Mandaya 10,000
Total Receivable ₱80,000

Suggested answer:

ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

80,000 80,000

Accounts Receivable 80,000


Laundry Income 80,000

March 5 – Paid taxes and licenses due to the government, ₱4,000.

Suggested answer:

ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(4,000) 4,000

Taxes and Licenses 4,000


Cash in Bank 4,000

March 6 – Mr. Severo Santos withdrew ₱10,000 cash from the business for his personal use.

Suggested answer:

ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(10,000) 10,000

S. Santos, Drawing 10,000


Cash in Bank 10,000

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March 7 – The business borrowed money from Allied Banking Corporation, ₱100,000 by issuing a 15-
day note. It was deposited to the account of Davao Laundry Services by the bank.

Suggested answer:
ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

100,000 100,000

Cash in Bank 100,000


Notes Payable 100,000

March 8 – The bank issued a debit memo, ₱1,000 for interest and bank charges.

Suggested answer:
ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(1,000) 1,000

Interest Expense 1,000


Cash in Bank 1,000

March 9 – Received cash of ₱45,000 representing collection from the following customer’s account:

Grand Men Seng ₱30,000


Marco Polo Hotel 10,000
Royal Mandaya 5,000
Total Collection ₱45,000

Suggested answer:

ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

45,000
(45,000)

Cash in Bank 45,000


Accounts Receivable 45,000

March 10 – Partial payment of accounts, ₱60,000 to the following suppliers:


SM City – Davao ₱25,000
Gaisano Mall 20,000
NCCC Mall 15,000
Total Payable ₱60,000

Suggested answer:
ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE


Accounts
(60,000) (60,000) Payable

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60,000
Cash in Bank 60,000

March 15 – Mr. Severo Santos hired an accountant/manager for his business as he has plenty of things
to attain to at ₱10,000 per month salary effective April 1, 2018.

Suggested answer:
---- No journal entry! ---

March 30 – The following expenses were paid by Davao Laundry Services for the month in March
2018:
Space Rental ₱ 5,000
Light & Water 12,000
Salaries of Employees 10,000
Total Expenses Paid ₱27,000

Suggested answer:

ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(27,000) 27,0000

IV. EVALUATION

INSTRUCTION: Fill-in the blanks with accounts debited and credited in the following given transactions of
Lourdes Bato-on, owner of Sulamin’s Photo Shop:

Jan 3 - Cash in Bank


_______________________
To record initial investment.

10 - Shop Supplies Inventory


_______________________
To record supplies purchased on account.

15 - Accounts Receivable
_______________________
To record rendered photo service on account.

17 - Accounts Payable
_______________________
To record payment of accounts.

18 - Photo Equipment
_______________________
To record issuance of a 60-day note for photo equipment on
account.

19 - Taxes and Licenses


_______________________
To record payment of taxes and licenses.

20 - Lourdes Bato-on, Drawing


_______________________
To record withdrawal of owner.

28 - Cash on Hand
_______________________
To record rendered service for cash.

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30 - Notes Receivable
_______________________
To record rendered service on account.

31 - __________________
Service Income
To record rendered services billed to a customer.

V. ASSIGNMENT

Study in advance posting of journal transactions.

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