Hyun Bin opened his computer repair services shop on November 30, 2018. The following transactions happened during the operations of the business since the opening of the shop. The business uses a calendar accounting period.
Dec 1 Hyun Bin deposited P500,000 to the account of the business as initial investment
Dec 2 Purchased various computer repair equipment for P250,000, with down payment of P150,000 and the balance to be paid on terms.
Dec 3 Bought office supplies for P25,000. Expense method is used.
Dec 5 Billed various customers for services rendered, P80,000.
Dec 8 Paid rent for three months at P15,000 per month. Asset method is used.
Dec 10 Paid taxes and licenses, P8,000.
Dec 14 Received partial payment of billing on December 5, P50,000.
Dec 15 Paid half month salary of the staff receiving P36,000 on a monthly basis.
Dec 18 Rendered services to various customers: Cash basis P90,000 and On
account P70,000.
Dec 20 Paid advertising expenses for 6 months, P42,000. Expense method is used.
Dec 22 Withdrew P50,000 for personal use.
Dec 25 Received a 12%, 30-day note from customers as payment of the account on December
5, P30,000.
Dec 26 Received P25,000 for repair of 20 units of computer. Services will be provided on December 30, 2018. Income method is used.
Dec 28 Paid the transportation of the staff, P4,000.
Dec 31 Purchased office furniture on account, P120,000.
Additional information:
1. The computer repair equipment and office furniture has estimated useful life of 5 years with out residual value.
2. Office supplies on hand per physical count, P3,000
3. Salaries of staff for the remaining half– month of December still unpaid.
4. Doubtful accounts is 5% of outstanding accounts receivable.
5. Unearned service income balance is 12,000.
Required:
1.Prepare an Income Statement
2.Prepare a Balance Sheet