Case 2

INTRODUCTION

In January 2023, Athan and Jaron formed the A&J Partnership with initial capital contributions of P300,000 each and
agreed to share profits and losses equally. A&J is a NON-VAT registered entity engaged in rendering professional
accounting services with an office located in Bataan.

The entity prepares financial statements monthly; hence, it prepares adjusting and closing entries at the end of each
month.

A&J maintains the following chart of accounts:

111 Cash 313 Athan, Drawings

113 Accounts Receivable 314 Jaron, Drawings
118 Input VAT 315 Income Summary
122 Office Equipment 411 Service Revenues
122A Acc. Depreciation – Office Equipment 512 Salaries Expense
211 Accounts Payable 513 SSS, PHIC, & Pag-Ibig Contribution
212 Withholding taxes payable 521 Rent Expense
213 Expanded Withholding Taxes Payable 522 Utilities Expense
214 SSS, PHIC, & Pag-ibig Contribution Payable 523 Supplies Expense
215 Utilities Payable 524 Transportation Expense
216 Accrued Percentage Tax Payable 531 Depreciation Expense
218 Output VAT 532 Percentage Tax Expense
311 Athan Capital 551 Miscellaneous Expense
312 Jaron Capital

The partnership’s accounting policy includes the following:

1. The corporation uses special journals to record service revenues, cash receipts, and cash disbursement in
addition to the general journal. It also maintains subsidiary ledger for its clients.
2. Depreciation on office equipment is 10% per annum based on office equipment balance.
3. Purchases of supplies are immediately charged to expense.
4. Percentage Tax is accrued monthly at 3% of service revenues.

A&J’s post-closing trial balance as of August 31, 2023 is as follows:

Debit Credit
Cash 255,100
Accounts Receivable 115,100
Office Equipment 210,100
Accumulated – Office Equipment 17,600

Withholding Taxes Payable 800

Expanded Withholding Taxes Payable 500
SSS, PhilHealth, and Pag-ibig Contributions Payable 5, 650
Utilities Payable 3, 800
Accrued Percentage Tax Payable 6,750
Athan, Capital 272,600
Jaron, Capital 272,600
TOTAL 580,300 580,300
 ____________________________________
GENERAL JOURNAL

Page 1
Date
Particulars PR Debit Credit

Page 2
Date
Particulars PR Debit Credit
 ____________________________________
REVENUES JOURNAL
Page 1
Date Service Revenues Accounts Receivable
Invoice No. Accounts Debited PR
credit debit

____________________________________
CASH RECEIPTS JOURNAL

Page 1
Accounts Service
Date Invoice Cash
OR No. Accounts Credited PR Receivable Revenue
No.
credit credit debit
 ______________________________________
CASH DISBURSEMENT JOURNAL
Page 1
Check Salaries SSS,PH,Pag. Withholding Supplies Input Expanded With.
Date PR Sundry Cash
Voucher Check No. Accounts Dedited Expense Payable Tax Payable Expense VAT Tax
No. debit debit debit (credit) debit(credit) debit debit debit (credit) credit
 ______________________________________
GENERAL LEDGER
Account: ____________________________________ ________ Account: _____________________________________ _________
Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________

Date Item PR Debit Credit Balance
Account: _____________________________________ _________
Date Item PR Debit Credit Balance

Account: ____________________________________ ________

Date Item PR Debit Credit Balance

Account: _____________________________________ _________

Date Item PR Debit Credit Balance

Account: ____________________________________ ________

Date Item PR Debit Credit Balance
Account: ____________________________________ ________ Account: _____________________________________ _________
Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________

Date Item PR Debit Credit Balance

Account: _____________________________________ _________

Date Item PR Debit Credit Balance
Account: ____________________________________ ________ Account: _____________________________________ _________
Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance

Account: ____________________________________ ________ Account: _____________________________________ _________

Date Item PR Debit Credit Balance Date Item PR Debit Credit Balance
 ____________________________________________
WORKSHEET
For the month ended ___________________
Trial Balance Adjustments Statement of Comp. Income Statement of Fin Position
Account Title
Debit Credit Debit Credit Debit Credit Debit Credit
 _______________________________________________
Statement of Comprehensive Income
For the month ended __________________
Service Revenues
Salaries Expense
SSS, PHIC, & Pag-IBIG Contribution
Rent Expense
Utilities Expense
Supplies Expense
Transportation Expense
Depreciation Expense
Percentage Tax Expense
Miscellaneous Expense
Total Expenses
NET INCOME (LOSS)

________________________________________
Statement of Changes in Partner’s Equity
For the month ended _________________
__________, Capital ___________, Capital Totals
Beginning capital +
Drawings -
Net Income (Loss) +
Ending Capital

___________________________________
Statement of Financial Position
_________________
ASSETS
Cash
Accounts Receivable
Input VAT
Total Current Asset
Office Equipment
Acc. Dep. – Office Equipment
Total Non-Current Asset
TOTAL ASSET
LIABILITIES
Accounts Payable
Withholding Taxes Payable
Expanded Withholding Taxes Payable
SSS, PHIC, & Pag-IBIG Payable
Utilities Payable
Accrued Percentage Tax
TOTAL LIABILITIES
PARTNER’S EQUITY
Athan, Capital
Jaron, Capital
Total Partner’s Equity
Total Liabilities and Partner’s Equity
 _________________________________________
Post-Closing Trial Balance
__________________
Accounts Debit Credit

Total

________________________________________
Statement of Cash Flows
For the month ended _______________
 __________________________________________
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER

Account:
Date Item PR Debit Credit Balance

Account:
Date Item PR Debit Credit Balance

Account:
Date Item PR Debit Credit Balance

Account:
Date Item PR Debit Credit Balance

Account: ______________________________________
Date Item PR Debit Credit Balance

Account: ______________________________________
Date Item PR Debit Credit Balance

Account: ______________________________________
Date Item PR Debit Credit Balance