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    Accounting Cycle Problem

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    Ayesha
    Mora, the owner of SuperBonga Beauty Salon, requests assistance in recording October 2014 transactions and preparing related financial reports. Key transactions include investments in assets, purchases on account, revenues from services, expenses like wages and rent, and collection or payment of various accounts. The document provides a chart of accounts and additional information needed to record adjusting entries and prepare the required financial statements.

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    Accounting Cycle Problem

    Uploaded by

    Ayesha
    343 views2 pages
    Mora, the owner of SuperBonga Beauty Salon, requests assistance in recording October 2014 transactions and preparing related financial reports. Key transactions include investments in assets, purchases on account, revenues from services, expenses like wages and rent, and collection or payment of various accounts. The document provides a chart of accounts and additional information needed to record adjusting entries and prepare the required financial statements.

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    Superbonga beauty salon

    Original Title

    Accounting cycle problem

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    Mora, the owner of SuperBonga Beauty Salon, requests assistance in recording October 2014 transactions and preparing related financial reports. Key transactions include investments in assets, purchases on account, revenues from services, expenses like wages and rent, and collection or payment of various accounts. The document provides a chart of accounts and additional information needed to record adjusting entries and prepare the required financial statements.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    343 views2 pages

    Accounting Cycle Problem

    Uploaded by

    Ayesha
    Mora, the owner of SuperBonga Beauty Salon, requests assistance in recording October 2014 transactions and preparing related financial reports. Key transactions include investments in assets, purchases on account, revenues from services, expenses like wages and rent, and collection or payment of various accounts. The document provides a chart of accounts and additional information needed to record adjusting entries and prepare the required financial statements.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Mora, owner of SuperBonga Beauty Salon, has requested your assistant to record the

    following transactions for the month of October 2014 and prepare the corresponding
    financial reports.

    October 1 Mora made the following investments:


    Cash 50,000
    Furniture and Fixtures 30,000
    Shop Equipment 60,000
    1 Bought air conditioning unit on account, P30,000. Interest bearing
    promissory note was issued to this effect.
    2 Paid business permit and licenses, P4,000
    2 Paid local radio station for advertising the opening of the salon,
    P5,000. Use expense method
    3 Bought some beauty supplies on account, P30,000. Use asset
    method
    8 Revenues for the week:
    Cash 10,000
    On account 12,000
    9 Paid fifty percent (50%) of the beauty supplies bought on October
    3.
    12 Rendered home service worth P10,000 to bride and groom Kathryn
    and Daniel on account. Interest bearing note was issued by
    Kathryn to this effect.
    15 Received cash from various clients for services rendered during the
    week, P20,000.
    15 Paid the wages of her assistants, P15,000
    15 Paid P15,000 to Mahal, the owner of the building used by the salon.
    Use asset method.
    16 Received P10,000 from Nadine for home service to be rendered
    on October 25. Use income method.
    17 Collected 50% of October 8 revenue on account
    21 Revenues for the week
    Cash 15,000
    On credit 10,000
    21 Withdrew P10,000 for tuition of her children
    25 Received 3,000 from Piolo for three (3) home services to be
    rendered in the future. Use liability method.
    28 Received 25,000 from various clients for services rendered
    29 Received light and water bill for the month, P1,500
    31 Paid the following
    Light and water bill 1,500
    Wages 15,000
    Telephone bill 1,000

    Below is the chart of accounts of SuperBonga Beauty Salon developed by Mora.

    SuperBonga Beauty Salon


    Chart of Accounts

    Assets: Liabilities:
    Cash Notes payable
    Notes receivable Accounts payable
    Accounts receivable Accrued interest payable
    Allowance for doubtful accounts Unearned service income
    Light and water payable
    Accrued interest receivable Equity:
    Prepaid rent Mora, Capital
    Prepaid advertising Mora, Withdrawals
    Beauty supplies
    Furniture and Fixtures Revenues:
    Accumulated depreciation-furniture and fixtures Service income
    Shop Equipment Interest income
    Accumulated depreciation-shop equipment
    Air conditioning Expenses:
    Accumulated depreciation-air conditioning Rent expense
    Advertising expense
    Wages expense
    Light and Water
    Communication expense
    Depreciation expense
    Beauty supplies expense
    Permits and licenses
    Interest expense

    Additional Information:

    1. Lives of fixed assets are: Furniture and Fixtures, 5 years; Shop Equipment, 5
    years; and Air conditioning, 10 years.
    2. The advertising expense paid on October 2 is for 5 months starting the current
    month.
    3. P20,000 worth of beauty supplies were on hand at the end of October.
    4. Interests accruing at the end of the month follow:
    On notes payable P100
    On notes receivable P200
    5. The rent paid to Mahal on October 15 is for October to December 2014.
    6. The home service to be rendered to Nadine on October 25 did not materialize
    due to bad weather. Both parties agreed that the same shall be rendered on
    November 25, 2014.
    7. The salon was able to render one (1) home service to Piolo during the month. The
    remaining home services will be made the following month.

    REQUIREMENT: Based on the above information, prepare the following:

    a. Journal entries
    b. T-accounts
    c. Preliminary trial balance
    d. Adjusting entries
    e. Final trial balance
    f. Statement of comprehensive income
    g. Statement of owner’s equity
    h. Statement of financial position
    i. Closing entries
    j. Post closing trial balance
    k. Reversing entries

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