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    Mabel Wong's Professional Practice

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    Clene Doconte
    Mabel Wong began her professional practice in July. She collected $57,000 in revenue but incurred $41,000 in expenses. Her net income was $14,000 for the month. She purchased $120,000 in equipment on credit and withdrew $5,000 for personal use. Her cash balance decreased to $44,500 by the end of July.

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    Mabel Wong's Professional Practice

    Uploaded by

    Clene Doconte
    7K views7 pages
    Mabel Wong began her professional practice in July. She collected $57,000 in revenue but incurred $41,000 in expenses. Her net income was $14,000 for the month. She purchased $120,000 in equipment on credit and withdrew $5,000 for personal use. Her cash balance decreased to $44,500 by the end of July.

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    Mabel Wong began her professional practice in July. She collected $57,000 in revenue but incurred $41,000 in expenses. Her net income was $14,000 for the month. She purchased $120,000 in equipment on credit and withdrew $5,000 for personal use. Her cash balance decreased to $44,500 by the end of July.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    7K views7 pages

    Mabel Wong's Professional Practice

    Uploaded by

    Clene Doconte
    Mabel Wong began her professional practice in July. She collected $57,000 in revenue but incurred $41,000 in expenses. Her net income was $14,000 for the month. She purchased $120,000 in equipment on credit and withdrew $5,000 for personal use. Her cash balance decreased to $44,500 by the end of July.

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    © All Rights Reserved
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    Problem:

    Mabel Wong began professional practice as a system analyst on July 1.


    She plans to prepare a monthly financial statements. During July the owner completed these transactions.

    1 Owner invested P50,000 cash along with furniture and fixtures that had a P20,000 market value two years ago
    but worth 10,000 only on investment date.
    2 Paid P25,000 cash for July rent including P 500 water bill for fully furnished office space
    4 Purchased P120,000 worth of state of the art equipment on credit for thirty monthly instalment payments.
    6 Purchased office supplies for cash, P 2,500.
    8 Completed work for a client and immediately collected P 32,000 cash.
    10 Billed client P 25,000
    15 Paid an assistant P6,200 cash as wages for 15 days.
    16 Collected P15,000 cash on client billed on July 10.
    25 Owner withdrew P5,000 for personal use.
    28 Paid the first instalment to settle the liability on the equipment purchased.
    30 Paid salary of the assistant.
    31 Paid PLDT bill P1,800 and Meralco bill P 1,800.
    31 Used up P2,000 worth of supplies.
    Date Cash A/R Supplies Furniture Equipment A/P L/P Capital Changes in OE
    01-Jul P50000 P10000 P60000
    2 (P25000) (P500) Utilities Expense
    (P24,500) Rent Expense
    4 P120000 P120000
    6 (P2500) P2500
    8 P32000 P32000 Revenue
    10 P25000 P25000 Revenue
    15 (P6200) (P6200) Salaries Expense
    16 P15000 (P15000)
    25 (P5000) (P5000) Drawings
    28 (P4000) (P4000)
    30 (P6200) (P6200) Salaries Expense
    31 (P3600) (P3600) Utilities Expense
    31 (P2000) (P2000) Supplies Expense
    BALANCE P44500 P10000 P500 P10000 P120000 P116000 - P69000
    Mabel Wong's Professional Practice
    Statement of Financial Position
    July 31, 2020

    ASSETS LIABILITIES AND OWNER'S EQUITY


    Cash P44500 Accounts Payable P116000
    Accounts Receivable P10000 Loans Payable -
    Supplies P500 Wong Capital P69000
    Furniture and Fixtures P10000
    Equipment P120000
    Total Assets P185000 Total Liabilities and Owner's Equity P185000
    Mabel Wong's Professional Practice
    Income Statement
    For the Month Ended July 31, 2020

    Service Revenue P57000


    Less: Expenses
    Rent Expense (P24500)
    Salaries Expense (P12400)
    Utilities Expense (P4100)
    Supplies Expense (P2000)
    Net Income P14000
    Mabel Wong's Professional Practice

    Statement of Changes in Owner's Equity

    For the Month Ended July 31, 2020

    Beginning Capital -

    Add: Net Income P14000

    Total P14000

    Less: Drawings (P5000)

    Ending Capital P9000


    Mabel Wong's Professional Practice
    Statement of Cash Flows
    For the Month Ended July 31, 2020

    Operating Activities:
    Collection from Customers P47000
    Payment of Expense (P41000)
    Payment for the Purchase of Supplies (P2500)
    Net Cash Inflow from Operation P3500

    Financing Activities:
    Borrowed by the Bank -
    Withdrawal by the Owner (P5000)
    Net Cash Outflow from Financing (P5000)

    Investing Activities:
    Payment for the Purchase of Equipment (P4000)
    Net Cash Outflow from Investing (P4000)

    Decrease in Cash (P5500)


    Add: Cash Balance July 1 P50000
    Cash Balance July 31 P44500

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