CASE 2: Margarita Gonzales Law Office

Margarita Gonzales Law office was established on January 1, 2X20, and the following events occurred during the first month of operation:

• Margarita invested P100,000 cash as working capital to start her business
• Purchase of furnitures for P30,000, 50% paid in cash and 50% taken as a credit
• She signed two (2) service contracts:
  1. with XYZ for services performed during the month in the amount of P4,000; and
  2. with ABC for services that will be performed during the first week of next month for P5,000. Margarita received an advance of P20,000 with the signature of this contract.
• The furniture bought has a useful life of 30-month and should be depreciated straight line.
• Margarita agreed to pay her assistant P15,000 for the service performed of which she paid already P10,000
• XYZ paid P20,000
• Rent for the month of P10,000 was paid through a bank transfer
• An electricity bill for P3,000 was received by mail

Requirement: Based on the given information, do the following :

1. Necessary journal entries; and
2. Statement of financial position for the month ending January 31, 2020.