Initial transaction:

On Oct. 1 Rey Fernan Refozar, CPA, obtained the funds to start his own business by withdrawing P800,000 from his personal savings. He deposited the money in a new bank account that he opened in the name of the firm, Refozar Accounting Services. The office is managed by Jiexel Manongsong, CPA, MBA.

Recorded as:

DATE ASSETS = LIABILITIES + OWNER'S EQUITY

Oct. 1

Cash

P800,000 = Refozar,capital

P800,000

Additional transactions:

Oct. 3 - Manongsong bought a computer, a copy machine, a fax machine, calculators and other necessary equipment from M. Medina Inc., at cost of P100,000. M. Medina Inc., agreed to allow 60 days for the firm to pay the bill.

Oct. 4 - Manongsong placed an order for toner, fax paper, bond paper, pens, folders and other supplies that had a total cost of P20,000. The entity that sold the items, Cavite Supplies, Inc., requires cash payments from businesses that are under six months old. Refozar Accounting Services therefore issued a check to pay for the items.

Oct. 9 - Manongsong decided to pay P40,000 to M. Medina Inc., to reduce the firm's debt to the business.

Oct. 13 - Refozar Accounting Services earned P70,000 of revenue from charge account to clients. These clients are allowed 30 days to pay.

Oct. 18 - Refozar Accounting Services hired an accounting staff on Oct. 1 to help in the business. The firm paid P25,000 in salaries for this employee and Jiexel Monongsong.

Oct. 23 - Entity received P30,000 from clients who had previously bought services on account. Cash was applied to their accounts.

Oct. 28 - Entity earned a total of P210,000 in revenue from clients who paid cash for accounting and bookkeeping services

Oct. 30 - Entity paid utility bills worth P35,000.

Oct. 31 - Entity issued a check for the payment of monthly rent worth P45,000.