On December 31, 2012, the trial balance prepared from these records appeared as follows:The Geronimo Auto Repair Company began business operations in January 2, 2012. During 2012, the accounting records are kept on a double entry system by on the cash basis of accounting.

The owner, Mr. Roger Geronimo, decided to use the accrual instead of the cash basis of keeping accounting records. Details of unrecorded accruals and other information as of December 31, 2012 are as follows:

a. Auto supplies on hand on Dec. 31 at cost, P125,000. b. On December 31, accounts receivable amounted to P25,000. c. On December 31, salaries payable totaled P18,000. d. Accrued utilities expense on Dec. 31, P4,800. e. Auto supplies expense included supplies in the amount of P2,500 bought for the owner. He had not reimbursed the company. f. Included in the Repair Income was P5,200 deposit given by a customer for repairs to be done in 2013. g. Office supplies unused as of Dec. 31, P1,200. h. It is estimated that repair equipment bought on July 1, 2012 would have an estimated useful life of 10 years, without scrap value. i. One-year insurance premium on a fire insurance policy covering repair shop and fixed assets was taken on Oct 1, 2012. j. The notes payable balance consists of two notes: a non-interest bearing note of P20,000 dated August 1, 2012, bearing an interest of 12% (interest was deducted in advance). Additional account titles to be used: Accounts Receivable Prepaid Interest Utilities Payable Advances to Officers and Employees Accumulated Depreciation Depreciation Expense Unused Auto Supplies Repair Equipment Income Summary Unused Office Supplies Unearned Repair Income Prepaid Insurance Salaries Payable As of December 31, 2012 prepare: 1. Adjusting Entries 2. Closing Entries (Hint: Use T-accounts to arrive at your values) 3. Adjusted Trial Balance 4. Post-closing Trial Balance

Credit Geronimo Auto Repair Company Trial Balance December 31, 2012 Debit Cash 55,000 Repair Equipment 12,000 Auto Supplies Expense 980,000 Salaries Expense 90,000 Repair Expense 38,000 Office Supplies Experise 20,000 Utilities Expense 37,000 Insurance Expense 6,000 Interest Expense 3,000 Notes Payable Repair Income M. Geronimo, Capital M. Geronimo, Drawing 4,000 1,245,000 45,000 1,100,000 100,000 1,245,000