Problem 14

Mabel Wong began a professional practice system analyst on July 1. She plans to prepare monthly financial statements.

During July, the owner completed the following transactions:

July

01 Owner invested P50,000 cash along with furniture and fixtures that had a P20,000 market value two years

ago but was now worth P10,000 only.

02 Paid P25,000 cash for July rent (including P500 water bill) of a fully furnished office space at the Madrigal

Building.

04 Purchased P120,000 worth of state-of-the-art equipment on credit for thirty monthly installment payments.

06 Purchased office supplies for cash, P2,500.

08 Completed work for a client and immediately collected the P32,000 cash earned.

10 Completed work for a client and sent a bill for P27,000 to be paid within thirty days.

15 Paid an assistant P6,200 cash as wages for 15 days.

18 Collected P15,000 cash on the amount owed by the client.

25 Completed work for another client who paid only P40,000 or 40% of the total computerized system. The

client promised to pay the balance in thirty days.

28 Owner withdrew p5,000 cash for personal use.

28 Paid the first installment to settle the liability on the equipment purchased.

30 Paid salary of assistant.

31 Received PLDT bill, P1800 and Meralco bill, P3,800.

31 Used up P2,000 worth of supplies.

Requirement:

a) prepare journal entry

b) prepare income statement