Ms. P put up an accounting firm on November 1, 2011. The registered name of the business is “P Accounting Firm.” The following were the transactions during the months of November and December 2011:The owner provided P30,000 cash as initial investment to the business on November 1, 2011.Obtained a 12%, one year, bank loan for P50,000 on November 1, 2011. Principal and interest are due at maturity date.Purchased office supplies worth P60,000 for cash during the period.Rendered services worth P280,000 for cash during the period.Paid utilities expense of P4,000.The owner withdrew a total of P100,000 cash from the business during the period. Additional information:a. Unused office supplies on December 31, 2011 amounted to P5,000With the given information:1. Prepare the closing the entries. 2. Prepare the balance sheet and income statement.

Closing entries are prepared to close the incomes and expenses to income statement and dividend…

Answered: Ms. P put up an accounting firm on…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ms. P put up an accounting firm on November 1, 2011. The registered name of the business is “P Accounting Firm.” The following were the transactions during the months of November and December 2011:

The owner provided P30,000 cash as initial investment to the business on November 1, 2011.
Obtained a 12%, one year, bank loan for P50,000 on November 1, 2011. Principal and interest are due at maturity date.
Purchased office supplies worth P60,000 for cash during the period.
Rendered services worth P280,000 for cash during the period.
Paid utilities expense of P4,000.
The owner withdrew a total of P100,000 cash from the business during the period.

Additional information:

a. Unused office supplies on December 31, 2011 amounted to P5,000

With the given information:

1. Prepare the closing the entries.

2. Prepare the balance sheet and income statement.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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