Tony Stark decided to establish a sole proprietorship business and named it as Stark Industries.

Stark is a
graphic designer who has extensive experience in drawing, layout, typography, lettering, diagramming and
photography. He possesses the talent to visually communicate to a target audience with the right combination
of words, images and ideas.
Stark Industries can do the layout and production design of newspapers, magazines, corporate reports, journals
and other publications. The entity can create promotional displays; marketing brochures for services and
products; packaging design for products; and distinctive logos for businesses. He also enters into agreements
with clients for the progressive development and maintenance of their web sites. His initial revenue stream
comes from web designing.
The owner, Tony Stark, makes the business decisions. The assets of the company belong to Stark and all
obligations of the business are his responsibilities. Any income that the entity earns belongs solely to Stark.
During March 2016, the first month of operations, various financial transactions took place. These transactions
are described as follows:
Mar.1 Stark started his new business by depositing P350,000 in a bank account in the name of Stark
Industries at PDB Poblacion branch.
Mar.5 Computer equipment costing P145,000 is acquired on cash basis.
Mar.9 Computer supplies in the amount of P25,000 are purchased on account.
Mar.11 Stark Industries collected P88,000 in cash for designing interactive web sites for two exporters
based inside the Maco Ecozone.
Mar.16 Stark paid P18,000 to Bills Bilis Express, a one-stop bills payment service company, for the semi-
monthly utilities.
Mar.17 The entity has service agreements with several Netrepreneurs to maintain and update their web
sites weekly. Stark billed these clients P35,000 for services already rendered during the month on
account.
Mar.19 Stark made a partial payment of P17,000 for the Mar.9 purchase on account.
Mar.20 Checks totaling P25,000 were received from clients for billings dated Mar.17.
Mar.21 Stark withdrew P20,000 from the business for his personal use.
Mar.27 Bruce Banner Publishing submitted a bill to Stark for P8,000 worth of newspaper advertisements
for this month. Stark will pay this bill next month.
Mar.31 Stark paid his assistant designer salaries of P15,000 for the month,

Stark Industries
Chart of Accounts

Account Name Code Element Type

Cash 101 Asset Current Asset
Accounts Receivable 102 Asset Current Asset
Computer Supplies 103 Asset Current Asset
Computer Equipment 151 Asset Non-Current Asset
Accounts Payable 201 Liability Current Liability
Mortgage Payable 251 Liabilities Non-Current Liability
Stark, Capital 301 Equity Capital
Stark, Drawing 351 Equity Drawing
Service Revenues 401 Revenue Revenue
Utilities Expense 451 Expense Expense
Advertising Expense 452 Expense Expense
Salaries Expense 453 Expense Expense