Mora, owner of SuperBonga Beauty Salon, has requested your assistant to record the

following transactions for the month of October 2014 and prepare the corresponding
financial reports.

October 1 Mora made the following investments:

Cash 50,000
Furniture and Fixtures 30,000
Shop Equipment 60,000
1 Bought air conditioning unit on account, P30,000. Interest bearing
promissory note was issued to this effect.
2 Paid business permit and licenses, P4,000
2 Paid local radio station for advertising the opening of the salon,
P5,000. Use expense method
3 Bought some beauty supplies on account, P30,000. Use asset
method
8 Revenues for the week:
Cash 10,000
On account 12,000
9 Paid fifty percent (50%) of the beauty supplies bought on October
3.
12 Rendered home service worth P10,000 to bride and groom Kathryn
and Daniel on account. Interest bearing note was issued by
Kathryn to this effect.
15 Received cash from various clients for services rendered during the
week, P20,000.
15 Paid the wages of her assistants, P15,000
15 Paid P15,000 to Mahal, the owner of the building used by the salon.
Use asset method.
16 Received P10,000 from Nadine for home service to be rendered
on October 25. Use income method.
17 Collected 50% of October 8 revenue on account
21 Revenues for the week
Cash 15,000
On credit 10,000
21 Withdrew P10,000 for tuition of her children
25 Received 3,000 from Piolo for three (3) home services to be
rendered in the future. Use liability method.
28 Received 25,000 from various clients for services rendered
29 Received light and water bill for the month, P1,500
31 Paid the following
Light and water bill 1,500
Wages 15,000
Telephone bill 1,000

Below is the chart of accounts of SuperBonga Beauty Salon developed by Mora.

SuperBonga Beauty Salon

Chart of Accounts

Assets: Liabilities:
Cash Notes payable
Notes receivable Accounts payable
Accounts receivable Accrued interest payable
Allowance for doubtful accounts Unearned service income
Light and water payable
Accrued interest receivable Equity:
Prepaid rent Mora, Capital
Prepaid advertising Mora, Withdrawals
Beauty supplies
Furniture and Fixtures Revenues:
Accumulated depreciation-furniture and fixtures Service income
Shop Equipment Interest income
Accumulated depreciation-shop equipment
Air conditioning Expenses:
Accumulated depreciation-air conditioning Rent expense
Advertising expense
Wages expense
Light and Water
Communication expense
Depreciation expense
Beauty supplies expense
Permits and licenses
Interest expense

Additional Information:

1. Lives of fixed assets are: Furniture and Fixtures, 5 years; Shop Equipment, 5
years; and Air conditioning, 10 years.
2. The advertising expense paid on October 2 is for 5 months starting the current
month.
3. P20,000 worth of beauty supplies were on hand at the end of October.
4. Interests accruing at the end of the month follow:
On notes payable P100
On notes receivable P200
5. The rent paid to Mahal on October 15 is for October to December 2014.
6. The home service to be rendered to Nadine on October 25 did not materialize
due to bad weather. Both parties agreed that the same shall be rendered on
November 25, 2014.
7. The salon was able to render one (1) home service to Piolo during the month. The
remaining home services will be made the following month.

REQUIREMENT: Based on the above information, prepare the following:

a. Journal entries
b. T-accounts
c. Preliminary trial balance
d. Adjusting entries
e. Final trial balance
f. Statement of comprehensive income
g. Statement of owner’s equity
h. Statement of financial position
i. Closing entries
j. Post closing trial balance
k. Reversing entries