Hyun Bin started his accounting consultancy business on January 1, 2021. During the first month of the business, the following transactions occurred: Hyun Bin purchased a laptop on January 1, 2021 for ₱50,000. 30% of the purchase price was paid in cash, the balance was subject

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 21CE
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Hyun Bin started his accounting consultancy business on January 1, 2021. During the first month of the business, the following transactions occurred:

  1. Hyun Bin purchased a laptop on January 1, 2021 for ₱50,000. 30% of the purchase price was paid in cash, the balance was subject to a 2-year note at 3% interest.

  2. Vera expects that the laptop will be used in the business for 3 years.

  3. On January 5, Vera received ₱12,000 for services to be rendered on the succeeding 4 months.

  4. On January 3, Vera purchased a 1-year insurance policy for ₱24,000.

  5. Office supplies purchased cost ₱15,000. A count of supplies at month-end indicates ₱12,000 supplies are on hand.

  6. On January 31, Hyun Bin received a bill from the lessor for January rent amounting to ₱16,000, and utilities amounting to ₱4,000.

  7. Services performed to clients but were not yet billed amounted to ₱7,850.

REQUIRED (show supporting calculations):
1. Prepare the adjusting entries on January 31 if the company makes use of the asset/liability method.

2. Prepare the adjusting entries on January 31 if the company makes use of the expense/revenue method.

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