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Initial Investment (Source of Assets)

May 1

Virginia Yacapin is a cultured women from the


South. She is into a lot of interesting causes. Her
fine taste is preeminent such that she is
considered an authority in planning weddings.
Upon the advice of a trusted associate, Marivic
Babaran, Yacapin decide to organize her wedding
consultancy. She invested P250,000 into this
entity.

Rent Paid in Advance (Exchange of Assets)


May 1

Rented office space and paid two months rent in


advance, P8,000.

Note Issued for Cash (Source of Assets)


May 2

Virginia Yacapin issued a promissory note for a


P210,000 loan from Metrobank. This availment
will be used for the acquisition of a service vehicle.
This note carries a 20% interest per annum. The
arrangement with the bank is that both the
interest and the principal are payable in full in one
year.

May 2

Hired an office assistant and an account executive


each with a P7,800 monthly salary. Or, each is to
receive P300 per day for the 26-Day work month.
No entry is necessary at this point. They started
work immediately.

Service Vehicle Acquired for Cash (Exchange of Assets)


May 4

Acquired service vehicle for P420,000.

Insurance Premiums Paid (Exchange of Assets)

May 4

Paid Prudential Guarantee and Assurance, Inc.


P14,400 for a one-year comprehensive insurance
coverage on the service vehicle.

Office Equipment Acquired on Account (Exchange and


Source of Assets)
May 5

Acquired office equipment from Fair and Square


Emporium for P60,000; paying P15,000 in cash
and the balance next month. Note: A compound
entry is needed for this transaction.

Supplies Purchased on Account (Source of Assets)


May 8

Purchased supplies on credit for P18,000 from San


Jose Merchandising.

Accounts Payable Partially Settled (Use of Assets)


May 9

Paid San Jose Merchandising P10,000 of the


amount owed.

Revenues Earned and Cash Collected (Source of Assets)


May 10

Coordinated and finalized simple bridal


arrangements for three couples and collected fess
of P8,800 per couple. Services include prospecting
and selecting the church and reception location,
couturier, caterer, car service, flowers, souvenirs
and invitation.

Salaries Paid (Use of Assets)


May 13

Paid salaries, P6,600. This entity pays salaries


every two Saturdays (refer to the calendar in
Chapter 5).

Unearned Revenues Collected (Source of Assets)


May 15

The entity is earning additional revenues by


referring
consulting clients to friendly hotels, caterers,
printers, and P10,000 advance fees for three
clients referred.

Revenues Earned on Account (Source of Assets)


May 19

Coordinated and finalized elaborate bridal


arrangements for three couples and billed fess of
P12,000 per couple. Additional services include
documents preparation, consultation with a feng
shui expert as to the ideal wedding date for
prosperity and harmony, provision for limousine
service and honeymoon trip.

Withdrawal of Cash y Owner (Use of Assets)


May 25

Yacapin withdrew P14,000 per personal expenses.

Salaries Paid (Use of Assets)


May 27

Paid salaries, P7,200.

Expenses Incurred but Unpaid (Exchange of Assets)


May 30

Received the ICC-BayanTel telephone bill, P1,400.

Accounts Receivable Partially Collected (Exchange of


Assets)
May 30

Received P24,000 from two clients for services


billed last
May 19.

Expenses Incurred and Paid (Use of Assets)


May 31

Settled the electricity bill of P3,000 for the month.