Alfredo’s Canteen use the FIFO method, Straight-line depreciation method, and the accounting method as part of the internal revenue’s requirement. They are required to generate their financials for the month of June 2021.

1.         As of 31 May 2021, Alfredo’s Canteen has the following Statement of Financial Position items

Cash – 500,000

Accounts Receivable – 800,000

Inventory – 325,000

Prepaid Inventory – 150,000

Prepaid Rent – 60,000

Equipment – 1,000,000

Accumulated Depreciation – 50,520.83

Accounts Payable – 484,479.17

Short-term Loans Payable – 300,000

Long-term Loans Payable – 750,000

Capital Outlay – 750,000

Retained Earnings – 500,000

2.         On June 1, 2021, they conducted a stock take and found that they still have 2,000 units of inventories. They decided to buy 1,000 units of inventory @ PHP 162.50 each. They paid 40% in cash and the rest in credit.

3.         On June 1, 2021, they paid for their rent and insurance. The rent costs PHP 10,000 per month and insurance costs PHP 25,000 per month.

4.         On June 1, 2021, they sold 500 units of budget meal 1 at a selling price of PHP 160.00 using 250 units of inventory. All the sales were paid in cash.

5.         On June 2, 2021, they received a reservation for 1 July ¬2021. This is a meeting for the faculty. There will be 100 participants that will be having breakfast, lunch, and snack. Lolo Alfredo gave them a package that costs PHP 1,750 per person. The customer agreed and paid 60% of the contract and the rest will be paid on 1 July 2021. The cost of sales for this event is 360 units of inventory.

6.         On 4 June 2021, they sold 1,500 units of budget meal 1 using 750 units of inventories. 60% were paid in cash and the rest in credit.

7.         On 10 June 2021, they sold 5,000 units of budget meal 1 using 2,750 units of inventories. 60% were paid in credit and the rest in cash.

8.         On June 15, 2021, they collected 85% of the outstanding credit sales as of 4 June 2021. Then, they also collected 50% of the credit sales from 10 June 2021.

9.         On June 15, 2021, they paid their utility bills worth PHP 45,000 from 28 May 2021.

10.       On June 21, 2021, the internal revenue collected PHP 50,000 of taxes for the financial year ending 31 December 2020.

11.       On June 26, 2021, they paid their employees for a total gross salary of PHP 60,000. They also paid and remitted in cash the employer’s contribution worth 2.50% of the total gross salary.

12.       On June 28, 2021, they received their utility bill worth PHP 46,500 due on 14 July 2021.

13.       The equipment they have as of 1 May 2021 was bought last 1 January 2021. It has an expected life of 8 years and a salvage value of PHP 30,000.00

14.       On June 30 2021, the received their telephone bill worth PHP 3,999 due on 16 July 2021.

15.       On June 30 2021, Income tax for May 2021 was recognized but not paid. Income tax rate is 30%

Find the following:

•           Manual Journal for transaction 2, 3, 5, 6, 13

Answer rating: 100% (QA)

solution Journal entries for required transaction ha... View the full answer