WORKSHEET AND FINANCIAL STATEMENTS

Entity A started operations on November 1, 20x1. The following were the transactions during the period:

November 1: Provided P100,000 cash as initial investment to the business.

November 2: Acquired equipment for P72,000 cash. The equipment has a useful life of 4 years. Entity A records depreciation expense only at year-end.

November 3: Paid a one-year insurance premium of P24,000. (Using asset method)

November 12: Purchased inventory costing P30,000 for cash. (Using periodic inventory system)

November 14: Sold goods for P30,000 cash.

December 1: Sold goods with sale price of P24,000 in exchange for a P24,000, 10%, one-year note receivable. Principal and interest are due at maturity.

December 5: Purchased inventory for P4,000 on account.

December 26: Sold goods for P34,000 on account.

December 27: Paid P2,000 account payable.

December 29: Collected P20,000 account receivable.

ADDITIONAL INFORMATION:

There is no beginning inventory. The ending inventory per physical count is P21,000.

Entity A determines at year-end that accounts receivable of P2,000 is doubtful of collection.

Salaries earned by employees during the period but were not yet paid amounted to P20,000.

REQUIREMENTS:

- Post the entries to the ledger using Ledger accounts.

- Prepare the unadjusted trial balance using a worksheet.

- Prepare the adjusting entries.

- Prepare the closing entries.