Reference no: EM132825825

Question

DBS Accounting firm started operation only on April 3, 2014 and it provides accounting and tax services to big eatablishment in Metro Manila. Its accounting period ends Dec. 31, and on this date, adjusting entries are prepared. The trial balance of DBS Accounting Fim at Dec. 31, 2014 follows:

DBS ACCOUNTING FIRM
TRIAL BALANCE
DECEMBER 31, 2014

CASH. 120,000
ACCOUNTS RECEIVABLE. 60,000
OFFICE SUPPLIES. 50,000
PREPAID INSURANCE. 24,000
OFFICE EQUIPMENT. 240,000
FURNITURE AND FIXTURES 40,000
LAND. 800,0000
BUILDING. 1,300,000
ACCOUNTS PAYABLE. 168,000
LOAN PAYABLE. 500,000
DBS, CAPITAL. 1,800,000
PROFESSIONAL FEES. 540,000
SALARIES EXPENSE. 250,000
ADVERTISING EXPENSE. 36,000
TRANSPORTATION EXPENSE 10,000
UTILITIES EXPENSE. 70,000
MISCELLANEOUS EXPENSE 8,000
TOTAL. P3,008, 000 P3,008,000

Additional Information

1. An inventory ot office supplies on December 31, 2014 showed supplies on hand totaled P 38,000.

2. The prepaid insurance represents a one-year insurance policy on the building purchased on May 1, 2013.

3. The office Equipment is estimated to have a 5 year life with salvage value of P 40,000 starting trom April 1, 2013.

4. The furniture and fixtures is estimated to last for 10 years with no salvage value.

5. The est imated useful life of the building is 20 years with estimated salvage value of P 100,000.

6. The Professional fees include P 40,000 of advances made by one client for services still be rendered in the last week of December amounting to P 5,000 is schedule for payment on the first week of January 2015.

7. The company's estimate as allowance for uncollectible accounts is very minimal because it has not experienced defaulted accounts yet. The estimate for uncollectible accounts is 2% of Accounts Receivable.

REQUIRED:

a. Adjusting Entries
b. Adjusted Trial Balance