T1 P1

T2 P2
T3 P3
T4
T5
T6
T7
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T9
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Journalizing
T11

A presentation prepared by:

ANGEVIN B. ACAYLAR, CPA
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IDENTIFY THE FOLLOWING:
What is the normal
balance of an account?
- balance that increases the account
Normal Balances of Accounts
OBJECTIVES:
At the end of the session, the students must be able to:
• demonstrate understanding of the use and procedures to
be followed in making entries in the journal after
validation of transaction analysis is made;
• recognize the importance of debit and credit analysis
having played a pivotal role in the overall journalizing
process; and
• use account titles provided in the chart of accounts.
“Accounting is the language
of the business.”
Why do we need to
record?
 Reversing Identifying
Entries
Journalizing

Post-Closing
Trial Balance

Posting

Closing
Entries
Trial
Balance

Financial Adjusting
Statements Worksheet Entries
Recording

Journal
Double-entry system
of bookkeeping

Recognizes the two-fold effects of a

transaction
Justifies the equality of debit and credit
What is a journal paper?
 2018
Jan 1 Cash GL-11 100,000 00
S. Santos, Capital GL-31 100,000 00
To record investment.
Cash
Office Equipment Shows the number of
S. Santos, Capital
Shows
Shows the date when
thePayable an account in aShows
item or the accounts ledger the peso amount
Accounts
transactions took place of value
to received and
To
debited record
and investment
credited a or
aswith pageofofa a ledger
result
which parted with in a
assumption
transaction of a payable.
analysis as well as ait was
transferred transaction
brief or concise explanation of what
the transaction is about
What is a Chart of Accounts?

a list of account titles to guide bookkeeper

and accountant of what specific titles are to
be used in describing the exchange of
values in a transaction
Up next is the chart of accounts of DIPOLOG LAUNDRY
SERVICES, a laundry business that is owned and managed by
Mr. Severo Santos.
T1 T4 T7 T10
T2 T5 T8 T11
T3 T6 T9

JOURNAL
 Illustrative Problem: Davao Laundry Services
March 1 – Mr. Severo Santos opens a current account with
Allied Banking Corporation in the amount of ₱850,000 to start
with his laundry business under the trade name “Davao Laundry
Services.”

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

850,000 850,000

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services
March 2 – Purchased laundry supplies on account, ₱90,000
from the following suppliers:
SM City – Davao ₱35,000
Gaisano Mall 25,000
NCCC Mall 30,000
Total Payable ₱90,000

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

90,000 90,000
CHART JOURNAL
 Illustrative Problem: Davao Laundry Services

March 3 – Purchased laundry machine for cash, ₱150,000.

ANALYSIS

ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

150,000
(150,000)

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services
March 4 – Rendered laundry services on account, ₱80,000 to
the following customers:
Apo View Hotel ₱ 5,000
Grand Men Seng 35,000
Marco Polo Hotel 30,000
Royal Mandaya 10,000
Total Receivable ₱80,000

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

80,000 80,000

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services

March 5 – Paid taxes and licenses due to the government,

₱4,000.

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(4,000) 4,000

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services

March 6 – Mr. Severo Santos withdrew ₱10,000 cash from

the business for his personal use.

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(10,000) 10,000

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services

March 7 – The business borrowed money from Allied

Banking Corporation, ₱100,000 by issuing a 15-day note. It
was deposited to the account of Davao Laundry Services by
the bank.

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

100,000 100,000

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services

March 8 – The bank issued a debit memo, ₱1,000 for interest

and bank charges.

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(1,000) 1,000

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services
March 9 – Received cash of ₱45,000 representing collection
from the following customer’s account:
Grand Men Seng ₱30,000
Marco Polo Hotel 10,000
Royal Mandaya 5,000
Total Collection ₱45,000
ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

45,000
(45,000)

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services
March 10 – Partial payment of accounts, ₱60,000 to the
following suppliers:
SM City – Davao ₱25,000
Gaisano Mall 20,000
NCCC Mall 15,000
Total Payable ₱60,000

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(60,000) (60,000)

CHART JOURNAL
 Illustrative Problem: Davao Laundry Services

March 15 – Mr. Severo Santos hired an accountant/manager

for his business as he has plenty of things to attain to at
₱10,000 per month salary effective April 1, 2018.

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

NO JOURNAL ENTRY!
 Illustrative Problem: Davao Laundry Services
March 30 – The following expenses were paid by Davao
Laundry Services for the month in March 2018:
Space Rental ₱ 5,000
Light & Water 12,000
Salaries of Employees 10,000
Total Expenses Paid ₱27,000

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(27,000) 27,000

CHART JOURNAL
Thank you for listening!
 Accounting for Payroll
• Payroll is the sum of all compensation an entity is obliged
to pay to its employees for a given period of time or on a
given date.
• Laws of the Philippines require employers to withhold
payroll taxes, Social Security Services (SSS), PAG-IBIG
or HDMF, and Philippine Health Insurance Corporation
(PhilHealth) contributions form their employee’s gross
salaries and wages.
Withholding of taxes and other deductions from employee’s
paychecks affects the employer in several ways:
• it reduces the cash amount paid to employees;
• it creates a current liability for the employer; and
• it requires the employer to remit the amount withheld to
the government by specific deadlines.
Social Security Services
(SSS) Deductions
IILUSTRATION:
The monthly salary of Employee X is ₱10,200.

Employee’s Share = ₱363.30

Employer’s Share = ₱746.70
₱1,110.00
 Assume again that employee X’ salary is ₱10,200

PhilHealth Contribution

Employer’s Share = ₱125

Employee’s Share = ₱125
 HDMF/PAG-IBIG Contribution
MONTHLY CONTRIBUTION RATE
COMPENSATION
EMPLOYER EMPLOYEE

BASIC + COST OF 3% 3%
LIVING ALLOWANCE
Or ₱100 whichever is Or ₱100 whichever is
lower lower

If again, monthly salary of Employee X is ₱10,200,

then
EMPLOYEE’S CONTRIBUTION = ₱100
EMPLOYER’S CONTRIBUTION = ₱100
Withholding Income Tax

Under the National Internal Revenue Code (NIRC),

employers are required to deduct from the total salary of its
employee an amount corresponding to its withholding tax
table.
 Illustration
The following transactions, among others transpired during the
month of January:
Jan. 1 – Paid the salary of the employees:
Gross Salary ₱30,000
Less: SSS Contribution (1,000)
PHILHEALTH Con. (400)
PAG-IBIG Con. (200)
Withholding Tax (1,200)
Net Cash Paid ₱27,200

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(27,200) 2,800 30,000

JOURNAL
 Jan 31 – Set up the employer’s share for the contributions:
SSS Contribution ₱1,200
PHILHEALTH Contribution 600
PAG-IBIG Contribution 200

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

2,000 2,000

JOURNAL
 Jan 31 – Remitted the employee and the employer’s share
of the SSS, PHILHEALTH, PAG-IBIG contribution
and the withholding tax.

ANALYSIS
ASSETS LIABILITIES EQUITY DRAWING INCOME EXPENSE

(4,800) (4,800)

JOURNAL
The End