iLakan Consulting — January 2026
Lakan Consulting is an established sole-proprietorship consultancy. Its books carry balances from last year — including a 12-month insurance policy paid in advance on January 1 and a ₱36,000 client advance for a three-month engagement (January–March). Those two balances are exactly why this chapter exists. The business and its figures are illustrative and do not appear in the printed book.
Opening balances · Jan 1, 2026
Transactions during January
- Jan 5 — Billed clients for services, ₱60,000.
- Jan 12 — Collected ₱45,000 of clients' accounts.
- Jan 15 — Paid staff salaries, ₱20,000.
- Jan 20 — Paid ₱12,000 of accounts payable.
- Jan 26 — Consulting fees received in cash, ₱25,000.
- Jan 30 — Owner withdrew ₱8,000 cash.
1Journalize — the general journal
Six quick entries — the warm-up. The real work of this chapter happens in Stage 4.
2The ledger — T-accounts (auto-posted)
Opening balances plus every journal entry above, posted live.
3Unadjusted Trial Balance
Balanced — yet wrong: it still shows 12 months of insurance as an asset, three months of fees as a liability, no depreciation, and salaries nobody has recorded. That is exactly what adjusting entries fix.
4Adjusting entries — all five families
Work each adjustment from the month-end facts: (a) prepaid expense — insurance, (b) prepaid expense — supplies, (c) depreciation, (d) unearned revenue earned, (e) accrued revenue, and (f) accrued expense. Watch each one move the worksheet and statements below.
5Ten-column worksheet (auto-built)
Adjusted trial balance extended into the Income Statement and Balance Sheet columns. Note how the six adjustments changed nearly every line.
6Financial statements
Try this: Reset, fill only Stages 1–3, and read the statements. Then enter the adjustments and compare — without them, income and assets are misstated. That comparison is Chapter 6.