The document contains exercises on accounting topics such as deferrals, depreciation, adjustments, and classification of accounts. The exercises provide journal entries, adjusting entries, and questions to practice recording transactions and preparing financial statements.
The document contains exercises on accounting topics such as deferrals, depreciation, adjustments, and classification of accounts. The exercises provide journal entries, adjusting entries, and questions to practice recording transactions and preparing financial statements.
The document contains exercises on accounting topics such as deferrals, depreciation, adjustments, and classification of accounts. The exercises provide journal entries, adjusting entries, and questions to practice recording transactions and preparing financial statements.
The document contains exercises on accounting topics such as deferrals, depreciation, adjustments, and classification of accounts. The exercises provide journal entries, adjusting entries, and questions to practice recording transactions and preparing financial statements.
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Name: Christine Joy C.
Montalvo Class Schedule: ______________________
Learning Activity
Directions: Read and answer the following exercises and problems and follow the instructions given in each exercise. Submit your work in the pigeon boxes which are provided in your department/college, or to google class on or before the date as reflected in your study schedule.
EXERCISE 1
Problems on Deferrals
On August 1, 2021, Naneth Naglibog Co, insured its property with Consolidated Insurance Company and pays premium of P24,000 for a one-year policy contract covering the period from Aug. 1, 2021 to August 1, 2022. The accounting period ends on December 31, 2021.
Assuming Expense Method is Used:
1. What is the journal entry to record the prepayment.
Insurance Expense P24,000 Cash P24,000
2. In your adjusting entry, what account will you record? Expense or Asset? Asset 3. What is the adjusting entry on December 31, 2021? Prepaid Insurance P24,000 Insurance Expense P24,000
4. In your adjusting entry, are you increasing or decreasing the Insurance Expense account? Decreasing
Assuming Asset Method is Used:
1. What is the journal entry to record the prepayment.
Prepaid Insurance P24,000 Cash P24,000
2. In your adjusting entry, what account will you record? Expense or Asset? Expense 3. What is the adjusting entry on December 31, 2021? Insurance Expense (24,000/12months)x 5 months P10,000 Prepaid Insurance P10,000
4. In your adjusting entry, are you increasing or decreasing the amount of your Prepaid Insurance account? Decreasing EXERCISE 2
On October 1, 2021, Mavi Klaro Na Realty Co. collected the amount of P180,000 representing advanced rental from a tenant who occupies a space of the building. The advanced rental will cover the period from Oct. 1, 2021 to Oct. 1, 2022. The accounting period end on December 31, 2021.
Assuming that Income Method is Used:
1. What is the journal entry to record pre-collection?
Cash P180,000 Rent Revenue P180,000
2. In your adjusting entry, what account will you record? Income or Liability? Income 3. What is the adjusting entry on December 31, 2021? Rent Revenue (180,000x9/12) P135,000 Unearned Rent Revenue P135,000
4. In your adjusting entry, are you increasing or decreasing the amount of your Rental Income account? Increasing
Assuming that Liability Method is Used:
1. What is the journal entry to record pre-collection? Cash P180,000 Unearned Rent Revenue P180,000
2. In your adjusting entry, what account will you record, Income or Liability? Liability 3. What is your adjusting entry on Dec. 31, 2021? Unearned Rent Revenue(180,000x3/12)P45,000 Rent Revenue P45,000
4. In your adjusting entry are you increasing or decreasing the amount of your Unearned Rental Income account? Decreasing EXERCISE 3
Problem on Provision for Depreciation
On October 1, 2021 Nicole Salon & Spa owned by Nicole Lazo bought a brand new “Koppel” air conditioning unit for P280,000 including freight and installation cost. The unit has an estimated life of 10 years and has a salvage value of P10,000 at the end of its life. The accounting period ends on December 31, 2021. Answer the following questions 1. What is the journal entry to record the cost of equipment together with the incidental cost? 2. How much is the computed annual depreciation? Cost of Asset − Salvage Value P 280,000 −10,000 Annual Depreciation ¿ = =P27,000 Estimated Life∈Years 10 years 3.How much is the computed depreciation on December 31, 2021? P27,000 x 3/12 = P6,750 4.What is the adjusting entry to record the depreciation on December 31, 2021? Depreciation expense P27,000 Accumulated Depreciation P27,000
5. What is the “net book value” or “carrying amount” of the equipment as of December 31, 2021? Equipment P 280,000 Less: Accumulated Depreciation ( 27,000) Net Book Value P253,000 EXERCISE 4
Adjustments to Adjusted Trial Balance
Cora Tabangi Preliminary Trial Balance December 31, 2021
Cash in Bank P175,000 a.) P7,000 d.) P172,000 P10,000 Accounts Receivable 80,000 80.000 Est. Uncollectible Accounts 500 b.) 300 800 Supplies Inventory 25,000 e.)10,000 15,000 Office Equipment 160,000 160,000 Acc. Depreciation - Office Equip. c.)16,000 16,000
Accounts Payable 50,000 d.) 10,000 40,000
Accrued Salaries Expense f.) 14,000 14,000 Tabangi, Capital 328,500 328,500 Service Income 85,000 a.)7,000 92,000 Uncollectible Accounts b.) 300 300 Depreciation Expense c.) 16,000 16,000 Salaries Expense 24,000 f.) 14,000 38,000 Supplies Used e.)10,000 10,000 Total P464,000 P464,000 P47,300 P47,300 P491,300 P491,300
The following omissions were discovered in the course of your examination:
1) Cash received from a customer for services rendered was not recorded in the book. This was covered by Cash Sales Invoice #0132 dated December 31, 2021, P7,000. 2) Estimated Uncollectible Accounts should be adjusted to equal to 1% of the outstanding accounts receivable. 3) Office Equipment was acquired on July 1, 2021 with an estimated life of 5 years without scrap value. 4) Payment to a supplier’s account in the amount of P10,000 was inadvertently omitted. This was covered by Check Voucher 5) Supplies that were actually on hand when physical counting was made, 10,000. 6) Unpaid salaries as of December 31, 2021, P14,000 Required: Prepared an adjusted trial balance. (Use letter-sequencing for your adjusting entries)
EXERCISE 5
Listed below are the real and nominal accounts. On the space provided. Place a “check mark” as to what section of the worksheet they are to be extended.
(FOR NOMINAL (FOR REAL
ACCOUNTS) ACCOUNTS) Income Statement Balance Sheets Accounts Dr Cr Dr Cr Sample : Cash in Bank √
1 Rodrigo Robredo, Capital ü
2 Rent Expense ü 3 Rent Income ü 4 Prepaid Rent ü 5 Accrued Rent Income ü 6 Unearned Rent Income ü 7 Accrued Rent Expense ü 8 Rodrigo Robredo, Drawing ü 9 Depreciation Expense ü 10 Accumulated Depreciation ü 11 Store Equipment ü 12 Office Supplies Expense ü 13 Office Supplies Inventory ü 14 Accounts Receivable ü 15 Estimated Uncollectible Account ü 16 Uncollectible Account ü 17 Service Revenue ü 18 Petty Cash Fund ü EXERCISE 6
Start-up Trucking Services
Trial Balance June 30, 2021
Debit Credit
Cash in Bank P 1,020,000
Petty Cash fund 1,000 Accounts Receivable 120,000 Estimated Uncollectible Account 1,200 Unused supplies 15,000 Prepaid Insurance 8,500 Prepaid Rent 30,000 Delivery Truck 1,500,000 Acc. Depreciation - Del. Truck 250,000 Accounts Payable 130,000 Han-Mi, Capital 1,818,500 Han-Mi, Drawing 50,000 Trucking Income 935,000 Taxes and Licenses 10,000 Repairs and Maintenance 27,000 Retainer Fees 25,000 Salaries and Wages 320,000 Utilities Expense 8,200
Total P 3,134,700 P 3,134,700
Additional Information
1. Provision for Uncollectible Account should be at 2% of the outstanding receivable
amount. 2. Supplies actually on hand P5,000. 3. Of the prepaid Insurance, P6,200 has actually expired. 4. P 18,000 of the prepaid rental has expired. 5. Depreciation Expense for the period is P 105,000 REQUIRED.
A. An 8-column worksheet (PRESENTED ON THE NEXT PAGE)
