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Assignment#2

This document contains journal entries, calculations, and summaries related to warranty contracts, premium inventory, unredeemed premiums, loyalty points, gift certificates, returnable containers, subscriptions, and current liabilities. Key information includes recording unearned revenue from warranty contracts and recognizing it as revenue over the contract period, tracking premium inventory and claims, calculating unredeemed premiums, determining loyalty point and subscription revenue and liabilities over multiple periods.

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Kristine Esplana Toralde
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
97 views

Assignment#2

This document contains journal entries, calculations, and summaries related to warranty contracts, premium inventory, unredeemed premiums, loyalty points, gift certificates, returnable containers, subscriptions, and current liabilities. Key information includes recording unearned revenue from warranty contracts and recognizing it as revenue over the contract period, tracking premium inventory and claims, calculating unredeemed premiums, determining loyalty point and subscription revenue and liabilities over multiple periods.

Uploaded by

Kristine Esplana Toralde
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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TORALDE, MA.KRISTINE E.

CBET-01-501E

1-8.
a.) 2019

Cash (P720 x 1,000) P720,000


Unearned Revenue from Warranty Contracts P720,000
To record unearned revenue from
warranty contracts.

Cost of Warranty Contracts 25,000


Cash 25,000
To record costs incurred.

Unearned Revenue from Warranty Contracts 72,000


Revenue from Warranty Contracts 72,000
To record revenue for the period.
(P720,000 x 20% x 1/2 = P72,000)

2020

Cash (P720 x 1,200) P864,000


Unearned Revenue from Warranty Contracts P864,000
To record unearned revenue from
warranty contracts.

Cost of Warranty Contracts 100,000


Cash 100,000
To record costs incurred.

Unearned Revenue from Warranty Contracts 266,400


Revenue from Warranty Contracts 266,400
To record revenue for the period.
(720,000x20%x1/2) + (720,000x30%x1/2) = 180,000
(864,000x20%x1/2) = 86,400
P266,400
b.) 2019 2020
Unearned Revenue from Warranty Contracts, Jan 1 P 0 P648,000
Sale of Contracts 720,000 864,000
Less : Warranty Contracts Earned 72,000 266,400
Unearned Revenue from Warranty Contracts, Dec 31 P648,000 P1,245,600

c.) 2019 2020


Revenue from Warranty Contracts P72,000 P266,000
Less: Cost of Warranty Contracts 25,000 100,000
Profit from Warranty Contracts P47,000 P166,000

1-9.
a.) Premium Inventory (1,500 x P150) P225,000
Cash P225,000
To record purchase of premiums.

b.) Cash (1,000,000 x 15) 15,000,000


Sales 15,000,000
To record sales of bottles of
Accountant Tea

c.) Premium Expense 300,000


Estimated Premium Claims Outstanding 300,000
To record distribution of T-shirts.
(1,000,000x40%)/100 = 4,000
(4,000 – 1,000) x P100 = P300,000

1-10.
a.) Unearned Revenue for Unredeemed Premium
(300,000 x 30%)/20 = 4,500 Premiums
(4,500 – 4,000) x P28 = P14,000

b.) Selling Price of Main Product P9,000,000


Selling Price of Premium [(300,000x30%)/20]x P40 180,000
Total Selling Price P9,180,000
Allocation
To Main Product (P9,000,000x900/918) P8,823,529
To Premium (9,000,000x18/918) 176,471
Total P9,000,000

Additional Sales (P176,471 x 4,000/4500) P156,863

1-12.
a.) Revenue for the year 2019:
25,000/90,000 x P100,000 P27,778
Revenue for the year 2020:
[(25,000+35,000)/95,000]xP100,000 P63,158
Less: Revenue from Previous Redemption 27,778
Revenue recognized in 2020 P35,380

b.) Liability in 2019


Total Market Value of Award Point P100,000
Less: Revenue from Previous Redemption 27,778
Liability at December 31, 2019 P 72,222

Liability in 2020
Total Market Value of Award Point P 72,222
Less: Revenue from Previous Redemption 35,380
Liability at December 31, 2020 P 36,842

1-13.

Cash P2,000,000
Unearned Revenue for Gift Certificate Outstanding P2,000,000
To record sold of gift certificate.

Unearned Revenue for Gift Certificate Outstanding 1,280,000


Sales 1,280,000
To record redeemed gift certificate.
1-15.

Balance of Deposit for Returnable Container, Jan 1, 2020 P250,000


Deposit Received 200,000
Deposit Refunded during the year (267,000)
Deposit Forfeited (100,000-82,000)+(150,000-110,000) ( 58,000)
Refundable Deposit for Returnable Container, Dec 31, 2020 P125,000

1-16.

a.) 2017 2019


Beginning Unearned Subscription Revenue P1,200,000
Subscription sold P5,000,000 4,500,000
Expired Subscription in 2017 (1,000,000)
Expired Subscription in 2018 (2,800,000) (1,200,000)
Ending Unearned Subscription Revenue P 1,200,000 P4,500,000

Unearned Subcription Revenue at January 1, 2019 = P4,500,000

b.) 2019

Cash P5,500,000
Unearned Subscription Revenue P5,500,000
To record advances.

Unearned Subscription Revenue 5,000,000


Subscription Revenue 5,000,000
To record expiration of subscription.
(1,200,000+2,000,000+1,800,000)

2020

Cash 7,000,000
Unearned Subscription Revenue 7,000,000
To record advances.

Unearned Subscription Revenue 5,700,000


Subscription Revenue 5,700,000
To record expiration of subscription.
(1,300,000+2,400,000+2,100,000)
c.) 2019 2020
Beginning Unearned Subscription Revenue P4,500,000 P5,000,000
Subscription Sold 5,500,000 7,000,000
Expired Subscription from year 2017 (1,200,000)
Expired Subscription from year 2018 (2,000,000) (1,300,000)
Expired Subscription from year 2019 (1,800,000) (2,400,000)
Expired Subscription from year 2020 (2,000,000)
Ending Unearned Subscription Revenue P5,000,000 P6,300,000

1-17
Accounts Payable P270,000
Mortgage Payable 1,300,000
Bank Notes Payable[P300,00-(50,000x4)] 100,000
Interest Payable 7,500
Liability for Damages (600,000+900,000)/2 750,000
Value Added Tax Payable (2,688,000/1.12)0.12 288,000
Income Tax Payable (865,000-550,000) 315,000
SSS Premium Payable (45,000+50,000) 95,000
PhilHealth Premium Payable (22,000+28,000) 50,000
Pag-Ibig Contribution Payable (18,000+20,000) 38,000
Withholding Tax Payable 120,000
Total Current Liabilities P3,333,500

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