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    Problem Solving

    Uploaded by

    Jharam Tolentino
    this is good for problem solving cases to enhance the capacity of the student

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    Problem Solving

    Uploaded by

    Jharam Tolentino
    22 views3 pages
    this is good for problem solving cases to enhance the capacity of the student

    Copyright

    © © All Rights Reserved

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    DOCX, PDF, TXT or read online from Scribd

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    this is good for problem solving cases to enhance the capacity of the student

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    22 views3 pages

    Problem Solving

    Uploaded by

    Jharam Tolentino
    this is good for problem solving cases to enhance the capacity of the student

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 3

    Problem Solving:

    Ms. Rex RAMBO, a graduate of BSBA opened the Rex RAMBO Construction Company on
    January 1, 2010. The following were the transactions and events of the business for the
    year:

    1. Investment of Ms. Rex RAMBO on January 1,2010:


    Cash P500,000
    Office equipment P355,000
    2. Paid rent of the facilities, P72,000
    3. Bought office supplies, P10,600.
    4. Paid taxes and licenses, P1,000.
    5. Bought Furniture and Fixture on April 1, 2010 to be used in the construction
    activities, P465,000; issued a note thereof.
    6. Cash receipts from services rendered, P100,000
    7. Billed customers for services rendered, P200,000
    8. Received a Note from a client as payment of service rendered, P120,000.
    9. Rent income received in advance, P10,000.
    10. Paid salaries, P150,000

    Items for adjustments:


    1. Accruals
    Accrued expenses:
    a. The Notes Payable of P465,000 is a one year note, 12%, dated June 1,2010.
    b. Salaries by the Construction workers had not been booked for the overtime
    rendered, P25,000.

    Accrued revenue:
    a. The note receivable from client of P120,000 is a 180-day note, 11%, dated
    September 1, 2010.

    2. Precollections/Deferred Revenues
    The P10,000 balance of Rent income- office space is an advance 10-month rent from a
    sublease contract of the office starting March 1, 2010.

    3. Prepayments
    The inventory of unused office supplies as at December 31, 2010 is valued at P1,800.

    4. Depreciation
    The depreciation policy of the company for the property and equipment is as follows:
    a. The estimated useful life of the office equipment is 5 years; estimated scrap
    value is 4% of original cost.
    b. The estimated useful life of the Furniture and Fixture is 10 years; estimated
    scrap value is P10,000.

    5. Bad debts
    Estimated bad debts is 6% of Accounts Receivable.

    Page 1 of 3
    Chart of Accounts
    ASSETS
    Cash
    Accounts Receivable
    Allowance for bad debts
    Notes Receivable
    Interest Receivable
    Unused Office supplies
    Office Equipment
    Accumulated Depreciation – Office Equipment
    Furniture and Fixture
    Accumulated Depreciation – Furniture and Fixture

    LIABILITIES
    Notes Payable
    Interest Payable
    Salaries Payable
    Unearned Rent Income

    CAPITAL
    Rex RAMBO Capital

    REVENUE
    Income from Services
    Rent Income
    Interest Income

    EXPENSES
    Rent expense
    Office supplies
    Taxes & Licenses
    Salaries expense
    Interest Expense
    Depreciation
    Bad Debts

    Page 2 of 3
    Required:
    Prepare the following;
    a. Income Statement
    Statement of Financial Position

    Page 3 of 3

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