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    Acc Activity

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    Joyce Eguia
    Here are the adjusting entries needed for the year ended December 31, 2019: Dec. 31 Rent Expense 90,000 Prepaid Rent 90,000 (To record one year's rent expense) Dec. 31 Depreciation Expense 540,000 Accumulated Depreciation 540,000 (To record annual depreciation on furniture) Dec. 31 Salaries Expense 150,000 Salaries Payable 150,000 (To record accrued salaries) Dec. 31 Interest Expense 45,000 Interest Payable 45,000 (To record accrued interest on notes payable) Total Adjustments: 8

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    Acc Activity

    Uploaded by

    Joyce Eguia
    66 views6 pages
    Here are the adjusting entries needed for the year ended December 31, 2019: Dec. 31 Rent Expense 90,000 Prepaid Rent 90,000 (To record one year's rent expense) Dec. 31 Depreciation Expense 540,000 Accumulated Depreciation 540,000 (To record annual depreciation on furniture) Dec. 31 Salaries Expense 150,000 Salaries Payable 150,000 (To record accrued salaries) Dec. 31 Interest Expense 45,000 Interest Payable 45,000 (To record accrued interest on notes payable) Total Adjustments: 8

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    Here are the adjusting entries needed for the year ended December 31, 2019: Dec. 31 Rent Expense 90,000 Prepaid Rent 90,000 (To record one year's rent expense) Dec. 31 Depreciation Expense 540,000 Accumulated Depreciation 540,000 (To record annual depreciation on furniture) Dec. 31 Salaries Expense 150,000 Salaries Payable 150,000 (To record accrued salaries) Dec. 31 Interest Expense 45,000 Interest Payable 45,000 (To record accrued interest on notes payable) Total Adjustments: 8

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    66 views6 pages

    Acc Activity

    Uploaded by

    Joyce Eguia
    Here are the adjusting entries needed for the year ended December 31, 2019: Dec. 31 Rent Expense 90,000 Prepaid Rent 90,000 (To record one year's rent expense) Dec. 31 Depreciation Expense 540,000 Accumulated Depreciation 540,000 (To record annual depreciation on furniture) Dec. 31 Salaries Expense 150,000 Salaries Payable 150,000 (To record accrued salaries) Dec. 31 Interest Expense 45,000 Interest Payable 45,000 (To record accrued interest on notes payable) Total Adjustments: 8

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    of 6

    Illustrative Exercises

    Problem 1

    Prepare the adjusting entries as of December 31 related to the following events happened within the
    current year:

    1. The accountant erroneously recorded the amount of supplies bought for cash as P189,790. In fact,
    the correct amount paid was P198,709.
    2. The entity bought a furniture and fixture last January 31, 2018. The cost of the furniture and
    fixtures was P550,000. The furniture and fixture can be sold at a scrap value of P50,000. The
    useful life of the furniture and fixtures is 5 years.
    3. The entity received P800,000 cash on October 31, 2018. The cash received is for the advance
    payment of advertising services good for 5 months. During October 31, the accountant recorded a
    credit to Unearned Advertising Revenue for P800,000.
    4. The entity paid the P450,000 insurance in an known insurance provider company. The payment
    was made on September 1, 2018. The insurance policy acquired is good for 10 months. It was
    discovered that the accountant recorded such payment as debit to Insurance Expense on
    September 1
    5. The accountant erroneously recorded the payment of P50,000 for accounts payable as notes
    payable and the amount recorded was P5,000.

    Answers:

      A Company    

    Adjusting Journal
      Entries  
      20XX    
           

    Date Accounts Debit Credit


    Dec. 31 Supplies expense 189,790  
      supplies   189,790
    Dec. 31 Furniture and fixture expense 150.00  
      Furniture and fixture   150.00
    Dec. 31 Interest Expense 200.00  
      Prepaid Insurance   200.00
    Dec. 31 Baking Supplies Expense 19,400.00  
      Baking Supplies   19,400.00
    Dec. 31 Office Supplies Expense 550.00  
      Office Supplies   550.00
           
           
           
           
           
           
        20,508.33 20,508.33
    Problem 2

    The entity requires you to prepare an adjusting entry related to provision of accounts receivable:

    Accounts Receivable, December 31, 2018 P1,250,000


    Allowance for Doubtful Accounts P 125,000

    The allowance for doubtful account shows an unadjusted balance.

    Required: Prepare the adjusting entries related to the following cases:


    A. The allowance for the current year shall be 15% of accounts receivable.

    B. P15,000 of accounts receivable was written-off and then 20% of the accounts receivable
    shall be the allowance for the current year.

    Problem 3

    The entity of Leila operated last January 1, 2017. Then, the following transactions occurred in relation to
    the accounts receivable from January 1, 2017 to December 31, 2018.

    For year 2017


    August 1 Rendered service on account for P1,000,000
    November 1 Collected 25% of the accounts receivable recorded last August 1.
    December 1 Rendered service for P50,000. The customer paid only 25% of the
    amount.

    For year 2018


    February 28 Rendered services on account for P89,000
    July 1 40% of the total accounts receivable remaining as of December 31, 2017
    Were collected
    September 16 4,000 accounts receivable were written off
    December 17 Rendered service on account P90,000.
    Required: Prepare the adjusting entry for year 2017 and 2018 based on the following cases:
    A. The entity recognizes 5% of the 2017 accounts receivable be uncollectible and then will
    increase by 10% on 2018.
    B. The entity recognizes 5% of the 2017 accounts receivable be uncollectible and then will
    increase to 10% on 2018.

    Problem 4

    The following information pertains to the following fixed assets:

    Date of Purchase Amount Salvage Value Useful life


    Computer Equipment June 15, 2018 P25,000 5% of purchase 3 years
    price
    Furniture and August 31, 2017 P189,000 9,000 5 years
    Fixtures
    Land January 1, 2018 P10,000,000 None 50 years
    Building May 1, 2018 P7,950,000 10% of purchase 15 years
    price
    Equipment January 1, 2018 P345,000 25,000 8 years

    Required: Prepare adjusting entries for the year ended December 31, 2018 in relation to the
    aforementioned assets.

    Problem 5

    The following selected journal entries were discovered during the accounting period

    February 1, 2018 Cash 60,000


    Unearned Advertising Income 60,000
    Received for one year advertising services.

    March 30, 2018 Prepaid Insurance Expense 500,000


    Cash 500,000
    Advance payment of 2-year insurance expenses.

    May 1, 2018 Cash 1,500,000


    Loan payable 1,500,000
    Approved 360 days, 15% interest bearing loan
    payable.

    August 1, 2018 Cash 190,000


    Advertising Income 190,000
    Received cash for 10-months advertising
    services

    September 30, 2018 Notes Receivable 50,000


    Unearned Service Income 50,000
    Received a 120 days, 10% interest bearing note.
    Services rendered will commence on these date
    and good for 12 months services.

    November 1, 2018 Rental Expense 30,000


    Cash 30,000
    Payment of delivery vehicle rental fees for 12
    months.
    November 30, 2018 Cash 90,000
    Advertising Income 90,000
    Cash received for 3 month advertising services.

    Additional information:

    a. It was determined that a supplies purchasedennia on account was erroneously recorded for
    P177,650. The correct amount of purchase was P17,765.
    b. The P750,000 equipment purchased on account last May 2018 was recorded as furniture and
    fixtures.

    Required:
    A. Prepare necessary adjusting entry for the year ended December 31, 2018.

    PROBLEM 6

    Presented below, together with account numbers, is the unadjusted trial balance of M. Yanuario Travel
    Agency for the year ended December 31, 2019:

    M. Yanuario Travel Agency


    Unadjusted Trial Balance
    Dec. 31, 2019

    110 Cash P 126,000


    120 Accounts Receivable 645,000
    130 Prepaid Rent 360,000
    140 Office Supplies 63,000
    150 Furniture 2,175,000
    155 Accumulated Depreciation P 435,000
    210 Notes Payable 900,000
    220 Accounts Payable 285,000
    230 Salaries Payable
    240 Interest Payable
    310 Yanuario, Capital 1,680,000
    320 Yanuario, Withdrawals 1,200,000
    510 Salaries Expense 3,771,000
    520 Rent Expense
    530 Office Supplies Expense
    540 Depreciation Expense
    550 Interest Expense
    560 Miscellaneous Expense 93,000
    Total P 8,433,000 P 8,433,000

    Information pertaining to Yanuario’s accounts is as follows:


    I. On November 1, 2019, Yanuario paid Juanita Rabena Realtors P360,000 for six month rent
    on the office building commencing that date.
    II. Office supplies on hand at December 31, 2019 amounted to P27,000.
    III. Furniture has useful life of 28 years and with salvage value of P75,000.
    IV. At December 31, 2019, P105,000 salaries have been incurred but not yet paid.
    V. The P900,000 note payable was issued on October 1, 2019, It will be repaid in the 12 months
    together with interest at an annual rate of 24%.

    Required:
    A. Prepare the necessary adjusting journal entries.

    B. Establish a “T-account” for each account title found in the unadjusted trial balance. Enter
    the amount found in the unadjusted trial balance into the ledger account. Post the
    adjusting entries. Compute the adjusted balances of each account title.
    C. Prepare the Adjusted Trial Balance for the year ended December 31, 2019.

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