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Problem 6

This document provides the account balances from Rhina Calimlim's ledger on December 31, 2019. There are adjustments needed based on additional data. The adjustments include recording supplies used, doubtful accounts, depreciation, prepaid/accrued expenses, and interest income/expense. Ten adjusting entries are required to account for these adjustments before preparing the financial statements.

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Louise Esguerra
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929 views3 pages

Problem 6

This document provides the account balances from Rhina Calimlim's ledger on December 31, 2019. There are adjustments needed based on additional data. The adjustments include recording supplies used, doubtful accounts, depreciation, prepaid/accrued expenses, and interest income/expense. Ten adjusting entries are required to account for these adjustments before preparing the financial statements.

Uploaded by

Louise Esguerra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem 6.

The following account balances, before adjustments, were taken from the ledger of Rhina
Calimlim on December 31, 2019.

P310,00
Cash 0
Notes Receivable 100,000
Accounts Receivable 120,000
Allowance for Doubtful Accounts 8,000
Unused Office Supplies 50,000
Prepaid Rent 60,000
Office Equipment 120,000
Accumulated Depreciation-Office Equipment 20,000
Furniture and Fixtures 80,000
Accumulated Depreciation-Furniture and Fixtures 16,000
Notes Payable 50,000
Loans Payable - Bank 200,000
Unearned Professional fees 40,000
Calimlim, Capital 203,200
Calimlim, Withdrawal 42,000
Professional Fees 524,000
Salarie Expense 110,000
Transportation Expense 16,000
Advertising Expense 14,000
Light and Water Expense 9,000
Telephone Expense 18,000
Miscellaneous Expense 12,200

Data for adjustments:


1. Supplies on hand December 31, 2019, P27,000.
2. Doubtful accounts for the year, P4,000.
3. Prepaid rent, P18,000.
4. Annual depreciation: Office Equipment – 20%
Furniture and Fixtures – 10%
5. Accrued interest on loan payable, P15,000
6. Accrued interest on notes receivable, P7,000
7. Unearned Professional Fees, P10,000.
8. Accrued salaries, P14,000
9. Prepaid advertising, P2,000
10. Accrued telephone expense, P3,000

Requirements: Prepare the following:


1. Adjusting entries on Dec. 31, 2019
2. 10-column worksheet
3. Statement of Profit or Loss for the year ended Dec. 31, 2019
4. Statement of Changes in Owners’ Equity
5. Statement of Financial Position as of December 31, 2019
6. Closing entries on December 31, 2019
7. Post-closing trial balance on Dec. 31, 2019
8. Reversing entries needed on Jan 1, 2020

1. Dr. Unused Office Supplies - 50,000

Cr. Cash - 50,000

Dr. Supplies Expense - 23,000

Cr. Unused Office Supplies - 23,000

To record the used supplies

2. Dr. Doubtful Accounts Expense – 4000


Cr. Allowance for Doubtful Accounts – 4k

Accounts Receivable – P120000

Less: Allowance for doubtful Acc – 12000 P108,000

3. Dr. Prepaid Rent – 60000


Cr. Cash – 60k

Dr. Rent Expense – 42k

Cr Prepaid Rent – 42k

To record the expired portion of rent


4. Dr. Depreciation expense – office equipment – 24k
Cr. Accumulated dep. – off. Equi. – 24k

Dr. depreciation exp. – furniture and fixtures – 8k

Cr. Accumulated dep. furniture and fixtures – 8k.

5. Dr. Interest expense – loan payable – 15k


Cr. Interest expense – 15k

6. Dr. interest receivable – 7k


Cr. Interest income – 7k

7. Dr. Unearned prof. fees – 10k


Cr. Professional fees – 10k

8. Dr. Salaries Expense – 14k


Cr. Salaries Payable – 14k

9. Dr. adv. Exp. – 2k


cr. Pre. Adv. – 2k

10. Dr. tel. exp. – 3k


Cr. Accrued tel. exp – 3k

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