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    Module 2 Key To Corrections

    Uploaded by

    Plame Gasero
    This document contains a key to corrections for an accounting technician exam. It provides example journal entries to correct accounting errors, including adjusting entries for prepaid expenses, unearned revenue, and depreciation. It also contains sample solutions for accounting equation and financial statement problems.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Module 2 Key To Corrections

    Uploaded by

    Plame Gasero
    19 views5 pages
    This document contains a key to corrections for an accounting technician exam. It provides example journal entries to correct accounting errors, including adjusting entries for prepaid expenses, unearned revenue, and depreciation. It also contains sample solutions for accounting equation and financial statement problems.

    Original Title

    Module 2 Key to Corrections

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    This document contains a key to corrections for an accounting technician exam. It provides example journal entries to correct accounting errors, including adjusting entries for prepaid expenses, unearned revenue, and depreciation. It also contains sample solutions for accounting equation and financial statement problems.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    19 views5 pages

    Module 2 Key To Corrections

    Uploaded by

    Plame Gasero
    This document contains a key to corrections for an accounting technician exam. It provides example journal entries to correct accounting errors, including adjusting entries for prepaid expenses, unearned revenue, and depreciation. It also contains sample solutions for accounting equation and financial statement problems.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    CERTIFIED ACCOUNTING TECHNICIAN LEVEL 1

    MODULE 2

    KEY TO CORRECTION

    E1:

    Item Item
    Expense Method Asset Method
    No. No.
    Insurance Expense 24,000 Prepaid Insurance 24,000
    1 7
    Cash 24,000 Cash 24,000
    2 P14,000 (P24,000/12 x 7 months) 8 P10,000 (P24,000/12 x 5 months)
    Prepaid Insurance 14,000 Insurance Expense 10,000
    3 9
    Insurance Expense 14,000 Prepaid Insurance 10,000
    4 Asset 10 Expense
    5 Decreasing 11 Decreasing
    6 P10,000 12 P14,000

    E2:

    Item
    Income Method Item No. Liability Method
    No.
    Cash 60,000 Cash 60,000
    1 7
    Rent Income 60,000 Unearned RI 60,000
    2 P45,000 (P60,000/12 x 9 months) 8 P15,000 (P60,000/12 x 3 months)
    Rent Income 45,000 Unearned RI 15,000
    3 9
    Unearned Rent Income 45,000 Rent Income 15,000
    4 Liability 10 Income
    5 Decreasing 11 Increasing
    6 P15,000 12 P45,000

    E3:

    Item Answers
    Notes Receivable 240,000
    1
    Cash 240,000
    2 P2,000
    3 P242,000
    4 P1,000
    Interest Receivable 1,000
    5
    Interest Income 1,000

    E4:

    Anna Mae Company


    Statement of Financial Performance
    For the Month Ending December 31, 2022

    Revenues:
    P 3,000
    Bicycle Repair Revenue
    Total Revenue 3,000
    Expenses:
    Uncollectible Accounts Expense 30
    Store Rent Expense 1040
    Utility Expense 154
    Insurance Expense 100
    Repair Supplies Exp. 196
    Depreciation Exp. 70
    Income Taxes Exp. 40
    Total Expenses 1,630
    Net Income 1,370

    Anna Mae Company


    Statement of Changes in Owner’s Equity
    For the Month Ending December 31, 2022

    Owner's Equity, beginning P --


    Anna Mae, Capital 12000
    Add: Net Income 1,370
    Subtotal 13,370
    Less: Anna Mae, Withdrawal 800
    Owner's Equity, December 31 P 12,570

    Anna Mae Company


    Statement of Financial Position
    For the Month Ending December 31, 2022

    Current Assets
    Cash 9,316
    Accounts Receivable P 1,690
    Less: Allowance for Uncollectible Accounts 30 1,660
    Prepaid Insurance 1,100
    Repair Supplies 194
    Total Current Asset 12,270
    Current Assets
    Non Current Assets
    Repair Equipment 4,400
    Less: Accum. Depr. 70 4,330
    Total Assets P 16,600

    Liabilities and Owner’s Equity


    Current Liabilities
    Accounts Payable 3,990
    Income Taxes Payable 40
    Current Liabilities 4,030
    Total Liabilities P 4,030
    Owner’s Equity P 12,570

    Total Liabilities & Owner’s Equity P 16,600


    Anna Mae Company
    Statement of Cash flows
    For the month Ending December 31, 2022

    Cash Flow from Operating Activities:


    Laundry Revenue P1,310.00
    Prepayment of Insurance (1,200.00)
    Payment of Store Rent (1,040.00)
    Payment for utilities (154.00)
    Payment for supplies purchased on account (200.00)
    Net cash provided by (used in) operating activities (P1,284.00)

    Cash Flow from Investing Activities:


    Downpayment for Repair Equipment (600.00)
    Net cash provided by (used in) investing activities (600.00)

    Cash Flow from Financing Activities:


    Initial Investment 12,000.00
    Withdrawal by Anna Mae (800.00)
    Net cash provided by (used in) financing activities 11,200.00
    Net Increase (Decrease) in Cash 9,316.00
    Add: Cash Balance at Beginning of the Period -

    E5:

    1. Temporary
    2. Permanent
    3. Permanent
    4. Temporary
    5. Permanent

    E6:
    1. P197,000 represents the revenue amount being closed to Income Summary account, and the P190,000
    represents the expenses closed to Income Summary account.
    2. P7,000 loss.
    3. Dec. 31 Lalala, Capital P7,000
    Income Summary P7,000
    To close the income summary account to capital.

    E7:
    1. D
    2. D
    3. A

    E8:

    2022
    Jan. 1 Prepaid Expense 25,000
    Prepaid Insurance 25,000
    1 Interest Income 17,000
    Interest Receivable 17,000

    1 Salaries Payable 35,000


    Salaries Expense 35,000

    1 Unearned Rent Revenue 80,000


    Rent Revenues 80,000

    E9:
    Reversing Entries:

    Jan. 1 Salaries Payable 1,800


    Salaries Expense 1,800

    1 Consulting Revenues 10,000


    Fees Receivable 10,000
    E10:

    E11:

    1. False – reflected in the statement of financial position is the adjusted/ending balance of merchandise inventory
    account.

    2. True

    3. False

    4. False – reflected in the debit column of statement of financial performance is the unadjusted/beg balance, while
    adjusted/ending balance in the credit column.

    5. True

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