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Activity Worksheet 005

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Denver Colilihan
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15 views2 pages

Activity Worksheet 005

Uploaded by

Denver Colilihan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BAACCEN

ACTIVITY WORKSHEET FOR EL STUDENTS


PROFESSOR: Alberto S. Malquisto, Jr. No. 005
__________________________________________________________________________________________

Unit 6: Adjusting Entries and Adjusted Trial Balance

Name: _________________________________________________________________________________ SECTION CODE: _________

Please read the required activities carefully and make sure you understand the facts before you begin
answering. Please submit your answers through CANVAS ASSIGNMENTS using MS Word or PDF.

Your file name should be similar to this example: MALQUISTO_ASSIGNMENT005

For problem I, II and III, show supporting computations.

I. A machine was acquired by the entity on June 1 at a price of P50,000. The said machine has a
salvage value of P5,000 and an estimated useful life of 10 years.

a. How much is the carrying value of the machine at year end (December 31)?
a. At what amount should depreciation expense be recorded for the year?

II. The company has appropriately made an adjusting entry at the end of the first year shown
below:
Prepaid insurance 30,000
Insurance expense 30,000

The insurance was paid at the beginning of the year and covers 4 years.

a. How much is the actual amount of expense or the expired portion of the insurance?
b. At what amount was the transaction (payment of insurance) originally recorded?
c. When the transaction was originally recorded, what account was debited?

III. SAN uses expense method of recording prepayments. At the beginning of the current year, an
advance rental of ₱36,000 was paid by SAN to the owner of the commercial building that his
business occupies. Said payment covers a 3-year rent.

a. After the necessary adjustments in the 1st year, how much is the expense portion of the rent?

IV. Analyze the following independent situations and supply the corresponding adjusting entries for
the year ending December 31, 2019

a. An insurance premium was paid in advance by the company for ₱5,000,000. The insurance
covers 5 years and was paid on June 30, 2019. (Use Asset Method)

b. A machine with a total cost of ₱150,000 and salvage value of ₱5,000 was acquired last
March 31, 2019. The estimated life is 10 years. Straight line method of depreciation is used.

c. Before adjustments, supplies had a balance of ₱10,000. At year-end, only ₱1,500 worth of
supplies remained on hand. (Use Asset Method)

d. A loan of ₱1,000,000 was obtained on April 1, 2019. Said loan bears interest of 10%
annually which has not yet been paid.

e. Armando, the owner of a commercial building received in advance an amount of ₱50,000


as rental from one of its tenants. The rental covers 5 months and was received on September
1, 2019. (Use Liability Method)

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V. You were hired as the new accountant of a small business towards the end of the calendar year.
The previous accountant turned over to you the UNADJUSTED Trial balance for the 1 st year of
operation. Fortunately, you were able to get useful information to guide you.

INFORMATION:

a. Unused supplies at the end of the period is ₱2,900


b. The rent was paid at the beginning of the year and covers a 3-year rent
c. Machinery was purchased at the beginning of February and has a salvage value of ₱10,000
with a useful life of 10 years. Furniture was acquired at the beginning of the year with no
residual value and has a life of 9 years.
d. The notes payable is due and demandable in two years and the loan related to it was
obtained on December 1 of the current year. It bears interest of 10% per year.
e. Salaries amounting to ₱30,000 has remained unrecorded and unpaid
f. A ₱6,000 worth of accounts receivable is doubtful of collection.

DAP GENERAL REPAIRS AND OTHER SERVICES


Unadjusted Trial Balance
December 31, 2020

PARTICULARS Debit Credit

Cash 2,050,000
Accounts Receivable 70,000
Office Supplies 7,000
Prepaid Rent 30,000
Machinery and Equipment 310,000
Furniture and Fixtures 180,000
Accounts Payable 28,000
Notes Payable 600,000
Dap, Capital 959,500
Service Revenue 1,070,000
Miscellaneous Expense 4,500
Utilities Expense 6,000

2,657,500 2,657,500

REQUIREMENTS:
a. Prepare the adjusting entries for the company on December 2020.
b. Prepare the ADJUSTED TRIAL BALANCE in good form (December 2020).

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