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FABM1 11 Quarter 4 Week 1 Las 3

The document provides instructions on preparing adjusting journal entries, including entries for uncollectible accounts, estimated uncollectible accounts, and unused supplies inventory. It gives examples of journal entries to record estimated uncollectible accounts based on a percentage of total accounts receivable and to record the usage of supplies inventory based on a physical count. Students are assigned to prepare adjusting journal entries for two scenarios involving accounts receivable and supplies inventory.

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Janna Plete
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15 views1 page

FABM1 11 Quarter 4 Week 1 Las 3

The document provides instructions on preparing adjusting journal entries, including entries for uncollectible accounts, estimated uncollectible accounts, and unused supplies inventory. It gives examples of journal entries to record estimated uncollectible accounts based on a percentage of total accounts receivable and to record the usage of supplies inventory based on a physical count. Students are assigned to prepare adjusting journal entries for two scenarios involving accounts receivable and supplies inventory.

Uploaded by

Janna Plete
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Name: _________________________________Grade&Section______________________Score:_________________________________

School: ________________________________Teacher:______________ _____________Subject: FABM _________________________


LAS Writer: Jovelyn P. Titular _Content Editor: Wilfredo A. Barluado____Language Editor: Jean Carlyn B. Maceda____
Lesson Topic: Adjusting Journal Entries (Q4-Week1,LAS3)_______________________________________________________________
Learning Target: Preparing of Adjusting Journal Entries (ABM_FABM11-Iva-d-33)____________________________________________
Reference: Lopez, R Jr., 2002 Millennial Edition. Fundamentals of Accountancy, Business and Management ________________________
(For Senior High School Students), Davao City, Philippines; RM LOPEZ,JR.,, Publishing. pp. 202-206___________________

Content: ADJUSTING JOURNAL ENTRIES

TYPES OF ADJUSTING ENTTRIES

(Continuation)

4. Provision for Estimated Uncollectible Accounts(Bad Debts)

 Relates to the company’s receivables which might not be collected.


 It recognized the anticipated loss that the business might incur arising from uncollectible accounts.

To illustrate:
Let us assume that ABC Company has an outstanding accounts receivable of 60,000. Based on past experience, it is
estimated that 2% is doubtful of collection at the end of the accounting period on December 31, 2020.
Journal Entry:
December 31 Uncollectible Accounts Expense 1, 200
Estimated Uncollectible Account 1,200
To record provision for uncollectible accounts which is computed of 2% of 60,000.

Statement of Financial Position


Current Asset:
Accounts Receivable 60,000
Estimated Uncollectible Accounts 1,200
Estimated Realizable Value. 58,800

The amount difference between Accounts Receivable of 60,000 and the Estimated Uncollectible Account of 1,200 is 58,800
which is called Estimated Realizable Value.

In the latter date it was proven that 300 of the 1,200 Estimated Uncollectible Account could no longer be collected, a subsequent
journal entry is prepared as follows:

Estimated Uncollectible Accounts 300


Accounts Receivable 300
To write off the Accounts Receivable.

5. Unused Supplies Inventory Adjustment

When supplies are purchased, these are debited to an asset account, called Supplies Inventory. At the end of the month,
the portion of what we originally recorded as Asset will turn into an Expense. Based on physical counting supplies on
hand, we will determine the actual cost of supplies inventory.
Example:
If we purchase supplies worth 20,000 and at the end of the month 8,000 worth of supplies were on hand, meaning the
12,000 worth of supplies should have been used.

Purchase of Supplies Recorded as Asset To take up the supplies Used


Supplies Inventory 20,000 Supplies Expense 12,000
Cash in Bank 20,000 Supplies Inventory 12,000
To record the supplies purchased To record cost of supplies that were used.

Activity. Prepare Adjusting Journal Entries:


Based on the given business instruction. Write your answer on sheet of bond paper. (5 points each).
Note: (Your adjusting journal entries answer, will be used in the next activity for the preparation of Worksheet)

1. UVM Corporation has an outstanding accounts receivable of 35,000. Based on past experience, it is estimated that 1% is doubtful
of collection at the end of the accounting period on December 31, 2020.

2. Purchase supplies amounting 8,000 of which 4,000 worth of supplies were on hand.

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