For tutorial purposes only

Prepare the necessary journal entry for the preceding transactions:

1. Miss Yoon Se-Ri invested P6,000,000 to open Landing on You Travel Services Company. Five (5)
employees were initially hired for the travel services team with two (2) drivers.

2. Paid pre-operating expenses for permit and licenses to start operations, P250,000 cash payment.
Bank borrowing was approved with a note of promise to pay, P100,000 payable in one year with 12%
interest upon repayment of the principal amount.

3. Purchased two (2) units of a shuttle 15-seater van amounting to P1,600,000 per vehicle, on account.

4. Purchased ten (10) computer equipment sets for operational purposes, P30,000 per unit, cash payment
made.

5. Purchased office supplies amounting to P50,000 and paid rent in advance covering 6 months’
equivalent rent, P150,000.

6. Purchased furniture and fixtures such as tables, chairs, cabinets and sofa set for guests and
clients, package of P600,000, P200,000 paid in cash, balance on account.

7. Started operations through rendering travel services to customers with the following details:

Destination Tara na sa Batanes 3 days 2 nights

Number of persons 10 persons
Price per person P7,316
Payment terms Cash payment

8. Paid the amount of one of the two shuttle vans that was purchased on account.

9. Paid salaries of employees, total of P95,000 in cash.

10. The ending balance of the Accounts Receivable account was P120,000. Services billed to Customer
for the period were P215,000 and collections on account from customers were P236,000. What was the
beginning balance of Accounts Receivable?

11. The specific methods used by accountants in carrying out the general guidelines provided by GAAP,
Including the numerous rules specifying how financial data should be recorded, classified,
summarized and reported are referred to as
a. Accounting Postulates c. Accounting Procedures
b. Accounting Conventions d. Accounting Principles
12. Financial statements shall be prepared at least
a. Annually c. Quarterly
b. Semi-annually d. Monthly

13. Basic lang ‘to Company sold a layout design to Nakakalito Inc. and will receive in royalties of
25% of future revenues associated with the said layout design. On December 31, 2019, basic lang
‘to Company reported royalties receivable of P70,000 from Nakakalito Inc. During 20220, basic lang
‘to Company received royalty payments of P200,000. Nakakalito Inc. Reported revenues of P2,000,000
in 2020 from the layout design. What amount should basic lang ‘to company report as royalty revenue
for 2020?

On March 1, 2022, Alice Guo Company purchased merchandise with a list price of P1,000,000. The supplier
allowed trade discounts of 20% and 10%. Credit terms were 2/10, n/30. On March 7, 2022, the company
returned damaged merchandise worth P20,000.

What amount shall be recognized as accounts payable on March 1, 2022 assuming the purchase is recorded
using the:
 For tutorial purposes only
14. Gross method?
15. Net method?

16. On June 1, 2024 an entity borrows P10,000,000 from a bank. Interest is agreed at 8% annually.
Principal payment of 2,000,000 will be paid every December 31. Compute for interest expense for
the year 2024

17. The primary responsibility for the preparation and presentation of the financial statements’ rests
with the
a. Management of the entity c. Internal auditor
b. Accountant of the entity d. External auditor

18. On January 2, 2011, Sandy Company bought equipment for a total cost of P500,000. It has estimated
useful life of 10 years and P50,000 residual value. What is the accumulated Depreciation expense
on January 1, 2016 using straight-line method?

19. At the beginning of the year, ABC Company assets amount to P15,000,000 and owner’s equity Amounting
to P8,000,000. During this year, assets increased by P5,000,000, while liabilities Decreases by
P2,000,000. How much is the owner’s equity at the end of the year?

20. The general guidelines used in accounting practice that are based on substantial authoritative
support are called
a. Accounting Postulates c. Accounting Procedures
b. Accounting Conventions d. Accounting Principles

Madali lang ‘to Company reports operating expenses in two categories: distribution and general &
administrative. The adjusted trial balance on December 31, 2013 included the following expense and
loss accounts:
Accounting and Legal fees 1,200,000; Advertising 1,500,000; freight out 800,000; Interest 700,000;
Loss on sale of Equipment 300,000; Officers’ salaries 2,250,000; Rent for office space 2,200,000*;
Sales salaries and commissions 1,400,000

*1/2 of the rented premises is occupied by the sales department.

21. What amount should be reported as finance costs?

22. The correct order in presenting current assets is

I. Cash
II. Accounts receivable
III. Inventories
IV. Prepaid expenses

a. I, II, III, IV c. I, III, II, IV

b. I, II, IV, III d. I, III, IV, II

Delta Company, under the accrual basis, had a rental income for the year 2020 Amounting to P800,000.
Additional information was given:

Unearned rental income for January 1, 2020 – P50,000

Unearned rental income for December 31, 2020 – P55,000
Accrued rental income, January 1, 2020 – P32,000
Accrued rental income, December 31, 2020- P43,000,

23. Under the cash basis, how much rental income should be reported by Delta Company for 2020?

24. Is a global phenomenon intended to bring about transparency and a higher degree of comparability
in financial reporting in order to achieve the goal of one uniform and globally accepted financial
reporting standards.