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    08 Sample-Activities

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    Princess Anne Mendoza
    This document provides examples of adjusting journal entries for various financial transactions at the end of an accounting period. The examples include entries for accrued interest on a mortgage, prepaid insurance, depreciation of buildings and equipment, unearned service revenue, accrued revenue, prepaid rent, and more. For each transaction, the adjusting entry to record the income, expense, asset, or liability for the appropriate period is given.

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    08 Sample-Activities

    Uploaded by

    Princess Anne Mendoza
    63 views19 pages
    This document provides examples of adjusting journal entries for various financial transactions at the end of an accounting period. The examples include entries for accrued interest on a mortgage, prepaid insurance, depreciation of buildings and equipment, unearned service revenue, accrued revenue, prepaid rent, and more. For each transaction, the adjusting entry to record the income, expense, asset, or liability for the appropriate period is given.

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    08_SAMPLE-ACTIVITIES

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    This document provides examples of adjusting journal entries for various financial transactions at the end of an accounting period. The examples include entries for accrued interest on a mortgage, prepaid insurance, depreciation of buildings and equipment, unearned service revenue, accrued revenue, prepaid rent, and more. For each transaction, the adjusting entry to record the income, expense, asset, or liability for the appropriate period is given.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    63 views19 pages

    08 Sample-Activities

    Uploaded by

    Princess Anne Mendoza
    This document provides examples of adjusting journal entries for various financial transactions at the end of an accounting period. The examples include entries for accrued interest on a mortgage, prepaid insurance, depreciation of buildings and equipment, unearned service revenue, accrued revenue, prepaid rent, and more. For each transaction, the adjusting entry to record the income, expense, asset, or liability for the appropriate period is given.

    Copyright:

    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 19

    SAMPLE ACTIVITIES

    ROMNICK E. BONTIGAO, CPA, CTT, MRITAX, MBA


    PROBLE
    M1
    Preparing Adjusting Entries at Year-End

    On June 30, 2015, the end of fiscal year, the


    following information is available to Noel Hungria’s
    Accountant for Making Adjusting Entries:

    From July 1, 2014 to June 30, 2015 – 12 months


    Among the liabilities of the entity is a P2,400,000
    mortgage payable. On June 30, the accrued
    interest on this mortgage amounted to P120,000.

    Answer:

    Interest Expense 120,000

    Interest Payable 120,000


    Assume that on, July 2, a Friday, the entity, which
    is on a five-day workweek and pays employees,
    paid its regular salaried employees P192,000.

    Answer:

    Salaries Expense 115,200 (192,000 / 5 x 3)

    Salaries Payable 115,200


    On June 29, the entity completed negotiations
    and signed a contract to provide services to a
    new client at an annual rate of P36,000.

    Answer: Memorandum Entry

    Memo entry: Completion of negotiation and contract


    signing for services amounting to P36,000 per year.
    The supplies account showed a beginning balance
    of P16,150 and purchases during the year of
    P37,660. The yes-end inventory revealed supplies
    on hand of P11,860.

    Answer:

    Supplies Expense 41,950

    Supplies 41,950
    The prepaid insurance account showed the following
    entries on June 30:

    Beg Bal: 15,300


    Jan 1: 29,000
    May 1: 33,600

    Answer:

    Insurance Expense 31,667

    Prepaid Insurance 31,667


    The annual depreciation is given below:

    Answer:
    Depreciation Expense – Buildings 73,000
    Accumulated Depreciation – Building 73,000
    Depreciation Expense – Equipment 218,000
    Accumulated Depreciation – Equipment 218,000
    On June 1, The entity completed negotiations with
    another client and accepted an advance of
    P210,000 for services to be performed in the next
    year.
    Answer:
    Cash 210,000
    Unearned Service Revenue (L) 210,000
    After service performance:
    Unearned Service Revenue (L) 210,000
    Service Revenue 210,000
    The entity calculated that as at June 30, it
    earned P35,000 on a P75,000 that will be
    completed and billed in August.
    Answer:
    Accounts Receivable 35,000
    Service Revenue 35,000
    PROBLE
    M2
    Preparing Adjusting Entries at Year-End

    Prepare the adjusting entry for Christine Gamba


    Cargo under each of the following for the year
    ending Dec. 31, 2015:
    Paid P24,000 for a 1-year fire insurance policy
    to commence on Sept. 1. The amount of
    premium was debited to Prepaid Insurance.
    Answer:
    Insurance Expense 8,000 (24,000 / 12 * 4)
    Prepaid Insurance 8,000
    Borrowed P100,000 by issuing a 1-year
    note with 7% annual interest to Century
    Savings Bank on Oct. 1, 2015.
    Answer:
    Interest = PRT
    100,000 * .07 = 7,000/12 * 3 = 1,749.99 or 1,750
    Interest Expense 1,750
    Interest Payable 1,750
    Paid P160,000 cash to purchase a delivery van
    (surplus) on Jan. 1. The van was expected to have
    a 3-year life and a P10,000 salvage value.
    Depreciation is computed on a straight-line basis.
    Answer:
    Depreciation =(160,000 – 10,000)/3 = 50,000 per year

    Depreciation Expense – Delivery Van 50,000


    Accumulated Depreciation – DV 50,000
    Received an P18,000 cash advance for a contract
    to provide services in the future. The contract
    required a 1-year commitment, starting April 1.

    Answer:

    Cash 18,000

    Unearned Service Revenue 18,000


    Purchased P6,400 of supplies on account. At
    year's end, P750 of supplies remained on
    hand.
    Answer:

    Supplies Expense 5,650


    Supplies 5,650
    Vested P90,000 cash in a certificate of deposit
    that paid 4% annual interest. The certificate
    was acquired on May 1 and carried a 1-year
    term to maturity.
    Answer:
    Interest = PRT = 90,000 x .04 x 1 = 3,600 / 12 * 8 = 2,400

    Interest Receivable 2,400


    Interest Income 2,400
    Paid P78,000 cash in advance on Sept. 1 for a
    1-year lease on office space.

    Answer: 78,000 / 12 = 6,500 * 4 = 26,000

    Rent Expense 26,000

    Prepaid Rent 26,000


    THANK YOU

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