PROBLEM 1.

Give the year-end adjusting entry required by each of the following:

1. Depreciation on delivery equipment was estimated at P3, 500.

Dr. Depreciation Expense P. 3,500

Cr. Accumulated Depreciation – delivery equipment P. 3,500

2. Three month’s property taxes, estimated at P1, 500 have accrued but are unrecorded at the end of the
accounting period.

Dr. Accrued Tax Payable P 1,500

Cr. Tax Expense P. 1,500

3. The balance of the Repair Supplies account as of January 1 is P1, 200; P3, 500 of repair supplies are
purchased during the year, and a year-end inventory showed P1, 100 of supplies unused.

Dr. Repair Supplies Expense P. 1,100

Cr. Unused Supplies P. 1,100

4. Four employees earn a total of P1,000 per day for a five-day week that begins on Monday and ends on
Friday. They are paid for the week ended Friday, December 28.

Dr. Accrued Wages Payable P. 1,000

Cr. Wages Expense P. 1,000

5. The company owns and occupies a building, that was completed and occupied for the first time on April 1
of the current year. The building cost P200, 000, has an estimated life of 40 years and is not expected to have
any salvage value at the end of its life.

Dr. Depreciation Expense P. 5,000

Cr. Accumulated Depreciation – Building P. 5,000

6. A tenant, occupying a space of the building, agreed beginning on November 1 to pay P5, 500 per month,
and on that date he paid six month’s rent in advance. The amount paid was credited to the Unearned Rent
account.

Dr. Rent Income P. 22,000

Cr. Unearned Rent Income P. 22,000

7. Accrued drivers’ wages at the end of the year is P2, 500.

Dr. Accrued Wages Payable P. 2,500

Cr. Wages Expense P. 2,500

8. One month’s interest on the mortgage, P6, 000 has accrued.

Dr. Accrued Interest Payable P. 6,000

Cr. Interest Expense P. 6,000

9. The business has an account receivable of P10,500 in which 10% is proved uncollectible.

Dr. Doubtful Accounts P. 1,050

Cr. Allowance for Doubtful Accounts P. 1,050
 PROBLEM 2. Give the accounts to be credited to complete the uncompleted adjusting entries below.

Accounts Debited
Insurance Expense
1. Prepaid insurance
Accrued Rent Payable
2. Rent expense
Prepaid Rent
Office Supplies Expense
3. Office supplies used

4. Depreciation – Office equipment Accumulated Depreciation – Office Equipment

Accrued Rent Receivable

5. Rent income
Unearned Rent Income
6. Accrued interest income Interest Income

Accrued Interest Payable

7. Interest expense
Prepaid Interest
8. Unearned rent income Rent Income

Supplies Expense
9. Supplies on hand
Accrued Salary Payable
10. Salary expense
Prepaid Salary Expense

PROBLEM 3: The summary of the transactions of Mariel Vulcanizing shop for the month of April are presented below.
Using the answer sheet, journalize each transaction.

April 1 Mariel invested cash of P150,000.

DATE PARTICULARS PR DEBIT CREDIT
April 1 Cash 150,000
Mariel, Capital 150,000

April 2 Bought vulcanizing equipments, P100,000, cash

DATE PARTICULARS PR DEBIT CREDIT
April 2 Vulcanizing Equipment 100,000
Cash 100,000

April 3 Bought vulcanizing supplies on account P10,000.

DATE PARTICULARS PR DEBIT CREDIT
April 3 Vulcanizing Supplies 10,000
Accounts Payable 10,000

April 4 Hired 2 helpers with monthly salary of P5,000 each

DATE PARTICULARS PR DEBIT CREDIT
April 4 NO ENTRY

April 14Rendered services on account P20,000.

DATE PARTICULARS PR DEBIT CREDIT
April 14 Accounts Receivable 20,000
Service Income 20,000
April 15Borrowed money from a bank, P50,000.
DATE PARTICULARS PR DEBIT CREDIT
April 15 Cash 50,000
Bank Loan Payable 50,000

April 15Partial payment of account (vulcanizing supplies) P2,000.

DATE PARTICULARS PR DEBIT CREDIT
April 15 Accounts Payable 2,000
Cash 2,000

April 15Paid office rental for the month P10,000.

DATE PARTICULARS PR DEBIT CREDIT
April 15 Rent Expense 10,000
Cash 10,000

April 17Partial collection of account P10,000.

DATE PARTICULARS PR DEBIT CREDIT
April 17 Cash 10,000
Accounts Receivable 10,000

April 21Received cash from services rendered, P15,000.

DATE PARTICULARS PR DEBIT CREDIT
April 21 Cash 15,000
Service Income 15,000

April 21Paid 50% of bank loan

DATE PARTICULARS PR DEBIT CREDIT
April 21 Bank Loan Payable 25,000
Cash 25,000

April 28Mariel invested Furniture, P20,000.

DATE PARTICULARS PR DEBIT CREDIT
April 28 Furniture 20,000
Mariel, Capital 20,000

April 30Mariel withdrew cash P5,000.

DATE PARTICULARS PR DEBIT CREDIT
April 30 Mariel, Drawings 5,000
Cash 5,000

April 30Paid salaries and wages for the month, P20,000

DATE PARTICULARS PR DEBIT CREDIT
April 30 Salaries and Wages Expense 20,000
Cash 20,000
April 30Paid utilities expense, P5,000.
DATE PARTICULARS PR DEBIT CREDIT
April 30 Utilities Expense 5,000
Cash 5,000

CHART OF ACCOUNTS

ASSETS : Cash, Accounts Receivable, Vulcanizing Supplies, Vulcanizing Equipment, Furniture

LIABILITIES : Accounts Payable, Bank Loan Payable
OWNER’S EQUITY : Mariel, Capital, Mariel, Drawing
REVENUES : Service Income
EXPENSES : Rent Expense, Salaries and Wages Expense, Utilities Expense

PROBLEM 4. On the basis of the following ADJUSTED trial balance of GOLDMINE SHOP, prepare the following
financial statements (all in good form):

1. Statement of Operations
2. Statement of Owner’s Equity
3. Statement of Financial Position

GOLDMINE SHOP
Final Trial Balance
31 December 2015

Cash P P80,000
Accounts Receivable 20,000
Supplies 5,000
Shop Equipments 150,00
Accumulated depreciation- Shop Equipments P 15,000
Furniture and Fixtures 50,000
Accumulated depreciation- Furniture and Fixtures 5,000
Accounts Payable 32,000
Loan Payable 100,000
Goldie, Capital 100,000
Goldie, Withdrawal 10,000
Laundry Income 135,000
Depreciation Expense 20,000
Utilities Expense 15,000
Interest Expense 12,000
Postage, Telephone and Telegraph 5,000
Miscellaneous Expense 20,000
P 387,000 P 387,000
ANSWER SHEET FOR PROBLEM 4.1

GOLDMINE SHOP
Statement of Operations
31 December 2015

Laundry Income 135,000

Less: Expenses
Depreciation Expense 20,000
Utilities Expense 15,000
Interest Expense 12,000
Postage, Telephone and Telegraph 5,000
Miscellaneous Expense 20,000 72,000
NET INCOME 63,000

ANSWER SHEET FOR PROBLEM 4.2

GOLDMINE SHOP
Statement of Owner’s Equity
31 December 2015

Goldie, Capital, beg 100,000

Add: Net Income 63,000
Total 163,000
Less: Goldie, Withdrawal 10,000
Goldie, Capital, end 153,000
ANSWER SHEET FOR PROBLEM 4.3

GOLDMINE SHOP
Statement of Financial Position
31 December 2015

ASSETS LIABILITIES AND OWNRE’S EQUITY

CURRENT ASSETS LIABILITIES
Cash 80,000 Accounts Payable 32,000
Accounts Receivable 20,000 Loan Payable 100,000
Supplies 5,000 105,000 TOTAL LIABILITIES 132,000
NON-CURRENT ASSETS
Shop Equipments 150,000 OWNER’S EQUITY 153,000
Less: Accumulated Depreciation – Shop 15,000 135,000 TOTAL LIABILITIES & OWNER’S EQUITY 285,000
Equipments
Furniture and Fixtures 50,000
Less: Accumulated Depreciation – 5,000 45,000 180,000
Furniture and Fixtures
TOTAL ASSETS 285,000

PROBLEM 5. For each of the following transactions,

(1) Identify whether business transaction or not by writing BT for business transaction or NBT for non-business transaction;
(2) Identify the specific accounts affected. Write the specific account on the space provided for;
(3) Classify the accounts affected whether Asset, Liability, Owner’s Equity, Revenue or Expense by writing A, L, OE, R or E opposite every account;
(4) Identify the effect of the transaction to the specific account affected by writing INC for increase or DEC for decrease: and
(5) Indicated the amount by which the accounts would be affected.
 Chart of Accounts includes the following accounts:

ASSETS: Cash, Accounts Receivable, Repair Supplies

LIABILITIES: Accounts Payable

OWNER’S EQUITY: T. Cruz, Capital, T. Cruz, Drawings

REVENUES: Service Income

EXPENSES: Gas and Oil Expense, Wages Expense, Rent Expense

WHAT HAPEENED? (1) (2) (3) (4) (5)

T. Cruz invested P100,000 in a motor repair shop.

T. Cruz hired a shop assistant. Monthly salary is agreed to

be P2,500

Purchased repair supplies for cash, P12,500.

Purchased repair supplies from L. Guillen on credit,

P23,000
Promoted shop assistant for being efficient and effective
thereby resulting to a new salary of P3,000

Completed repair work to V. Serna on credit, P13,000.

Completed repair work for a client and collected P15,000

Paid the amount owed to L. Guillen

Received P3,000 from V. Serna as partial payment of the

account due from him.

Paid for gas and oil placed in the service car, P550

Hired Maria as yaya of his child for monthly wage of

P4,000

Purchased additional repair supplies , P670 cash

Completed repair work for A. Martinez on credit, P9,800

Paid the salary of the shop assistant, P2,500

Paid P3,000 for the shop space

Paid the tuition of his son in ISISF, P1,500, using the funds
of the business.

Collected the account due from A. Martinez

Received in full the account due from V. Serna