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Adjusting Entries Transactions

The document provides information on adjustments needed for various companies at different periods. It includes details on unbilled fees, unpaid expenses, prepaid accounts, depreciation, and other accruals and deferrals that require adjusting entries to properly state accounts at the end of each period.

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Michael John Dayondon
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337 views

Adjusting Entries Transactions

The document provides information on adjustments needed for various companies at different periods. It includes details on unbilled fees, unpaid expenses, prepaid accounts, depreciation, and other accruals and deferrals that require adjusting entries to properly state accounts at the end of each period.

Uploaded by

Michael John Dayondon
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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1. The Ansly Company accumulates the following adjustments data at December 31.

a. Fees earned but unbilled total P6,000.


b. Store supplies of P3,000 have been used.
c. Utility expenses of P2,250 are unpaid.
d. Fees of P2,600 collected in advance have been earned.
e. Salaries of P8,000 are unpaid.
f. Prepaid Insurance totaling P3,500 has expired.

2. The ledger of Trouble-free Rental Agency on March 31 of the current year includes the following
selected accounts before adjusting entries have been prepared.

Prepaid Insurance P36,000


Supplies 28,000
Equipment 250,000
Accumulated Depreciation-Equipment P84,000
Notes Payable 200,000
Unearned Rent Revenue 93,000
Rent Revenue 600,000
Wage Expense 140,000

An analysis of the accounts shows the following:

a. The equipment depreciates P5,000 per month.


b. One-third of the unearned rent was earned during the quarter.
c. Interest of P6,000 is accrued on the notes payable.
d. Supplies on hand total P8,500.
e. Insurance expires at the rate of P2,000 per month.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional
accounts are: Depreciation Expense, Insurance Expense, Interest Payable, Interest Expense, and Supplies
Expense.

3. Katrina Guazo, D.D.S., opened a dental practice on January 1, 2008.. during the first month of
operations the following transactions occurred.
a. Performed services for patients who had dental plan insurance companies. At January 31, P7,500
of such services was earned but not yet billed to the insurance companies.
b. Utility expenses incurred but not ppaid prior to January 31 totaled P6,500.
c. Purchased dental equipment on January 1 for P800,000, paying P200,000 in cash and signing a
P600,000, three-year note payable. The equipment depreciates P4,000 per month. Interest is
P6,000 per month.
d. Purchased a one-year malpractice insurance policy on January 1 for P120,000.
e. Purchased P18,000 of dental supplies. On January 31, determined that P5,000 of supplies were on
hand.

Prepare the adjusting entries on January 31. Account titles are: Accumulated Depreciation – Dental
Equipment, Depreciation Expense, Fees Earned; Accounts Receivable; Insurance Expense; Interest
Expense; Interest Payable; Prepaid Insurance;; Supplies;; Supplies Expense; Utilities Expense;; and
Utilities Payable.
4. The Magdalo Security Service began operations on January 1, 2008. At the end of the first year
operations, the trial balance before adjustment shows the following:

MAGDALO SECURITY SERVICE


Trial Balance
December 31, 2008
Account Titles Debit Credit
Cash P124,000
Accounts Receivable 32,000
Prepaid Insurance 36,000
Automobiles 580,000
Notes Payable P450,000
Unearned Fees 25,000
Trillanes, Capital 180,000
Fees Earned 840,000
Salaries Expense 570,000
Repairs Expense 60,000
Gas and Oil Expense 93,000
Balance P1,495,000 P1,495,000

Other data:
a. Fees earned but unbilled P15,000 at December 31.
b. Insurance coverage began on January 1 under a 2-year policy.
c. Automobile depreciation is P150,000 for the year.
d. Interest of P54,000 accrued on notes payable for the year.
e. P10,000 of the unearned fees has been rendered.
f. Driver’s salaries total P5,000 per day. At December 31, 4 days salaries are unpaid.
g. Repairs to automobiles of P6,500 have been incurred, but billes have not been received prior to
December 31. (Use Accounts Payable)

Journalize the annual adjusting entries at December 31, 2008.

5. The Rosal White Sand Resort opened for business on June 1 with eight air-conditioned units. Its trial
balance before adjustment on August 31 is as follows:

ROSAL WHITE SAND RESORT


Trial Balance
August 31, 2008
Account Titles Debit Credit
Cash P196,000
Prepaid Insurance 54,000
Supplies 33,000
Land 250,000
Cottages 1,250,000
Furniture 260,000
Accounts Payable P65,000
Unearned Rent Revenue 68,000
Mortgage Payable 800,000
N. Adarna, Capital 1,000,000
N. Adarna, Drawing 50,000
Rent Revenue 800,000
Salaries Expense 510,000
Utilities Expense 94,000
Repair Expense 36,000
Balance P2,733,000 P2,733,000

Other Data:
a. Insurance expires at the rate of P3,000 per month.
b. An inventory count on August 31 shows P7,000 of supplies on hand.
c. Annual depreciation is P48,000 on cottages and P24,000 on furniture.
d. Unearned rent of P50,000 was earned prior to August 31.
e. Salaries of P4,000 were unpaid at August 31.
f. Rentals of P8,000 were due from tenants at August 31. (Use Accounts Receivable)
g. The mortgage interest rate is 12% per year. (The mortgage was taken out on August 1)

Journalize the adjusting entries on August 31 for the 3-month period June 1 to August 31.

6. On November 1, 2008, the account balances of Batumbakal Equipment Repair were as follows:
Debits Credits
Cash P27,900 Accumulated Depreciation P5,000
Accounts Receivable 25,100 Accounts Payable 21,000
Supplies 10,000 Unearned Service Revenue 4,000
Store Equipment 100,000 Salaries Payable 5,000
Batumbakal, Capital 128,000
Total Debits P163,000 Total Credits P163,000

During November the following summary transactions were completed:


Nov. 8 Paid P11,000 for salaries due employees, of which P6,000 is for November.
10 Received P12,000 cash from customers on account.
12 Received P14,000 cash for services performed in November.
15 Purchased store equipment on account P30,000.
17 Purchased supplies on account, P15,000.
20 Paid creditors on account P25,000.
22 Paid November rent P3,000.
25 Paid salaries P10,000.
27 Performed services on account and billed customers for P7,000.
29 Received P5,500 from customers for future service.

Adjustment data consist of:


a. Supplies on hand P16,000.
b. Accrued salaries payable P5,000.
c. Depreciation for the month is P1,200.
d. Unearned service revenue of P3,000 is earned.

Journalize the November transactions. Post the journal entries. Prepare trial balance at November 30.
Journalize and post the adjusting entries. Prepare adjusted trial balance. Prepare income statement,
owners equity statement, and balance sheet at November 30.

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