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accounting is so hard, Summaries of Accounting

for first year second semester may it helps you

Typology: Summaries

2023/2024

Uploaded on 04/01/2024

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ADJUSTING ENTRIES
ACCRUALS – ACCRUED EXPENSE AND ACCRUED INCOME
1. Secretaries’ salaries for the five-day week is P 4,000 payable every Friday. December 31 is
Wednesday.#
Dec 31 Salaries Expense 2,400
Salaries Payable 2,400
Computation: 4,000 x 3/5 = 2,400
2. Telephone bill received December 27 in the amount of P 1,899 will be paid January 10 of the following
year.
Dec 31 Utilities Expense 1,899
Utilities Payable 1,899
3. Power Books sold books for C&E Publishing House amounting to P350,000. Per agreement, Power
Book is entitled to a 12% commission on all book sales. As of December 31, Power Books did not yet
receive its commission from C&E.
Dec 31 Commissions Receivable 42,000
Commissions Income 42,000
Computation: 350,000 x 0.12 = 42,000
4. On October 31, Niko Ong received P120,000 10% one-year note from Gel Enterprises. Record the
accrual on the books of Gel Enterprises.
Dec 31 Interest Receivable 2,000
Interest Income 2,000
Computation: 120,000 x 0.10 x 2/12 = 2,000
PREPAYMENTS/ PREPAID EXPENSES
1. On January 31 paid 1 ½ year advance rent P 45,000.
Asset Method
Dec 31 Rent Expense 27,500
Prepaid Rent 27,500
Computation: 45,000 x 11/18 = 27,500
Feb-Dec = 11 months
1 ½ year = 18 months
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ADJUSTING ENTRIES

ACCRUALS – ACCRUED EXPENSE AND ACCRUED INCOME

  1. Secretaries’ salaries for the five-day week is P 4,000 payable every Friday. December 31 is Wednesday. Dec 31 Salaries Expense 2, Salaries Payable 2, Computation: 4,000 x 3/5 = 2,
  2. Telephone bill received December 27 in the amount of P 1,899 will be paid January 10 of the following year. Dec 31 Utilities Expense 1, Utilities Payable 1,
  3. Power Books sold books for C&E Publishing House amounting to P350,000. Per agreement, Power Book is entitled to a 12% commission on all book sales. As of December 31, Power Books did not yet receive its commission from C&E. Dec 31 Commissions Receivable 42, Commissions Income 42, Computation: 350,000 x 0.12 = 42,
  4. On October 31, Niko Ong received P120,000 10% one-year note from Gel Enterprises. Record the accrual on the books of Gel Enterprises. Dec 31 Interest Receivable 2, Interest Income 2, Computation: 120,000 x 0.10 x 2/12 = 2, PREPAYMENTS/ PREPAID EXPENSES
  5. On January 31 paid 1 ½ year advance rent P 45,000. Asset Method Dec 31 Rent Expense 27, Prepaid Rent 27, Computation: 45,000 x 11/18 = 27, Feb-Dec = 11 months 1 ½ year = 18 months

Expense Method Dec 31 Prepaid Rent 17, Rent Expense 17, Computation: 45,000 x 7/18 = 17,

  1. On June 1, Mark Enterprise bought office supplies P18,000. One-third remained unused at year-end. Expense Method Dec 31 Supplies 6, Supplies Expense 6, Computation: 18,000 x 1/3 = 6, Asset Method Dec 31 Supplies Expense 12, Supplies 12, Computation: 18,000 – 6,000 = 12, or 18,000 2/3 = 12,
  2. On January 31, Alyssa’s Office bought office supplies P16,000. One-fourth remained unused at year- end. Expense Method Dec 31 Supplies 4, Supplies Expense 4, Computation: 16,000 x ¼ = 4, Asset Method Dec 31 Supplies Expense 12, Supplies 12, Computation: 16,000 x ¾ = 12, or 16,000 – 4,000 = 12,

DEPRECIATION AND DOUBTFUL ACCOUNTS

Given the following cases, prepare the adjusting journal entries on December 31, 2022

  1. Accounts Receivable and its corresponding allowances show P220,000 and P6,900 balances respectively. Estimates show that 8% of accounts receivable will be uncollectible. Dec 31 Doubtful Accounts Expense 17, Allowance for Doubtful Accounts 17, Computation: 220,000 x 0.08 = 17,
  2. Accounts Receivable has a balance of P300,000. It is estimated that 6% of this will be uncollectible. Dec 31 Doubtful Accounts Expense 18, Allowance for Doubtful Accounts 18, Computation: 300,000 x 0.06 = 18, Prepare the adjusting journal entries on December 31, 2014
  3. On May 31, 2009, Bruno Company bought a building with a cost of 3,000,000, a scrap value of 300, and it is expected to have estimated life of 30 years. Dec. 31/14 Depreciation Expense 502, Accumulated Depreciation 502, Computation: Annual Depreciation = Original Cost – Scrap Value Useful life = 3,000,000 – 300, 30 = 90, June 1 – Dec 31, 2009 = 90,000 x 7/12 = 52, 2010 – 2014 = 90,000 x 5 = 450, Total = 502,
  4. Subsequently, Bruno Company bought furniture on July 1, 2012 amounting to 91,000 with a scrap value of 7,000 and expected useful life of 8 years. Dec. 31 Depreciation Expense 26, Allowance for Depreciation Accounts 26, Computation: Annual Depreciation = 91,000 – 7, 8 = 10, Jul – Dec 2012 = 10,500 x 6/12 = 5, 2013 – 2014 = 10,500 x 2 = 21, Total = 26,