Professional Documents
Culture Documents
Solution To Chapter 23
Solution To Chapter 23
Solution To Chapter 23
Problem
Assume the following transaction for a National Government Agency: (000,000s omitted)
Transactions
1. Receipt of Allotment
for:
Personal Services (PS)..
Maintenance and
Other Operating
Expenses (MOOE).
Capital outlay (CO)..
Financial Expenses (FE)
2. Receipt of Notice of
Cash
Allocation
(NCA) from DBM-
P 2,460
2,400
10,260
440
P15,600
P15,600
Dr.
Cr.
15,600
Personal Services
3. Obligation for
Personal Services,
P3,000
4. Established a payroll
fund which is
composed of :
Regular pay
Personal Relief
Allowance (PERA)..
Payroll Fund...
Cash National Treasury
Modified Disbursement System
2,460
2,880
720
Less: Deductions:
Withholding tax.......
GSIS Life and
Retirement Premium
PhilHealth premiums.
Pag-ibig premiums
Net.
Accordingly, an
amount of P2,460 was
advanced by the
agencys disbursing
officer.
5. To record liquidation of
cash
advances
or
payment of salaries.
6. Remittance of salary
P2,880
2,460
720
P3,600
840
360
180
120
P2,460
840
840
360
180
120
2,460
P12,600
P
P
360
180
120
660
9. Remittance of
government share for
applicable salary
deduction.
360
180
120
360
180
120
360
180
120
1,500
360
180
120
660
P180
P180
P360
60
P420
P360
60
P420
180
Electricity expense..
Telephone expenses landline..
Accounts payable.
360
60
Accounts payable..
Cash NT - MDS..
420
180
420
420
P22
24
22
P2-18
2.4
24
22
20.
21.
22.
23.
24.
25.
26. Establishment of
Petty Cash Fund
(PCF) for MOOE..
27. Purchase of sign
pens,
ball
pens,
white board pens,
pencils thru PCF..
28. To record obligation
for
request
of
replenishment of the
PCF for P36.
29. To record
replenishment of
PCF, before the end
of the year.
2.4
2.4
2.4
P 24
P168
240
Due to BIR..
Subsidy Income from National
Government..
24
168
24
216
168
24
P42
P36
42
42
No entry
36
36
Capital Outlay
30. Issuance of purchase
order (obligation) for
office equipment
31. Receipt of office
equipment based on
invoice/delivery
receipt.
32. Payment of office
Office Equipment....
Accounts payable.
120
Accounts payable..
120
120
P12
P840
P126
P420
126
P294
P30
P420
P42
Due to BIR.
Cash-NT-MDS...
Memorandum entry RAOCO
12
108
Advances to Contractors.
Cash NT - MDS
126
420
Accounts payable..
Due to BIR....
Cash NT - MDS.
Construction In Progress Buildings
Accounts payable.
Accounts payable..
Due to BIR.....
Cash NT - MDS........
294
Buildings..
Construction In progress Buildings
840
420
420
126
126
294
30
264
420
42
378
840
12
12
12
If the performance bond is in the form of surety bond, the following entry is required:
To record the receipt
of
performance
bond from (cash or
certified
check)
contractor
42. To record
remittance/deposit of
performance bond
cash to Bureau of
Treasury (BTr) thru
AGDB (Authorized
Guarantee Deposits.....
Performance Bonds Payable............
12
12
12
Due from National Government Agency (BTr).
Cash Collecting Officer.
12
12
Government
Depository Bank)
43. Payment of 15% of
contract for
mobilization fee
(advances to
contractors)
amounting to (P2,400
x 15%)..
44. Receipt of progress
billing for
construction of roads,
50% of P2,400.
Less: Recoupment
Net amount
45. Payment of bill for
the construction of
roads:
Accts. Payable..
Less: Withholding
tax.......
10% Retention
(1,200x10%)...
Net Amount
46. Presentation of final
billing for roads
50% of P2,400.
Less: Liquidated
Damages..
Net Amount ..
47. Final payment for the
construction of
roads:
Accts. Payable..
Less: Withholding
tax(P1,140X10%)
Net Amount
48.Adjustment of
RAOCO to reduce
original amount of
obligation
49.
To close the
Construction In
Progress Account to
Public Infrastructures
upon turn-over and
acceptance of the
road project:
Contract amount...
Less: Liquidated
damages
Net Cost
50.
To record refund
of retention fee for
the construction of
P360
P1,200
360
P 840
P 840
Advances to Contractors..
Cash-NT-MDS..
360
1,200
Accounts payable..
Due to BIR...
Guarantee deposits payable..
Cash-NT-MDS.
840
1,140
Accounts payable..
Due to BIR...
Cash-NT-MDS.
1,140
360
360
840
84
120
636
84
120
P 636
P1,200
60
P 1,140
P 1,140
1,140
114
1,026
114
P 1,026
Public Infrastructures
Construction In Progress Roads, etc
2,340
2,340
P2,400
60
P2,340
P 120
120
120
roads.
To record receipt
of NCA for release of
performance bond..
52.
To record refund
of performance bond.
51.
Cash NT MDS...
Due from National Government (BTr)..
12
12
12
12
12
Performance
Payable
Guaranty
Deposits...
12
12
If the performance bond is in the form of surety bond, the following entry is required (instead of
No. 51 and 52)
To
record
release
performance
bond
the
of
To
record
obligation
for
purchase of land and
building upon signing
of contract..
54.
The
assessed
value of the land
amounted to
55.
To record the
payment of land and
building, with tax of.
56.
To
record
remittance
of
withholding
tax
without TRA:
No. 32.
No. 36.
No. 38.
Total
53.
To
record
remittance
of
withholding tax thru
TRA:
No. 45.
No. 47.
No. 55.
Total
58.
To
record
for
obligation
for
the
general repair of the
building acquired.
59.
To
record
the
receipt
of
construction materials
with
the
charge
invoice.
60.
To
record
payment of materials,
with
a
tax
of...
Bonds
12
12
P
P
180
Land.
Building
Accounts payable.
Accounts payable..
Due to BIR....
Cash NT - MDS.
Due to BIR...
Cash NT - MDS.
1,200
600
Due to BIR..
Subsidy Income from National
Government..
378
1,800
84
1,800
180
1,620
84
12
30
42
84
57.
84
114
180
P 378
378
480
Accounts payable..
Due to BIR.
Cash NT MDS.......
480
480
P 480
48
48
432
61.
To
record
issuance of materials
for the construction
62.
To
record
obligation of payroll in
relation to the general
repair
To record cash
advance granted to
disbursing officer (net
of P30 withholding
tax).
64.
To
record
liquidation of cash
advance
by
Disbursing Officer
65.
To
record
the
transfer
of
CIP
account to Buildings
account
upon
completion of the
general repair.
66.
To
record
remittance
of
withholding tax for
materials and labor,
assuming that the
Notice
of
Cash
Allocation
received
was already reduced
by TRA:
No. 60.
No. 64.
Total
P 480
480
480
P 360
63.
Adjusting Entries
66. Depreciation of the
following
Equipment.
Buildings.
Total.
67. Rent expense for the
year, P150/2 years.
Closing Entries
68. Reversion of the
Unused Subsidy
Income from
National
Government
representing NCA
324
360
Building..
Construction In Progress Building..
840
Due to BIR...
Subsidy Income from National
Government..
84
6
18
Rent Expense.
Prepaid rent...
90
324
P 324
36
324
840
84
48
36
84
6
18
P 24
P 90
4,386
8,698
7,360
6
18
90
4,386
8,698
71.
b
d
b
c
c
6.
7.
8.
9.
10,
d
a
d
d
b
11.
12.
13.
14.
15,
a
b
c
b
c
16.
17.
18.
19.
20.
d
a
d
a
c
21.
22.
23.
24.
25.
d
c
b
c
b
26.
27.
28.
29.
30.
a
a
b
b
d
31
32.
33.
34.
35.
b
b
c
b
d
36.
37.
38.
39.
40.
2,880
720
360
180
120
360
60
22
204
2,340
6
18
90
2,036
2,036
2,036
d
b
a
b
b
2,036
41.
42.
43.
44.
45.
b
a
c
b
d
49. b
Income
Less: Expenses
Personal services
MOOE
Financial expenses
Depreciation
Excess of income over expenses
I ncome:
Subsidy income from National Government
Less: Reversion of unused cash allocation
Sales
P20,000,000
7,000,000
3,000,000
5,000,000
___800,000
P 4,200,000
P 4,000,000
___500,000
P15,000,000
P 3,500,000
__4,000,000
100,000
800,000
10,000,000
200,000
300,000
100,000
400,000
500,000
2,000,000
800,000
___400,000
11,000,000
1,000,000
500,000
2,000,000
8,000,000
P26,000,000
_15,600,000
P 10,400,000
P10,000,000
P16,000,000
__2,000,000
18,000,000
( 3,000,000)
P 25,000,000