Basic Financial Accounting and Reporting

Final Exam – Part I

December 21, 2020

NAME: SCORE:

Instructions:
1. Answer the exam HONESTLY.
2. Submit your answers before 12 noon today.
3. Any submission beyond the deadline will have a corresponding deduction in the final score.
4. Your answers should be handwritten, using a dark ballpen.

Test I –

Sophie Company is a small editorial services company owned and operated by Pedro Borman. On August 31,
2020, the end of the current year, Sophie Company’s accounting clerk prepared the unadjusted trial balance shown
below:

The data needed to determine year-end adjustments are as follows:

a) Unexpired Insurance at August 31, P1,800.
b) Supplies on Hand at August 31, $750.
c) Depreciation of building for the year, $2,000.
d) Depreciation of equipment for the year, $5,000.
e) Rent unearned at August 31, $2,850.
f) Accrued salaries and wages at August 31, $2,800.
g) Fees earned but unbilled on August 31, $12,380.

Sophie Company
Unadjusted Trial Balance
August 31, 2020
Debit Balances Credit Balances
Cash 7,500.00
Accounts Receivable 38,400.00
Prepaid Insurance 7,200.00
Supplies 1,980.00
Land 112,500.00
Building 200,250.00
Accumulated Depreciation-Building 137,550.00
Equipment 135,300.00
Accumulated Depreciation-Equipment 97,950.00
Accounts Payable 12,150.00
Unearned Rent 6,750.00
Pedro Borman, Capital 221,000.00
Pedro Borman, Drawing 15,000.00
Fees Earned 324,600.00
Salaries and wages Expense 193,370.00
Utilities Expense 42,375.00
Advertising Expense 22,800.00
Repairs Expense 17,250.00
Miscellaneous Expense 6,075.00
800,000.00 800,000.00

Requirement: Determine the adjusted balances of the following accounts:

Basic Financial Accounting and Reporting
Final Exam – Part I
December 21, 2020

1) Cash =
2) Accounts Receivable =
3) Prepaid Insurance =
4) Supplies =
5) Land =
6) Building =
7) Accumulated Depreciation-Building =
8) Equipment =
9) Accumulated Depreciation-Equipment =
10) Accounts Payable =
11) Salaries Payable =
12) Unearned Rent =
13) Pedro Borman, Capital =
14) Pedro Borman, Drawing =
15) Fees Earned =
16) Rent Income =
17) Salaries and Wages Expense =
18) Utilities Expense =
19) Advertising Expense =
20) Repairs Expense =
21) Insurance Expense =
22) Supplies Expense =
23) Depreciation Expense (total) =
24) Miscellaneous Expense =

Test II

Using the data provided from the general ledger and supplementary records, determine each of the missing
numbers in each of the following independent assumptions.

Situation A Situation B Situation C

Invoice cost of Purchases P188,000 P80,000 P65,000
Purchase discounts 10,000 (3) 1,600
Purchase returns & Allowances 4,000 5,000 2,400
Freight-in (1) 9,000 10,000
Merchandise Inventory, Beg. 18,000 (4) 20,000
Net total cost of merchandise purchased 182,000 81,000 (5)
(including freight in)
Merchandise Inventory, end. 10,800 17,000 (6)
Cost of goods sold (2) 85,200 70,260

TEST III.

The following data were taken from the financial records of Very-Near-Yet-So-Far Trading for the year 2011.
Basic Financial Accounting and Reporting
Final Exam – Part I
December 21, 2020

Bad debts 16,000.00

Depreciation Expense-Bldg 25,000.00
Depreciation Expense-Furnitures&Fixtures 10,000.00
Freight-in 17,000.00
Freight-out 25,000.00
Insurance Expense 30,000.00
Interest Expense 36,000.00
Interest Income 2,000.00
Light, Water & Telephone 23,000.00
Merchandise Inventory, Dec. 31,2011 700,000.00
Merchandise Inventory, January 1, 2011 600,000.00
Miscellaneous Expense 15,000.00
Office Supplies Expense 18,000.00
Purchase Discount 13,000.00
Purchase returns and allowances 50,000.00
Purchases ###
Rent Income 17,000.00
Salary Expense 214,000.00
Sales ###
Sales Discount 18,000.00
Sales Returns And Allowances 100,000.00
Taxes and Licenses 28,000.00

Based on the data presented above, compute the following:

a) Net Sales =
b) Total goods available for sale =
c) Cost of sale =
d) Gross profit =
e) Total Operating Expenses =
f) Net operating income before other income and other expense accounts =
g) Net income =

The following data were taken from the financial records of Very-Far-Yet-So-Near as of December 31, 2011.

Unearned Rent 5,000.00

Taxes Payable 16,000.00
Salaries Payable 14,000.00
Prepaid Insurance 20,000.00
Petty Cash 20,000.00
Office Supplies Unused 12,000.00
Notes Receivable 100,000.00
Notes Payable 100,000.00
Mortgage Payable 500,000.00
Miguel D. Legaspi, capital, end. 2,527,000.00
Merchandise Inventory 700,000.00
Land 400,000.00
Interest Receivable 2,000.00
Interest Payable 1,000.00
Basic Financial Accounting and Reporting
Final Exam – Part I
December 21, 2020

Furnitures and Fixtures 200,000.00

Cash in Bank-Metro Bank 650,000.00
Building 1,000,000.00
Allowance for bad debts 46,000.00
Accumulated Depreciation – Furnitures & Fixtures 70,000.00
Accumulated Depreciation-Building 125,000.00
Accounts Receivable 500,000.00
Accounts Payable 200,000.00

Based on the data presented above, compute the following:

a) Total current assets =

b) Total noncurrent assets =
c) Total current liabilities =
d) Total noncurrent liabilities =
e) Total Liabilities =
f) Total Liabilities and Owner’s Equity =

TEST IV

Give the corresponding adjusting entry for each of the following independent transactions. Depending on the
problem, count the time (period) in terms of month. Two points each.

1. Anna Jay Laundry Services received cash advance from a customer in the amount of P25,000. Liability
method was used upon acceptance of cash. At the end of the accounting period, 80% of the laundry services
have been rendered.
Answer:

2. An office supplies unused was debited by Red Tide Computer Center in the amount of P33,500. AT the end
of the accounting period, physical count was conducted and the remaining balance of office supplies was
P18,250.
Answer:

3. On November 1, 2011, an annual insurance premium amounting to P14,400 was paid in advance by
Tamaraw Security Force. Asset method was used. At the end of the accounting period, December 31, 2011,
give the necessary adjusting entry.
Answer:

4. Mystic Printing Press estimated 15% of the Accounts Receivable of P75,500 is deemed to be uncollectible.
Answer:
Basic Financial Accounting and Reporting
Final Exam – Part I
December 21, 2020

5. Happy Homes Day Care Center pays its 4 helpers at the rate of P300 per day (Monday through Saturday)
payable during Saturday. Give the adjusting entry if the end of the accounting period is Thursday.
Answer:

TEST V - Journalizing Merchandising Transactions

Below is a list of transactions for Paul John Merchandise. The business uses perpetual inventory system.

July 2 Sold merchandise on account costing P8,000 for P10,000; terms were 2/10, n/30.
Answer:

July 5 Customer returned merchandise costing P400 that had been sold on account for P500 (part of the P10,000
sale).
Answer:

July 8 Received payment from customer for merchandise sold on July 2.

Answer:

July 12 Purchased on account merchandise for resale for P6,000; terms were 2/10, n/30.
Answer:

July 14 Paid P200 freight on the P6,000 purchase; terms were FOB Shipping point, freight collect.
Answer:

July 18 Returned merchandise costing P300(part of the P6,000 purchase).

Answer:

July 22 Paid for merchandise purchased last July 12.

Answer:
Basic Financial Accounting and Reporting
Final Exam – Part I
December 21, 2020