Capada, Johanna Raissa C

BSMA 2-1

1-1
(a) Receipt of goods ordered from a supplier
Supplies xx
Accounts Payable xx
(c) Decleration of cash dividends in cumulative preference shares
Retained Earnings xx
Cash Dividend Payable xx
(e) Decleration of property dividends in ordinary shares
Retained Earnings xx
Property Dividend Payable xx
(g) Receipt of cash from a customer for goods to be delivered next month
Cash xx
Costumer's Advances xx
(h) Withholding of taxes in employess' compensation
Factory Payroll xx
Withholding Tax Payable xx
(i) Violation of the terms of a contract; it is more likely than not that there
will be outflow of resources, amount of such outflow cannot be reasonably estim
(m) Sale of goods with product warranty
Warranty Expense xx
Estimated Warranty Liability xx
(n) Receipt of land and building from the city government
(o) Sale of non-refundable tickets for a concert sho that will be staged from three m
Sale xx
Unearned Revenue xx
(p) Sale of gift certificates redeemable in merchandise
Sale xx
Unearned Revenue xx

1-2
Case 1 None or Zero
Case 2 Litigation Expense 800,000
Provision for Litigation 800,000
Case 3 Loss from Damages 400,000
Provisions for Damages 400,000
Case 4 Loss from Damages 350,000
Provision for Damages 350,000
Case 5 Warranty Expense 100,000
 Provision for Warranty 100,000
Case 6 None or Zero
 Multiple Choice
1
2
3
4
5
6
7
8
9
ext month 10
11
12
13
14
15
ot that there
be reasonably estimated

16
staged from three months from now
17

18

19

20
21

22

23

24
25

26
 B
A
D
C
B
D
B
D
B
A
A
B
D
D
B
Estimate of additional taxes - highest 6,500,000.00
Estimate of additional taxes - lowest 5,000,000.00
Total 11,500,000.00
Divided by 2
Accrued liability 5,750,000.00
C
The company accepted the BIR offer before 2020
A
Accrued salaries payable, December 31, 2019 130,000.00
Salaries expense 1,630,000.00
Salaries paid - 1,560,000.00
Accrued salaries payable, December 31, 2020 200,000.00
B
Electricity (8500/2) 4,250.00
Telephone bill for December 2020 2,500.00
Accrued liabilities 6,750.00
D
Unearned service contract revenue, January 1, 2020 1,080,000.00
Cash receipts from service contracts sold 1,920,000.00
Service contract revenue recognized - 1,560,000.00
Unearned service contract revenue, December 31, 2020 1,440,000.00
C
2018 Contracts:
Service contracts sold (1,400 @ ₱ 1,500) 2,100,000.00
Multiply by {(1/2 x 35%) + 50%} 0.6750

2019 Contracts:
Service contracts sold (1,820 @ ₱ 1,500) 2,730,000.00
Multiply by {(1/2 x 15%) + 35% + 50%} 0.9250
Unearned service contract revenue, December 31, 2019
D
2018 Contracts:
Service contracts sold (1,400 @ ₱ 1,500) 2,100,000.00
Multiply by (1/2 x 35% + 50%) 0.4250
2019 Contracts:
Service contracts sold (1,820 @ ₱ 1,500) 2,730,000.00
Multiply by (1/2 x 15% + 35%) 0.25
2020 Contracts:
Service contracts sold (1,650 @ ₱ 1,500) 2,475,000.00
Multiply by (1/2 x 15%) 0.0750
Service contract revenue, December 31, 2020
B
Service contracts sold (1,650 @ ₱ 1,500) 2,475,000.00
Multiply by (1/2 x 15% + 35%) 0.25
Service contract revenue, December 31, 2021 618,750.00
A
2018 Contracts:
Service contracts sold (1,400 @ ₱ 1,500) 2,100,000.00
Multiply by (1/2 x 50%) 0.25
2019 Contracts:
Service contracts sold (1,820 @ ₱ 1,500) 2,730,000.00
Multiply by {(1/2 x 35%) + 50%} 0.6750
Multiply by {(1/2 x 35%) + 50%} 0.6750
2020 Contracts:
Service contracts sold (1,650 @ ₱ 1,500) 2,475,000.00
Multiply by {(1/2 x 15%) + 35% +50%} 0.9250
Unearned service contract revenue, December 31, 2020
D
Warranty contracts (500 @ ₱ 2,250) 1,125,000.00
Revenue from warranty contracts (1,125,000 x 1/2 x 30%) - 168,750.00
Unearned revenue from warranty contracts, December 31, 2020 956,250.00
Revenue from warranty contracts (1,125,000 x 1/2 x 30%) 168,750.00
Servicing cost - 95,000.00
Profit from warranty contracts for year 2020 73,750.00
 220,859
Selling price of the main product 12,000,000.00
Selling price of the premium {(20,000 x 75%) / 20 x 300} 225,000.00
Total selling price 12,225,000.00
Sales of the product 12,000,000.00
Multiply by (.225 / 12.225) 0.0184
Total transaction price allocated to the premium 220,859.00
147,239
Total transaction price allocated to the premium 220,859.00
Multiply by (500/750) 0.67
Allocated transaction price for redeemed toys 147,239.00
27 D
Gift certificate outstanding
Multiply by
Deferred gift certificate revenue
28 B
Accrued recurring biweekly salaries (1,125,000 x 3/10)
Overtime pay earned
Accrued salaries, July 31, 2020
29 B
Estimated coupons to be redeemed (500,000 x 80%)
Coupons processed
Outstanding premium coupons
Multiply by net cost per premium (50 - 40 + 5)
Liability for unredeemed coupons
30 A
Estimated prizes to be redeemed (3,000,000 / 10) x 60%
Prizes distributed to customers
Potential prizes outstanding
Multiply by cost per premium (40,000 / 80,000)
Provision
31 A
Estimated premium to be distributed (400,000 / 5) x 70%
Premium already redeemed (100,000 / 5)
Estimated outstanding premium
Multiply by cost per premium
Estimated liability for premium claims outstanding, December 31, 2020
32 B
Estimated coupons to redeemed (720,000 x 50%)
Amount disbursed
Liability for unredeemed coupons
33 D
Washing machines sold
Multiply by estimated warranty costs
Warranty expense for the year
34 C
Total warranty expense for the year
Warranty cost
 Warranty liability, December 31, 2020
35 D
1,417,500.00 Net Sales
Multiply by
Warranty expense
Journal Entry:
2,525,250.00 Warranty Expense
3,942,750.00 Warranty Liability
36 C
B = .45 (2,000,000 - B - T)
T = .30 (2,000,000 - B)
892,500.00 B = .45 {(2,000,000 - B - .30 (2,000,000 - B)}
B = .45 (2,000,000 - B - 600,000 + .30B)
B = 900,000 - .45B - 270,000 + .135B
682,500.00 B = 630,000 - .315B
B = 630,000 / 1.315B
B = 479,087.00
185,625.00 37 C
1,760,625.00 Total B = 15% + (10% x 2) = 35%
B = .35 (2,000,000 - B)
B = 700000 - .35B
B = 700,000 / 1.35B
B = 518,519.00
B (Sales Manager) = (518,519 x 15 / 35) = 222,222.00
B (Sales Agent) = (518,519 x 10 / 35) = 148,148.00
38 B
525,000.00 B = .10 (2,500,000 - T)
T = .30 (2,500,000 - B)
B = .10 {2,500,000 - .30 (2,500,000 - B)}
1,842,750.00 B = .10 (2,500,000 - 750,000 + .30B)
1,842,750.00 B = 250,000 - 75,000 + .03B
B = 175,000 / .97B
B = 180,412.00
2,289,375.00 39 C
4,657,125.00 Magazine subscription collected in advance:
2021
2022
2023
Total
40 A
Solution:
41 D
Cash payment
Carrying value of patent
Total consideration
Amount accrued for year ended December 31, 2019
Decrease in profit
Gift certificate outstanding 1,000.00
Multiply by 750.00
Deferred gift certificate revenue 750,000.00

Accrued recurring biweekly salaries (1,125,000 x 3/10) 337,500.00

Overtime pay earned 63,000.00
Accrued salaries, July 31, 2020 400,500.00

Estimated coupons to be redeemed (500,000 x 80%) 400,000.00

Coupons processed - 300,000.00
Outstanding premium coupons 100,000.00
Multiply by net cost per premium (50 - 40 + 5) 15.00
Liability for unredeemed coupons 1,500,000.00

Estimated prizes to be redeemed (3,000,000 / 10) x 60% 180,000.00

Prizes distributed to customers - 42,000.00
Potential prizes outstanding 138,000.00
Multiply by cost per premium (40,000 / 80,000) 0.50
69,000.00

Estimated premium to be distributed (400,000 / 5) x 70% 56,000.00

Premium already redeemed (100,000 / 5) - 20,000.00
Estimated outstanding premium 36,000.00
Multiply by cost per premium 20.00
Estimated liability for premium claims outstanding, December 31, 2020 720,000.00

Estimated coupons to redeemed (720,000 x 50%) 360,000.00

Amount disbursed - 300,000.00
Liability for unredeemed coupons 60,000.00

Washing machines sold 24,000.00

Multiply by estimated warranty costs 300.00
Warranty expense for the year 7,200,000.00

Total warranty expense for the year 7,200,000.00

Warranty cost - 1,700,000.00
Warranty liability, December 31, 2020 5,500,000.00

1,500,000.00
Multiply by 4%
Warranty expense 60,000.00
Journal Entry:
Warranty Expense 60,000.00
Warranty Liability

B = .45 (2,000,000 - B - T)
T = .30 (2,000,000 - B)
B = .45 {(2,000,000 - B - .30 (2,000,000 - B)}
B = .45 (2,000,000 - B - 600,000 + .30B)
B = 900,000 - .45B - 270,000 + .135B
B = 630,000 - .315B
B = 630,000 / 1.315B
B = 479,087.00

Total B = 15% + (10% x 2) = 35%

B = .35 (2,000,000 - B)
B = 700000 - .35B
B = 700,000 / 1.35B
B = 518,519.00
B (Sales Manager) = (518,519 x 15 / 35) = 222,222.00
B (Sales Agent) = (518,519 x 10 / 35) = 148,148.00

B = .10 (2,500,000 - T)
T = .30 (2,500,000 - B)
B = .10 {2,500,000 - .30 (2,500,000 - B)}
B = .10 (2,500,000 - 750,000 + .30B)
B = 250,000 - 75,000 + .03B
B = 175,000 / .97B
B = 180,412.00

Magazine subscription collected in advance:

600,000.00
900,000.00
400,000.00
1,900,000.00

Magazine subscription collected

 Unearned magazine subscription revenue
Magazine subscription revenue

Cash payment 3,800,000.00

Carrying value of patent 2,000,000.00
Total consideration 5,800,000.00
Amount accrued for year ended December 31, 2019 - 5,000,000.00
Decrease in profit 800,000.00
 60,000.00

2,400,000.00
- 1,900,000.00
500,000.00
dhdh