Problem 1

dr cr
a Insurance expense 8,000.00
Prepaid insurance 8,000.00

b Interest expense 1,750.00

Accrued interest expense 1,750.00

c Depreciation expense 50,000.00

Accumulated depreciation - Delivery van 50,000.00

d Service revenue 4,500.00 If April 1, 2020

Deferred service revenue 4,500.00

e Supplies expense 5,650.00

Supplies 5,650.00

f Accrued interest revenue 2,400.00

Interest revenue 2,400.00

g Prepaid rent expense 52,000.00

Rent expense 52,000.00
Service revenue 18,000.00
Deferred service revenue 18,000.00
Problem 2
dr cr
a Insurance expense 9,500.00
Prepaid insurance 9,500.00

b Salaries expense 30,000.00

Accrued salaries expense 30,000.00
Supplies
c Supplies expense 9,080.00 bb 4,480.00
Supplies 9,080.00 purch 11,000.00
15,480.00
d Depreciation expense 101,600.00
Accumulated depreciation - Equipment 101,600.00
Supplies
9,080.00 exp
6,400.00 be
15,480.00
Problem 3
June 30, 2019 dr cr
a Interest expense 120,000.00
Accrued interest expense 120,000.00

b Salaries expense 115,200.00

Accrued salaries expense 115,200.00

c No AJE

d Supplies expense 41,950.00

Supplies 41,950.00

e Insurance expense 31,670.00 15,300.00

Prepaid insurance expense 31,670.00 1 yr

f Depreciation expense 291,000.00

Accumulated depreciation - Building 73,000.00
Accumulated depreciation - Equipment 218,000.00

g No AJE

h Accrued service revenue 35,000.00

Service revenue 35,000.00
 14,500.00 1,870.00
6 mo 2 mo
Problem 4
Prepare the AJE as of December 31, 2019. The entity records deferrals and prepayments in balance sheet accounts.

a A weekly payroll is P84,000, paid every Friday for a five-day workweek. Assume that December 31, 2019
falls on a Wednesday so the employees will not be paid until Friday, Jan 2, 2020

b Eighteen months earlier, on July 1, 2018, the entity purchased a service equipment that cost P100,000
and had no salvage value. Its useful life is estimated to be five years.

c On Oct 1, 2019, the entity agreed to work on a new housing development project. The contract is for
the installation of home alarm systems for 24 new homes. The entity paid P1,440,000 in advance
on October 1, 2019. By the end of the current year, works of 18 homes have been completed.

d On September 1, 2019, the entity purchased a one-year insurance policy for P12,000.

e On December 29, 2019, upon comparison of service reports and billings, services rendered which
remains unbilled totaled P50,000
 balance sheet accounts.

December 31, 2019

at cost P100,000

e contract is for
in advance

dered which