Accounting Practice Set

Learning Competencies
The Learners should be able to….
1. Perform the steps in the accounting cycle, from preparation of documents to the preparation, analysis, and
interpretation of financial statements.

Practice Set

The November 30, 2019 Trial Balance of ABC Co., a call center business, shows the following information:

ABC COMPANY
Trial Balance
November 30,2019

ACCOUNTS DEBIT CREDIT

Cash 340,000.00
Accounts Receivable -
Prepaid Insurance -
Computer Equipment 1,400,000.00
Accumulated Depreciation 240,000.00
Loans Payable 1,000,000.00
Owner's Equity 1,254,000.00
Owner's Drawing 3,300,000.00
Service Income 4,890,000.00
Salaries Expense 990,000.00
Rent Expense 1,100,000.00
Utilities Expense 165,000.00
Office Supplies Expense 84,000.00
Insurance Expense 5,000.00

Totals 7,384,000.00 7,384,000.00

The supporting documents for the business transactions during the month of December 2019 are as follows:

In settlement of the following ABC COMPANY

Particulars Amount 1F HAIR JORDAN BLDG., 123 PUKIS ST.,
LAMPONG VILLAGE KULOT CITY PHILIPPINES
TEL NO. (654) 321 0000
VAT REG. TIN: 111-333-555-777

Total Sales (VAT inclusive) No. 2006

Less: VAT OFFICIAL RECEIPT
Total Date December 2, 2019
Total Due
Less: Withholding Tax Received from Bandolin Enterprise
Amount Due
Business style Publishing with TIN 111-111-111-0000
with address at 1FM Bldg., Golf View, Sto. Tomas, Baguio City
Vatable Sales
the sum of pesos Two Hundred Sixty-Two Thousand pesos
VAT-Exempt Sales
Zero Rated Sales
(P262,000.00)
Vat Amount In partial/full payment of Virtual assistant services
Total Sales
Form of Payment
10 BKLTS. (30X3) 2001-2500
Cash Check 06/19/2019: VALID UNTIL 06/19/2019 By:
3MAGSIKAP ST., DULONG BAYAN
Check No. 0332145 TIN: 214-259-506-000 NON-VAT Authorized signature

Bank BPI THIS OFFICIAL RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP

In settlement of the following ABC COMPANY

Particulars Amount 1F HAIR JORDAN BLDG., 123 PUKIS ST.,
LAMPONG VILLAGE KULOT CITY PHILIPPINES
TEL NO. (654) 321 0000
VAT REG. TIN: 111-333-555-777

Total Sales (VAT inclusive) No. 2007

Less: VAT OFFICIAL RECEIPT
Total Date December 12, 2019
Total Due
Less: Withholding Tax
Received from Red George Cars
Business style Car rentals with TIN 211-314-781-000
Amount Due

with address at #3 Jay St., Adayu Ave., Kulot City

Vatable Sales
the sum of pesos Sixty Thousand pesos (P 60,000.00)
VAT-Exempt Sales
Zero Rated Sales In partial/full payment of Monthly retainer’s fee
Vat Amount
Total Sales
Form of Payment
10 BKLTS. (30X3) 2001-2500
Cash Check 06/19/2019: VALID UNTIL 06/19/2019 By:
3MAGSIKAP ST., DULONG BAYAN
Check No. 0998942 TIN: 214-259-506-000 NON-VAT Authorized signature

Bank Metrobank THIS OFFICIAL RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP
 In settlement of the following ABC COMPANY
Particulars Amount 1F HAIR JORDAN BLDG., 123 PUKIS ST.,
LAMPONG VILLAGE KULOT CITY PHILIPPINES
TEL NO. (654) 321 0000
VAT REG. TIN: 111-333-555-777

Total Sales (VAT inclusive) No. 2008

Less: VAT OFFICIAL RECEIPT
Total Date December 23, 2019
Total Due
Less: Withholding Tax Received from Tender Guitars
Amount Due
Business style Guitar Manufacturer with TIN 122-112-131-000
with address at #21 Asideg Laeng St., Killu-killu Ave., Kulot City
Vatable Sales
the sum of pesos Thirty-Seven Thousand pesos
VAT-Exempt Sales
Zero Rated Sales
(P 37,000.00)
In partial/full payment of
Vat Amount
Total Sales
Form of Payment
10 BKLTS. (30X3) 2001-2500
Cash Check 06/19/2019: VALID UNTIL 06/19/2019 By:
3MAGSIKAP ST., DULONG BAYAN
Check No. TIN: 214-259-506-000 NON-VAT Authorized signature

Bank THIS OFFICIAL RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP

In settlement of the following ABC COMPANY

Particulars Amount 1F HAIR JORDAN BLDG., 123 PUKIS ST.,
LAMPONG VILLAGE KULOT CITY PHILIPPINES
TEL NO. (654) 321 0000
VAT REG. TIN: 111-333-555-777

Total Sales (VAT inclusive)

No. 2009
Less: VAT OFFICIAL RECEIPT
Total Date December 30, 2019
Total Due

Moon Bliss Manpower, Inc.

Less: Withholding Tax
Received from
Amount Due
Business style Human Resource Service with TIN 122-112-131-000
with address at #6 Naipet St., Diretso Ave., Kulot City
Vatable Sales
VAT-Exempt Sales the sum of pesos Three Hundred Fifty Thousand Pesos
Zero Rated Sales (P 350,000.00)
Vat Amount In partial/full payment of Call services
Total Sales
Form of Payment
Cash Check
By:
Check No. 0023984 10 BKLTS. (30X3) 2001-2500
06/19/2019: VALID UNTIL 06/19/2019 Authorized signature
3MAGSIKAP ST., DULONG BAYAN
TIN: 214-259-506-000 NON-VAT

Bank Landbank THIS OFFICIAL RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP
Note:
 All collections are deposited intact within 1 to 2 days from date of receipt.

CHECK DISBURSEMENT VOUCHER

ABC CO. Date: 12/01/2019
CV: #03455
Check #: #0511183

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of One Hundred Thousand Pesos

For:
ITEMS REFERENCE QTY UNIT PRICE TOTAL
December Rent 100,000.00

100,000.00

Prepared by: Checked by: Approved:

CHECK DISBURSEMENT VOUCHER

ABC CO. Date: 12/03/2019
CV: #03456
Check #: #0511184

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of Twenty Thousand Pesos

For: ITEMS REFERENCE QTY UNIT PRICE TOTAL

Office Supplies 20 1,000.00 20,000.00

20,000.00

Prepared by: Checked by: Approved:

 CHECK DISBURSEMENT VOUCHER

ABC CO. Date: 12/15/2019

CV: #03457
Check #: #0511185

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of Forty-Five Thousand Pesos

For:
ITEMS REFERENCE QTY UNIT PRICE TOTAL
Dec. 15 Salaries 45,000.00

45,000.00
Prepared by: Checked by: Approved:

CHECK DISBURSEMENT VOUCHER

ABC CO.
Date: 12/17/2019
CV: #03458
Check #: #0511186

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of One Hundred Fifty Thousand Pesos

For:
ITEMS REFERENCE QTY UNIT PRICE TOTAL
Laptop Computers 3 50,000.00 150,000.00

150,000.00

Prepared by: Checked by: Approved:

 CHECK DISBURSEMENT VOUCHER
ABC CO.
Date: 12/17/2019
CV: #03459
Check #: #0511187

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of Fifteen Thousand Pesos

For:
ITEMS REFERENCE QTY UNIT PRICE TOTAL
Electricity Bill 4,000.00
Water Bill 1,000.00
Internet 10,000.00

Utilities for the period Nov. 15 to Dec. 15

15,000.00

Prepared by: Checked by: Approved:

Account No. Account Name . Check No R/T No.

112 1604
8122-0008-48 ABC COMPANY 511188 1897
DOCUMENTARY STAMPS PAID

Pay to the order of KAYE HIRA P 75,000.00

Pesos SIBINTI PAYB TAWSAN PISOS

BANK OF THE PHILIPPINE ISLANDS

KULOT CURLY BRANCH UN-NAN ST., CORNER IGID AVE., KULOT Mkclkpnklbjhiw
CITY

'0000309381''001004''689700 7010529 00 200000000''

Note:
 Check #0511188 was cancelled because it contains errors. Banks do not accept checks with errors, erasures or
corrections. This check was replaced by Check #0511189.
 CHECK DISBURSEMENT VOUCHER
ABC CO. Date: 12/23/2019
CV: #03460
Check #: #0511189

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of Seventy-Five Thousand Pesos

For:
ITEMS REFERENCE QTY UNIT PRICE TOTAL
13th month pay 75,000.00

75,000.00

Prepared by: Checked by: Approved:

CHECK DISBURSEMENT VOUCHER

ABC CO.
Date: 12/28/2019
CV: #03461
Check #: #0511190

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of Five Thousand Pesos

For:
ITEMS REFERENCE QTY UNIT PRICE TOTAL
Fire insurance for 5,000.00
Jan. to Dec. 20x2

5,000.00

Prepared by: Checked by: Approved:

 CHECK DISBURSEMENT VOUCHER
ABC CO.
Date: 12/30/2019
CV: #03462
Check #: #0511191

Payable to: Ms. Kaye Hera - Company Treasurer

Address: Finance Dept., ABC COMPANY
In the amount of Forty-Five Thousand Pesos

For:
ITEMS REFERENCE QTY UNIT PRICE TOTAL
Dec. 31 Salaries 45,000.00

45,000.00

Prepared by: Checked by: Approved:

Notes:

 13th month pay is chargeable to “salaries expense” account.

 Use the “prepaid insurance” account to record the prepayment of insurance.
Bank Statement

BANK OF THE PHILIPPINE

ISLAND
Account Number : 8121-0008-48
Account Type : BPI Checking Account
Branch : KULOT CURLY BRANCH
Period Covered : 12/1/2019 -12/31/2019

Date Description Ref Details Debit Credit Balance

BEGINNING BALANCE 340,000.00
12/2/20x1 CHECK ENCASHMENT #023 CK#051183 100,000.00 240,000.00
12/5/20x1 CHECK DEPOSIT #040 Kulot City 262,000.00 502,000.00
12/15/20x1 CHECK ENCASHMENT #045 CK#0511835 45,000.00 457,000.00
12/16/20x1 CHECK DEPOSIT #099 Kulot City 60,000.00 517,000.00
12/17/20x1 CHECK ENCASHMENT #090 CK#051187 15,000.00 502,000.00
12/18/20x1 CHECK ENCASHMENT #078 CK#051186 150,000.00 352,000.00
12/22/20x1 CHECK ENCASHMENT #032 CK#051184 20,000.00 332,000.00
12/23/20x1 CHECK DEPOSIT #066 Kulot City 37,000.00 369,000.00
12/23/20x1 CHECK ENCASHMENT #067 CK#051189 75,000.00 294,000.00
12/27/20x1 CHECK DEPOSIT #077 Kulot City 56,000.00 350,000.00
12/30/20x1 CHECK ENCASHMENT #088 CK#051191 45,000.00 305,000.00

Additional information: Bank reconciliation

 Roof Solar, Inc., a customer, has informed the company of deposit amounting to P56,000 for call services
rendered in December. No official receipt has yet been issued to the customer.
Additional information: Bank reconciliation
i. Hedge Fund Inc., a customer, has been billed for call services rendered in December 2019 amounting to
P34,000. Hedge informed the Company that the check for the said amount is still being processed and is
expected to be deposited to the Company’s account on the first week of January 2020.
ii. Unused office supplies on December 31, 2019 amount to P 9,000.
iii. The laptop computers acquired in December have an estimated useful life of 2 years with no residual value.
The Company recognizes full-month depreciation in the month of acquisition. The annual depreciation for the
existing equipment (excluding the newly acquired laptop computers) is P 120,000.
iv. The loan payable pertains to a 12% bank loan taken on November 30, 2019. The principal on the loan is due
after five years but monthly interests are due at the beginning of each month starting January 1, 2020.
v. Although no bills have yet been received, Rak N’ Koll wants to accrue P 7,500 for unpaid utilities used from
December 16 to 31, 2019.
Requirements:
a. Analyze the supporting documents and record them in the Journal in a chronological order (i.e., arranged by
date.
b. Post transactions in the Ledger (use T-accounts).
 c. Prepare the unadjusted trial balance columns of the December 31, 2019 worksheet.
d. Prepare the bank reconciliation for the month of December 2019.
e. Prepare the year-end adjusting entries including the reconciling item(s) from Requirement ‘d’ above.
f. Complete the remaining columns of the December 31, 2019 worksheet up to the balance sheet columns.
g. Prepare the closing entries.
h. Prepare the 2019 statement of financial position, statement of comprehensive income, statement of changes in
equity, statement of cash flows and selected notes. (See Particulars below.)
Particulars:
1. Base your presentation on the illustrative financial statements in Chapters 1 to 4.
2. Use a classified and a report format presentation for the statement of financial position. Make the proper cross-
referencing to the following ‘Notes’:

Line items Note

Cash and cash equivalents 1
Trade and other receivables 2
Prepaid assets 3
Property, plant & equipment 4
Trade and other payables 5
Long-term borrowings 6

3. Provide additional narrative description in Note 6 for long-term borrowings.

4. Use the following additional information to complete the statement of cash flows. Use the indirect method of
presenting cash flows from operating activities.

Line items Dec. 31, 2018

Cash and cash equivalents P 67,500
Trade and other receivables -
Prepaid assets 34,000
Trade and other payables 7,500
Loans payable -

Compute the following financial ratios:

1. Current ratio
2. Quick (Acid-test) ratio
3. Debt ratio
4. Equity ratio
5. Debt-to-equity ratio
6. Net profit ratio
7. Return on assets
8. Return on equity (Return on net assets)