Seatwork

Presented below, together with account numbers, is the unadjusted trial balance Mauvy Reyes Travel Agency
for the year ended Dec. 31, 2020.

Mauvy Reyes Travel Agency

Unadjusted Trial Balance
Dec 31, 2020

110 Cash P 126,000

120 Accounts Receivable 645,000
130 Prepaid Rent 360,000
140 Office Supplies 63,000
150 Furniture 2,175,000
155 Accumulated Depreciation P 435,000
210 Notes Payable 900,000
220 Accounts Payable 285,000
230 Salaries Payable
240 Interest payable
310 Reyes, Capital 1,680,000
320 Reyes, Withdrawals 1,200,000
410 Travel Revenues 5,133,000
510 Salaries Expense 3,771,000
520 Rent Expense
530 Office Supplies Expense
540 Depreciation Expense
550 Interest Expense
560 Miscellaneous Expense 93,000
Totals P 8,433,000 P 8,433,000

Information pertaining to Reyes's accounts is as follows:

a. On Nov. 1, 2020, Reyes paid Juanita Rabena Realtors P360,000 for six months' rent on the office building
commencing that date.
b. Office supplies on hand at Dec. 31, 2020 amounted to P27,000.
c. Depreciation expense for the furniture amounted to P75,000 for the year.
d. At Dec. 31, 2020, P105,000 salaries have accrued.
e. The P900,000 note payable was issued on Oct. 1, 2020. It will be repaid in 12 months together with
interest at an annual rate of 24%.

Required: Prepare the adjusting entries.

On June 30, 2020, the end of fiscal year, the following information is available to Noel Hungria's accountants
for making adjusting entries:
a. Among the liabilities of the entity is a P2,400,000 mortgage payable. On June 30, the accrued interest on
this mortgage amounted to P120,000.

b. Assume that on, July 2, a Friday, the entity, which is on a five-day workweek and pays employees weekly,
paid its regular salaried employees P192,000.

c. On June 29, the entity completed negotiations and signed a contract to provide services to a new client at
an annual rate of P36,000.

d. The Supplies account showed a beginning balance of P16,150 and purchases during the year of P37,660. The
year-end inventory revealed supplies on hand of P11,860.

e. The Prepaid Insurance account showed the following entries on June 30:
Beginning Balance P15,300
January 1 29,000
May 1 33,660
The beginning balance represents the unexpired portion of a one-year policy purchased in April of the
previous year. The January 1 entry represented a new one-year policy, and the May 1 entry is the additional
coverage of a three-year policy.

f. The following table contains the cost and annual depreciation for buildings and equipment, all of which were
purchased before the current year:

Account Cost Accumulated Depreciation

Buildings P 1,850,000 P 73,000
Equipment 2,180,000 218,000

g. On June 1, the entity completed negotiations with another client and accepted an advance of P210,000 for
services to be performed in the next year. The P210,000 was credited to Unearned Service Revenues.

h. The entity calculated that as of June 30 it had earned P35,000 on a P75,000 contract that will be completed
and billed in August.

Required: Prepare the adjusting entries.