6 Months Credited This Amount To Unearned Rent Revenue

FAR PETITION CLASS 2021
ADJUSTING ENTRIES:
Problem 1
Based on the given independent situations, prepare the necessary adjusting entries
at December 31.
1. On April 1, 2019, Angelo Company purchased a 1-year fire insurance
policy for P9,000 and debited this amount to prepaid insurance.
Fire insurance expense 6,740
Prepaid insurance 6,750
9000 x 9/12 = 6750
2. On November 1, 2019, Benjamin Inc. received P18,000 from the

tenant of office space owned by Benjamin Inc. as payment for the next
6 months rent and credited this amount to unearned rent revenue.
Unearned rent revenue 6,000
Rent revenue 6,000
18.000 x 2/6 = 6,000
3. When Edgar Company purchases office supplies, it debits office

supplies on hand. At December 31, 2019, the pre-adjustment balance
of that account is P29,850. A physical count at December 31, 2019,
determines that P4,300 of office supplies are on hand.
Supplies expense 25,550
Office supplies on hand 25,550
29,850 – 4,300 = 25,550
4. On July 1, 2019, Valdez Company accepted a 3-month, 9% note for

P60,000 from a customer in settlement of an account receivable.
Interest receivable 1,350
Interest income 1,350
60,000 x 9% x 3/12 = 450
5. On July 1, 2019, Ondoy Company purchased some office equipment

for P139,000. The equipment is being depreciated over an expected
useful life of 6 years, with an estimated salvage value of P13,000.
Depreciation expense 10,500
Accumulated depreciation 10,500
(139,000-13,000)/6 = 21,000/12 = 1,750 x 6 = 10,500
6. On November 6, 2019, Pepeng Company received P35,000 from a

customer for consulting services to be rendered, and credited this
amount to unearned consulting fees. By December 31, 2019, only 80%
of the consulting engagement had been completed.
Unearned consulting fees 28,000
This study source was downloaded by 100000835208376 from CourseHero.com on 05-07-2022 10:21:47 GMT -05:00
https://www.coursehero.com/file/135459094/FAR-Problems-and-Exercises-Part-6-Adjusting-Entriesdocx/
Consulting fees 28,000
35,000 x 80% = 28,000
7. As of December 31, 2019, the end of the calendar year, Maricar

Company had not received its electric power billing for December.
Based on past experiences, the December bill is expected to be 6,100.
Utilities expense 6,100
Utilities payable 6,100
8. Guests at the Hyatt Hotel are expected to pay for their lodging when
they check out of their rooms. At December 31, 2019, rental fees owed
by guest who still occupied their rooms amounted to P25,150.
Rental fees receivable 25,150
Rental fees 25,150
9. On November 1, 2019, Lionel Company paid rent on its office facilities

for November, December and January of the following year, debiting
P24,000 to prepaid rent.
Rent expense 16,00
0
Prepaid rent (24,000 x 2/3) 16,00
0
10. On April 1, 2019, Manolo Company had issued a P50,000, 1-year, 10%
note payable to a supplier. Interest is to be paid when the note is paid.
Interest expense 3,750
Interest payable 3,750
50,000 x 10% x 9/12 = 3,750
Problem 2
Early in 2019, Ocampo Company received P90,000 from a customer for
services to be rendered, and this amount was credited to unearned service
revenue. At the end of 2019, it was determined that ¼ of those services had
been performed. How much is the balance of revenue to be recognized at
December 31, 2019?
Problem 3
Below are the information from the accounts of Ka Emong Company as of
December 31, 2019, the close of its accounting period.
A. The machinery account has a balance of P75,000. Part of this amount
consists of machinery acquired on October 1, 2019 at a cost of P26,000. Machinery
has been depreciated at a rate of 8% per year.
B. Rent of P6,600 for one year in advance was paid on October 31, 2019, the
debit at that time being made to the expense account.
C. The balance in the supplies account on December 31, 2019 was P7,200 the
same balance as at December 31, 2018 after adjustment.
Additional supplies costing P3,500 were purchased during 2019 and charge
to supplies expense. An inventory of supplies taken on December 31, 2019,
showed the amount on hand to be P4,500.
D. The allowance for doubtful accounts has a credit balance of P300. It is
estimated that 3% of the P19,700 of accounts receivable outstanding on
December 31, 2019 will be uncollectible.
E. A 360 day, 15% note was received in the amount of P200,000 on August 1,
2019.
F. A five-year insurance premium of P10,000 was paid on May 31, 2018 for
coverage effective on that date. The entire amount was debited to the
unexpired insurance account. ASSET
Based on the following information, answer the following:

1. Depreciation expense for 2019 should be ___________.
2. How much should be the adjusted balances of prepaid rent expense and rent
expense at December 31, 2019?
3. How much should be the adjusted balances of supplies expense and supplies
inventory at December 31, 2019?
4. How much should be the adjusted balances of doubtful accounts expense and
allowance for doubtful account at December 31, 2019?
5. How much should be the amount of interest expense to be recorded at

December 31, 2019?
6. How much should be the balance of the unexpired insurance and insurance
expense accounts at December 31, 2019?
7. A business received cash of P30,000 in advance for service that will be

provided later. The cash received was recorded by debiting cash and
crediting unearned revenue for P30,000. At the end of the period P11,000 is
still unearned. What will be the adjusting entry for this situation?
8. Three days’ salaries were unpaid as at December 31. Salaries are P75,000 for
a five-day work week. How much will be the amount of salaries payable at
month end?
9. Accounts receivable of P35,000 and an allowance for doubtful accounts of

P350 appears in the general ledger of Angelo Company. The company
estimated that a 2% of accounts receivable is considered doubtful of
collection at the end of the accounting period. How much will be the net
realizable value of the accounts receivable for this transaction?
10. The company acquired a Machinery for P262,000 on March 1, 2019. The
estimated life of the asset is 10 years with a salvage value of P12,000. How
much will be the net book value of the Machinery on December 31, 2022?
Powered by TCPDF (www.tcpdf.org)

6 Months Credited This Amount To Unearned Rent Revenue

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

6 Months Credited This Amount To Unearned Rent Revenue

Uploaded by

Copyright:

Available Formats

FAR PETITION CLASS 2021

2. On November 1, 2019, Benjamin Inc. received P18,000 from the

3. When Edgar Company purchases office supplies, it debits office

4. On July 1, 2019, Valdez Company accepted a 3-month, 9% note for

5. On July 1, 2019, Ondoy Company purchased some office equipment

6. On November 6, 2019, Pepeng Company received P35,000 from a

7. As of December 31, 2019, the end of the calendar year, Maricar

9. On November 1, 2019, Lionel Company paid rent on its office facilities

Based on the following information, answer the following:

5. How much should be the amount of interest expense to be recorded at

7. A business received cash of P30,000 in advance for service that will be

9. Accounts receivable of P35,000 and an allowance for doubtful accounts of

You might also like