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Basic Accounting - Q4

The document discusses accounting entries for various transactions including: 1) Purchasing office supplies using asset and expense methods and the adjusting entry on December 31. 2) Recording rent payment and adjustment using asset/expense methods. 3) Depreciation adjusting entry on December 31 for a building purchase. 4) Recording prepaid subscription fees receipt and adjustment using liability/income methods. 5) Salaries adjusting entry on January 31 for salaries incurred through January 27. 6) Adjusting entry on December 31 for legal services performed but to be billed in January.

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108 views1 page

Basic Accounting - Q4

The document discusses accounting entries for various transactions including: 1) Purchasing office supplies using asset and expense methods and the adjusting entry on December 31. 2) Recording rent payment and adjustment using asset/expense methods. 3) Depreciation adjusting entry on December 31 for a building purchase. 4) Recording prepaid subscription fees receipt and adjustment using liability/income methods. 5) Salaries adjusting entry on January 31 for salaries incurred through January 27. 6) Adjusting entry on December 31 for legal services performed but to be billed in January.

Uploaded by

wivada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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1. Office supplies were purchased for cash on December 1, 2018 for P12,390.

0. The supplies were to be used over the next


several months. A physical inventory showed that P3,585 of the supplies were on hand on December 31, 2018. Show
the entries for the purchase using the asset method and the expense method. What adjusting entries would be
necessary at December 31, 2018 assuming financial statements are prepared at that time?

Asset Method Expense Method

2. Assume that rent of P57,600 was paid on September 1, 2018, to cover a one-year period from the date. Prepare the
journal entries needed to record (a) the payment and (b) the adjustment as of December 31, 2018 using both the asset
method and the expense method.

Asset Method Expense Method

3. Assume that a company acquires a building on January 1, 2018 at a cost of P1,410,000. The building has an estimated
useful life of 20 years and an estimated residual value of P150,000. What adjusting entry is needed on December 31,
2018 to record the depreciation for the entire year?
Computation:

4. On June 1, 2018, ABC Company received a total of P14,400 as payment in advance of a one-year subscriptions to a
monthly magazine, beginning June 1, 2018. Give entries needed to record (a) the receipt of the subscription fees and
(b) to adjust the accounts on December 31, 2018 using the liability method and the income method

Liability Method Income Method

5. Amiable Company incurs salaries at the rate of P4,200 per day. The last payday in January is Friday, January 27. Give
the necessary adjusting entry on January 31.

6. Alipio and Domingo, a law firm, performed legal services in late December 2018 for clients. The P42,000 of the services
will be billed to the clients in January, 2019. Give the adjusting entry that is necessary on December 31, 2018 if the
financial statements are prepared at the end of each month.

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