Acctg 13
Assignment - Review of Accounting Process
Problem 1
Classify the following items as:
A. Prepaid Expense
B. Unearned Revenue – received payment but not yet rendered
C. Accrued Revenue – service rendered but not yet paid
D. Accrued Expense – Payable
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Cash received for services not yet rendered - B
Supplies on hand - A
Utilities owed to be paid the following month - D
Taxes owed but payable in the next period - D
A three-year premium paid on a fire insurance policy for the buildings - A
Cash received for use of land within the next six months - B
Fees earned to be received the following month - B
Rent expense owed but not yet paid - D
Subscription received in advance by a magazine publisher - C
Fees earned but unbilled - D
Salaries owed but not yet paid - D
Rent revenue earned but not yet received - B
Insurance paid - A
Fees received but not yet earned - B
Unpaid wages - D
Problem 2
DEF Merchandising follows the policy of recording prepayments in revenue and expense accounts and reverses
appropriate adjusting entries at the beginning of the new accounting period. The records of the business show the
following:
1. On September 1, 2022, DEF borrowed P2,000,000 cash from the Bank of the Philippines by issuing 1 6%
note payable in one year. The interest is payable upon maturity of the note.
Cash 2M; Notes Payable 2M
2. On February 1, 2022, DEF paid insurance premium of P72,000 covering a period of 3 years beginning on
this date.
Prepaid Insurance 72K; Cash 72K
3. On December 1, 2022, DEF paid P360,000 representing rental for one year starting on this date
Prepaid Rent 360K; Cash 360K
4. DEF reports accounts receivable of P1,500,000 and allowance for uncollectible accounts of P10,000 (debit
balance); P50,000 of the receivables are uncollectible
Cash 1.35M, 50K, ADA 10K; ??
5. DEF pays all employees every Friday. The total payroll for the five-day workweek ending January 3,2023 is
P450,000
Salaries Expense 450K; Cash 450K
6. DEF purchased office equipment on August 1,2022 amounting to P120,000. On January 1,2022, the office
equipment account has a balance of P480,000. All equipment have estimated useful life of 5 years with no
residual value
7. Office supplies on hand on January 1, 2022 amounted to P5,000. During the year, office supplies of
P12,500 were purchased. On December 31,2022, there are unused supplies of P4,500.
8. DEF sublease part of its office space for P30,000 per month. On November 1,20122, it received rental
payments for six months starting on this date
9. Merchandise inventory on January 1 and December 31 amounted to P180,000 and P220,000 respectively.
Required: Prepare the necessary adjusting entries on December 31,2022
Problem 3
The trial balance of VWX Advertising Agency before and After the posting of adjusting entries is shown below:
Required:
1. For the comparative trial balance presented, prepare the seven adjusting entries made. The difference
between the amounts in the “Before Adjustments” columns and after the amounts in the “After Adjustments”
columns are the result of the seven adjusting entries.
2. Prepare Income Statement and Statement of Financial Position
3. Prepare closing entries
4. Prepare Post-Closing Trial Balance