BROKENSHIRE COLLEGE SOCSKSARGEN, INC.

Ced Avenue, National Highway, Lagao, General Santos City, South Cotabato
Prelim Examination
“FINANCIAL ACCOUNTING 2”

NAME:
GENERAL INTRUCTION: Write the correct answer

PROBLEM #1

HI reported the following items on its December 31, 2019 trial balance:
 Accounts Payable, P1,089,000
 Advances to officers and employees, P 45,000
 Unearned Income, P 288,000
 Outstanding gift certificates issued, redeemable with merchandise, P 258,000
 Cash surrender value of life insurance, P 75,000
 Bonds payable, face value, Payable in 5 annual installment P5,550,000
 Discounts on bond payable, P 225,000
 Accrued interest receivable, P 39,000
 Stock Dividend Payable P 50,000

1. How much should be reported in the December 31, 2019 balance sheet as total liabilities?
2. How much should be the Current Liabilities?
3. How much should be the Noncurrent Liabilities?
4. What is the journal entry if there will be a full payment of Accounts Payable (2pts)

PROBLEM #2
Ang Cute Co. is requiring a deposit of P 100 for each container that costs P80 each. During the period, 100 containers were collected
with deposit . These containers are required to be returned within 3 months from date of issue. At the end of the period, 40 containers
remained un-returned and out of these, 10 are expired and corresponding deposits are forfeited.

1. How much is the outstanding liability on containers’ deposit?

2. How much is the gain on sales of the forfeited deposit?
3. What is the necessary journal entry to record the forfeited 10 containers?(3pts)

PROBLEM #3
GANDAKUTIS KO Inc., sells a box of beauty soup at P350.00. A 6 sachet of Black head remover is offered to customers on the
return of 3 empty box of the beauty soup plus a remittance of P5.00. Each sachet has a cost of P20pesos and it is estimate the 55%
of the box will be returned.

The data for the fist year concerning the premium plan are summarized below”
Sales, 15, 000 box of soap at P350, P5,250,000
Black heads remover purchased 50,000 sachet P1,000,000
Box Returned, 5000

1. How much is estimated liability at the of the year?

2. How much is remaining Premium Expense?
3. Prepare all the necessary journal entries.

PROBLEM #4
 BROKENSHIRE COLLEGE SOCSKSARGEN, INC.
Ced Avenue, National Highway, Lagao, General Santos City, South Cotabato
Prelim Examination
“FINANCIAL ACCOUNTING 2”

W sells washing machines that carry a 3 year warranty against manufacturer’s defects. Based on the company experience, warranty
costs were estimated at average of P300/unit sold. During 2025, W sold 24,000 at P5,000.00 washing machines and paid warranty
costs of P1,700,000.

1. In its income statement for the year ended December 31, 2025, W should report warranty expense of?
2. In its balance sheet as of December 31, 2025, How much will be the estimated warranty liabilities
3. Prepare all the necessary journal entry for the year 2025.

PROBLEM #5

At December 31, 2020, Laser Company had 1,000 gift certificates outstanding, which had been sold to customers during 2020 for P75.
Laser operates on a gross margin of 60%.

1. How much revenue pertaining to the 1,000 outstanding gift certificates should be deferred at December 31, 2020?
2. Prepare all the necessary journal entry.

PROBLEM #6

The net income for year 2025 of PC before any deduction for bonus and income tax amounted to P2,500,000 Under an incentive
compensation plan, the general manager is entitled to a yearend bonus of 10% of the net income before deducting the bonus, but after
deducting the income tax. The prevailing income tax rate is 32%

1. How much is the bonus?