Adjusting entries quiz# 1

ACCRUALS & DEFERRALS

PART 1: ACCRUALS

ACCRUED EXPENSES:
Based on the following data, prepare the necessary adjusting entries on December 31,
2019. Support your entries with the needed computation

1. salaries already earned by the

employees but not yet paid as of salaries expense 51,250
December 31, P 51,250 salaries payable 51,250

2. A 60-day , 12% note payable for

P550,000, dated December 11, is interest expense 3,667
outstanding as of December 31. interest payable 3,667
Interest on the note is payable upon
maturity 550,000 x .12 x 20/360 = 3,667

3. utilities already incurred but not yet utilities expense 5,000

paid P 5,000 utilities payable 5,000
PART 2: PRECOLLECTION

ACCRUED INCOME

Transactions Adjusting entry

December 31, 2019

1. The Notes Receivable account has Interest receivable 45,000

a balance of P4500,000 interest income 45,000
representing a 90-day, 12% note
received on December 1. The 4,500,000 x .12 x 30/360= 45,000
Interest on the note is collectible
upon maturity.

2. Rent due and uncollected from the Rent receivable 30,000

tenants for the month of December, rent income 30,000
P 30,000

3. A 60-day, 12% note receivable for Interest receivable 2,800

P420,000, dated December 11, is Interest income 2,800
outstanding as at December 31
420,000 x .12 x 20/360 = 2,800
PART 3

PRECOLLECTED INCOME

Based on the following data, prepare the entries upon receipt of cash and necessary
adjusting entries at the end of the current calendar year

ENTRY UPON RECEIPT ADJUSTING ENTRY December 31,

OF CASH 2019
1. On November 1,
Rent Income Cash 150,000 Rent Income 125,000
was credited for Rent Income 150,000 Unearned rent income 125,000
p150,000
representing unearned=150,000 x 10/12
rental for 12 = 125,000
months

2. On November 1,
2019 , Atty. Cash 30,000 Retainer’s fees 10,000
Mijares received Retainer’s fees 30,000 Unearned retainer’s fees 10,000
P30,000 as her
retainer’s fees
for professional unearned=30,000 x 1/3=10,000
services to be
rendered until
January31,
2020

3. Mina Creative
Arts received P cash 150,000 service fees 112,500
150,000 from a service fees 150,000 unearned service fees 112,500
customer
representing
service fees for unearned= 150,000 x 9/12=112,500
a period of 12
months
beginning
October 1, 2019
PART 4
PREPAYMENTS

Based on the following data, prepare the entries upon receipt of cash and necessary
adjusting entries at the end of the current calendar year

Interest Upon Payment Of ADJUSTING ENTRY, December

Cash 31, 2019

1. Interest paid on interest expense 900 prepaid interest 600

bank loan, debited cash 900 interest expense 600
to interest expense
account , for the prepaid= 900 x 40/60
period of 60 days = 600
from December 11,
amounted to P 900

2. Store supplies
debited to the Prepaid store supp 28,750 store sup. expense 17,250
prepaid store Cash 28,750 prepaid store sup. 17,250
supplies account
during the year, expense= 28,750-11,500
P28,750. As of = 17,250
December 31,
P11,500 is unused

3. Of the P12,000
balance of the Insurance expense 12,000 prepaid insurance 3,000
insurance expense Cash 12,000 insurance expense 3,000
account, P9,000
expired during the prepaid= 12,000-9,000
current year =3,000