Carlos Hilado Memorial State College

Alijis Campus | Binalbagan Campus | Fortune Towne Campus | Talisay Campus

COLLEGE OF ENGINEERING AND INFORMATION TECHNOLOGY

FUNDAMENTALS OF ACCOUNTING
Activity #8
st
1 Semester A.Y. 2020-2021
BS in Information Technology II

Solve the following problems:

1. Office chairs and tables were purchased from a furniture shop amounting to Php 350,000 on
December 1, 2013. The company estimated that the life of the pieces of furniture will be 10
years and can be sold for a scrap value of Php 30,000.
a. What is the annual depreciation?
b. What is the monthly depreciation?
c. What is the adjusting journal entry for the depreciation for year 2013?
d. What is the book value of office chairs and tables as of December 31, 2017?

2. A prepaid rent account amounting to Php 600,000 was shown in the trial balance on December
31, 2018. The account is paid on May 1, 2018 and is good for one year rental for period May
1, 2018 to April 30, 2019.
a. What is the adjusting entry on December 31, 2018?
b. What is the adjusted balance of prepaid rent account as of December 31, 2018?

3. Due to payroll cut-off, the salaries of the employees from December 21-31, 2018 amounting to
Php 45,000 was paid on January 15, 2019 payroll.
a. What is the adjusting entry on December 31, 2018?
b. What will be the entry on January 15, 2019 upon payment of payroll?

4. The company received an advance payment from a customer amounting Php360,000 as rental
income for the building spaces held for lease. The amount was received at April 1, 2018 and
is good for one year rental for period April 1, 2018 to March 31, 2019. The whole amount was
recorded by the company as rental income on April 1, 2018.
a. What is the adjusting entry on December 31, 2018?
b. What is the adjusted balance of rental income as of December 31, 2018?

5. The company placed its Php 250,000 cash into a 45-day, 15% time deposit with Bank Z on
November 19, 2018. (One year is equivalent to 365 days)
a. What is the adjusting entry on December 31, 2018, to recognize its interest income?
b. How much is the total interest income earned by their time deposit for 45days?
 Carlos Hilado Memorial State College
Alijis Campus | Binalbagan Campus | Fortune Towne Campus | Talisay Campus

COLLEGE OF ENGINEERING AND INFORMATION TECHNOLOGY

6. Total sales of the company was Php 350,000 during the year, and 40% are sales on account
or credit sales. Out of the total 40% credit sales, 10% of it are deemed uncollectible or
doubtful of collection.
a. What is the estimated amount of doubtful accounts or those deemed uncollectible?
b. What is the adjusting entry to recognize the doubtful accounts?

Doubtful accounts expense xxx

Allowance for doubtful accounts xxx