Problem 2-1

GENERAL JOURNAL

Date Page Number 01

2020 Descriptions PR Debit Credit

Cash Php 7,200,000

Sales Php 7,200,000

to record the sales

Premiums (30,000 pillows for Php100) 3,000,000

Cash 3,000,000

to record the purchase of premiums

Cash (7,500 distributed pillows * Php 20 remittance) 150,000

Premiums Expense (at net cost) 675,000

Premiums 825,000
to record the distribution of 7500 pillows

Premiums Expense 270,000

Premiums Liability 270,000

to record the premiums liability at the end of the year

GENERAL JOURNAL
Date Page Number 01
2021 Descriptions PR Debit Credit
Cash Php 8,400,000
Sales Php 8,400,000
to record the sales

Premiums (5,000 pillows for Php100) 500,000

Cash 500,000
to record the purchase of premiums

Cash (12,500 distributed pillows * Php 20

250,000
remittance)

Premiums Expense (at net cost) 1,125,000

Premiums 1,375,000
to record the distribution of 12,500 pillows
Premiums Expense 450,000
Premiums Liability 450,000

to record the premiums liability at the end of the year

Problem 2-2

Liabilty for refundable deposits Php 300,000

Deposits made on cans sold (2020) 2,000,000

Deposits on cans refunded (2020) -2,200,000

Remaining liability for refundable deposits Php 100,000

Current Liabilities Php 100,000

Non Current Liabilities Php 500,000

2021 sales still under warranty after December 31, 2021
First contract year of July 1, 2021 sales 25,000
Second contract year of January 1, 2021 sales 100,000

Second contract year of july 1, 2021 sales 100,000

Estimated Warranty Liability December 31,2021 Php 255,000

Estimated Warranty Liability per book 250,000

Increase in Warranty Liability Php 5,000

Correct Entry
2021 Warranty Expense Php 5,000
Estimated Warranty Liability Php 5,000

to recordd the increase in warranty liability

Problem 2-4

Years Commision Commission

Salary Total
Employed Rate (3,000,000*r)

Abigail 10 Php 15,000 5% Php 150,000 Php 165,000

Deborah 9 15,000 5% 150,000 165,000

Esther 8 15,000 5% 150,000 165,000

Jael 6 15,000 4% 120,000 135,000
Naomi 3 15,000 2.50% 75,000 90,000

Naomi 0.75 15,000 1% 30,000 45,000

Total Salaries and Commissions Expense Php 765,000

Problem 2-6

1)

B= 10,500,000 * 0.5

B= Php 525,000

2)
B= 0.05 (10,500,000 - B)

B= 525000 - 0.05B
B + 0.05B = 525,000
1.05B = 525,000

1.05
B= Php 500,000

3)
B= 0.05 [10,500,000 - B - 0.3 (10,500,000 - B)]
B= 0.05 [10,500,000 - B - 0.3 (10,500,000 - B)]
B= .05(10,500,000 - B - 3,150,000 + .3B)
B= 525,000 -0.05B - 157,500 + 0.015B
B + 0.05B - 0.015B = 525,000 - 157,500

1.035B = 367,500
B= 367,500/1.035
B= Php 355,072.46

T= 0.3 (10,500,000 - B)
T= 0.3 (10,500,000 - 355,072.46)
T= 3,043,478.26

4)
B= 0.05 (10,500,000 - T)
B= 0.05 [10,500,000 - 0.3 (10,500,000 - B)]
B= 0.05 [10,500,000 - 3,150,000 + 0.3B]
B= 525,000 - 157,500 + 0.015B
B - 0.015B = 367,500
0.985B = 367,500

0.98
B= Php 373,096.45

T= .3(10,500,000 - B)
T= .3(10,500,000 - 373,096.45)
T= 3,038,071.07
Problem 2-2

Liabilty for refundable deposits Php 300,000

Deposits made on cans sold (2020) 2,000,000
Deposits on cans refunded (2020) -2,200,000
Remaining liability for refundable deposits Php 100,000

Current Liabilities Php 100,000

Non Current Liabilities Php 500,000
Problem 2-3
1)

GENERAL JOURNAL

Date Page Number 01

Descriptions PR Debit Credit

2020 Cash Php 6,000,000
Sales Php 6,000,000
to record the sales

Warranty Expense 60,000

Cash 60,000

to record the payment of the actual waaranty cost

2021 Cash 10,000,000

Sales 10,000,000
to record the sales

Warranty Expense 170,000

Cash 170,000

to record the payment of the actual warranty cost

2)
GENERAL JOURNAL
Date Page Number 01
Descriptions PR Debit Credit
2020 Cash Php 6,000,000
Sales Php 6,000,000
to record the sales

Warranty Expense 180,000

Estimated Warranty Liability 180,000
to record the estimated warranty

Estimated Warranty Liability 60,000

Cash 60,000

to record the payment of the actual warranty cost

2021 Cash Php 10,000,000

Sales Php 10,000,000
to record the sales

Warranty Expense 300,000

Estimated Warranty Liability 300,000
to record the estimated warranty
 Estimated Warranty Liability 170,000
Cash 170,000
to record the payment of the actual warranty
3)
Estimated Warranty
2020 Php 180,000
2021 300,000
Php 480,000
Actual Warranty Cost
2020 60,000
2021 170,000
Php 230,000
Estimated Warranty Liab (Dec. 31, 2021) Php 250,000

4)
Warranty Expenses related to sales (2020)
2020 First contract year of January 1, 2020 sales Php 30,000
First contract year of July 1, 2020 sales 15,000

2021 First contract of year of July 1, 2020 sales 15,000

Second contract year of Januray 1, 2020 sales 60,000
Second contract year of July 1, 2020 sales 30,000

2022 Second contract year of July 1, 2020 sales 30,000

Php 180,000

Warranty Expenses related to sales (2021)

2021 First contract year of January 1, 2021 sales Php 50,000
First contract year of July 1, 2021 sales 25,000

2022 First contract year of July 1, 2021 sales 25,000

Second contract year of Januray 1, 2021 sales 100,000
Second contract year of July 1, 2021 sales 50,000

2023 Second contract year of July 1, 2021 sales 50,000

Php 300,000

2020 sales still under warranty after December 31, 2021

Second contract year of july 1, 2020 sales Php 30,000
2021 sales still under warranty after December 31, 2021
First contract year of July 1, 2021 sales 25,000
Second contract year of January 1, 2021 sales 100,000
Second contract year of july 1, 2021 sales 100,000
Estimated Warranty Liability December 31,2021 Php 255,000
Estimated Warranty Liability per book 250,000
Increase in Warranty Liability Php 5,000

Correct Entry
2021 Warranty Expense Php 5,000
Estimated Warranty Liability Php 5,000
to recordd the increase in warranty liability
Problem 2-4

Commission
Years Employed Salary Commision Rate Total
(3,000,000*r)

Abigail 10 Php 15,000 5% Php 150,000 Php 165,000

Deborah 9 15,000 5% 150,000 165,000
Esther 8 15,000 5% 150,000 165,000
Jael 6 15,000 4% 120,000 135,000
Naomi 3 15,000 2.50% 75,000 90,000
Naomi 0.75 15,000 1% 30,000 45,000

Total Salaries and Commissions Expense Php 765,000

Problem 2-6

1)
B= 10,500,000 * 0.5
B= Php 525,000

2)
B= 0.05 (10,500,000 - B)
B= 525000 - 0.05B
B + 0.05B = 525,000
1.05B = 525,000
1.05
B= Php 500,000

3)
B= 0.05 [10,500,000 - B - 0.3 (10,500,000 - B)]
B= 0.05 [10,500,000 - B - 0.3 (10,500,000 - B)]
B= .05(10,500,000 - B - 3,150,000 + .3B)
B= 525,000 -0.05B - 157,500 + 0.015B
B + 0.05B - 0.015B = 525,000 - 157,500
1.035B = 367,500
B= 367,500/1.035
B= Php 355,072.46
T= 0.3 (10,500,000 - B)
T= 0.3 (10,500,000 - 355,072.46)
T= 3,043,478.26

4)
B= 0.05 (10,500,000 - T)
B= 0.05 [10,500,000 - 0.3 (10,500,000 - B)]
B= 0.05 [10,500,000 - 3,150,000 + 0.3B]
B= 525,000 - 157,500 + 0.015B
B - 0.015B = 367,500
0.985B = 367,500
0.98
B= Php 373,096.45

T= .3(10,500,000 - B)
T= .3(10,500,000 - 373,096.45)
T= 3,038,071.07