Problem 3-8

Requirement 1. Journal Entries

a The appropriation is posted (recorded) in the Registry of Appropriations and Allotments (RAPAL).
b The allotment is posted (recorded) in the Registry of Appropriations and Allotments (RAPAL) and Registries
c The obligations are recorded in the Obligation Request and Status (ORS) and Registries of Allotments, Obl
d Cash-Modified Disbursement System (MDS), Regular ₱1,050,000
Subsidy from National Government ₱1,050,000
To recognize receipt of NCA from the DBM
e Salaries and Wages, Regular ₱380,000
Personal Economic Relief Allowance (PERA) 20,000
Due to BIR ₱90,000
Due to GSIS 30,000
Due to Pag-IBIG 20,000
Due to PhilHealth 10,000
Due to Officers and Employees 250,000
To recognize payable to officers and employees upon approval of payroll
Advances for Payroll ₱250,000
Cash-Modified Disbursement System (MDS), Regular ₱250,000
To recognize grant of cash advance for payroll
Due to Officers and Employees ₱250,000
Advances for Payroll ₱250,000
To recognize liquidation of Payroll Fund
f Office Equipment ₱320,000
Accounts Payable ₱320,000
To recognize delivery of office equipment
g Accounts Payable ₱320,000
Due to BIR ₱20,000
Cash – Modified Disbursement System (MDS), Regular 300,000
To recognize payment of accounts payable
h Office Supplies ₱150,000
Inventory Accounts Payable ₱150,000
To recognize delivery of office supplies
i Accounts Payable ₱120,000
Due to BIR ₱10,000
Cash – Modified Disbursement System (MDS), Regular 110,000
To recognize payment of accounts payable
j Water Expenses ₱20,000
Electricity Expenses 60,000
Telephone Expenses 40,000
Janitorial Expenses 80,000
Security Expenses 100,000
Due to BIR ₱20,000
Cash – Modified Disbursement System (MDS), Regular 280,000
To recognize issuance of MDS checks as payment for expenses
k Office Supplies Expense ₱130,000
Office Supplies Inventory ₱130,000
To record the issuance of office supplies to end users
l Accounts receivable ₱240,000
Waterworks System Fees ₱240,000
 To recognize billing of income
m Cash – Collecting Officers ₱200,000
Accounts receivable ₱200,000
To recognize collection of current year’s billed income
Cash-Treasury/Agency Deposit, Regular ₱200,000
Cash – Collecting Officers ₱200,000
To recognize remittance of income to the BTr
n Cash-Treasury/Agency Deposit, Regular ₱50,000
Tax on Delivery Vans and Trucks ₱50,000
To recognize collection and remittance of income to BTr through Authorized Government Depository Banks (AGDB)
o Cash-Tax Remittance Advice ₱160,000
Subsidy from National Government ₱160,000
To recognize the constructive receipt of NCA for TRA
Due to BIR ₱160,000
Cash-Tax Remittance Advice ₱160,000
To recognize constructive remittance to BIR of taxes withheld through TRA
p Due to GSIS ₱34,000
Due to Pag-IBIG 22,000
Due to PhilHealth 11,000
Cash-Modified Disbursement System (MDS), Regular ₱67,000
To recognize remittance to GSIS, Pag-IBIG and PhilHealth
ments (RAPAL).
ts (RAPAL) and Registries of Allotments, Obligations and Disbursements (RAOD).
gistries of Allotments, Obligations and Disbursements (RAOD).
epository Banks (AGDB)
Requirement 2: Posting to the Ledger

Cash-Collecting Officers Cash-Treasury/Agency Deposit, Regular

beg. 30,000 (m.2) 200,000
(m.1) 200,000 200,000 (m.2) (n) 50,000
30,000 end. 250,000 end.

Cash-MDS, Regular Cash-Tax Remittance Advice

(d) 1,050,000 250,000 (e.2)
300,000 (g) (o.1) 160,000 160,000 (o.2)
110,000 (i) 0 end.
280,000 (j)
67,000 (p)
43,000 end.

Accounts Receivable Office Supplies Inventory

beg. 80,000 (h) 150,000 130,000 (k)
1 240,000 200,000 (m.1) 20,000 end.
120,000 end.

Buildings Accum. Depreciation-Bldgs.

beg 800,000 650,000 beg
800,000 end. end. 650,000

Office Equipment Accum. Depreciation-Bldgs.

beg. 340,000 180,000 beg
1 320,000 end. 180,000
660,000 end.

Advances for Payroll Accounts Payable

(e.2) 250,000 250,000 (e.3) 60,000 beg.
- (g) 320,000 320,000 (f)
(i) 120,000 150,000 (h)
90,000

Due to Officers and Employees Due to BIR

(e.3) 250,000 250,000 (e.1) 20,000 beg.
 - 90,000 (e.1)
20,000 (g)
10,000 (i)
(o.2) 160,000 20,000 (j)
0

Due to GSIS Due to PAG-IBIG

4,000 beg. 2,000 beg.
(e.3) 34,000 30,000 (e.1) (e.3) 22,000 20,000 (e.1)
- -

Due to PhilHealth Accumulated Surplus (Deficit)

1,000 beg. 333,000 beg.
(p) 11,000 10,000 (e.1) end. 333,000
-

Tax on Delivery Vans and Trucks Waterworks System Fees

50,000 (n) 240,000 1
end. 50,000 end. 240,000

Subsidy from NG Salaries and Wages, Regular

1,050,000 (d) (e.1) 380,000
160,000 (o.1) 380,000 end.
end. 1,210,000

PERA Office Supplies Expense

(e.1) 20,000 (k) 130,000
20,000 end. 130,000 end.

Water Expenses Electricity Expenses

(j) 20,000 (j) 60,000
20,000 end. 60,000 end.

Telephone Expenses Janitorial Expenses

(j) 40,000 (j) 80,000
40,000 end. 80,000 end.
 Security Expenses
(j) 100,000
100,000 end.
 Accounts Debit Credit
Cash - Collecting Officers ₱30,000
Cash-Treasury/Agency Dep., Reg. 250,000
Cash-MDS, Regular 43,000
Cash-Tax Remittance Advice -
Accounts Receivable 120,000
Office Supplies Inventory 20,000
Buildings 800,000
Accumulated Depreciation - Buildings ₱650,000
Office Equipment 660,000
Accumulated Depreciation - Equipment 180,000
Advances for Payroll -
Accounts Payable 90,000
Due to Officers and Employees -
Due to BIR -
Due to GSIS -
Due to Pag-IBIG -
Due to PhilHealth -
Accumulated Surplus (Deficit) 333,000
Tax on Delivery Vans and Trucks 50,000
Waterworks System Fees 240,000
Subsidy from NG 1,210,000
Salaries and Wages, Regular 380,000
PERA 20,000
Office Supplies Expense 130,000
Water Expenses 20,000
Electricity Expenses 60,000
Telephone Expenses 40,000
Janitorial Expenses 80,000
Security Expenses 100,000
Totals ₱2,753,000 ₱2,753,000
Depreciation Expenses
i Depreciation-Buildings & Other Structures ₱30,000
Accumulated Depreciation – Bldgs. ₱30,000
To recognize depreciation of buildings
ii Depreciation-Machinery and Equipment ₱20,000
Accumulated Depreciation – O.E. ₱20,000
To recognize depreciation of office equipment
Allowance for Impairment - AR
Impairment Loss – Loans and Receivables ₱5,000
Allowance for Impairment – A/R ₱5,000
To recognize loss allowance on accounts receivable
Reversion of Unused NCA
Subsidy from National Government ₱43,000
Cash-Modified Disbursement System (MDS), Regular ₱43,000
To recognize reversion of unused NCA
 Unadjusted Trial Balance
Accounts Debit Credit
Cash - Collecting Officers ₱30,000
Cash-Treasury/Agency Dep., Reg. 250,000
Cash-MDS, Regular 43,000
Accounts Receivable 120,000
Office Supplies Inventory 20,000
Buildings 800,000
Accumulated Depreciation - Buildings ₱650,000
Office Equipment 660,000
Accumulated Depreciation - Equipment 180,000
Accounts Payable 90,000
Accumulated Surplus (Deficit) 333,000
Tax on Delivery Vans and Trucks 50,000
Waterworks System Fees 240,000
Subsidy from NG 1,210,000
Salaries and Wages, Regular 380,000
PERA 20,000
Office Supplies Expense 130,000
Water Expenses 20,000
Electricity Expenses 60,000
Telephone Expenses 40,000
Janitorial Expenses 80,000
Security Expenses 100,000
Totals ₱2,753,000 ₱2,753,000
Adjustments:
Depreciation-Buildings & Other Structures
Depreciation-Machinery and Equipment
Impairment Loss – Loans and Receivables
Allowance for Impairment – A/R
 Statement of Financial
Adjustments Adjusted Trial Balance Position
Debit Credit Debit Credit Debit Credit
₱30,000 ₱30,000
250,000 250,000
₱43,000 - -
120,000 120,000
20,000 20,000
800,000 800,000
₱30,000 ₱680,000 ₱680,000
660,000 660,000
20,000 200,000 200,000
90,000 90,000
333,000 333,000
50,000
240,000
43,000 1,167,000
380,000
20,000
130,000
20,000
60,000
40,000
80,000
100,000

30,000 30,000
20,000 20,000
5,000 5,000
5,000 5,000 5,000
₱98,000 ₱98,000 ₱2,765,000 ₱2,765,000 ₱1,880,000 ₱1,308,000
572,000
₱1,880,000 ₱1,880,000
Statement of Financial
Performance Closing Entries Post-Closing Trial Balance
Debit Credit Debit Credit Debit Credit
₱30,000
₱250,000 -
-
120,000
20,000
800,000
₱680,000
660,000
200,000
90,000
₱250,000 572,000 ₱655,000
50,000 50,000
240,000 240,000
1,167,000 1,167,000
380,000 380,000
20,000 20,000
130,000 130,000
20,000 20,000
60,000 60,000
40,000 40,000
80,000 80,000
100,000 100,000

30,000 30,000
20,000 20,000
5,000 5,000
5,000
₱885,000 ₱1,457,000 ₱1,707,000 ₱1,707,000 ₱1,630,000 ₱1,630,000
572,000
₱1,457,000 ₱1,457,000
Accumulated Surplus/(Deficit) ₱250,000
Cash-Treasury/Agency Deposit, Regular ₱250,000
To recognize closing of cash deposit account
Tax on Delivery Vans and Trucks ₱50,000
Waterworks System Fees 240,000
Subsidy from National Government 1,167,000
Salaries and Wages, Regular ₱380,000
PERA 20,000
Office Supplies Expense 130,000
Water Expenses 20,000
Electricity Expenses 60,000
Telephone Expenses 40,000
Janitorial Expenses 80,000
Security Expenses 100,000
Depreciation-Bldgs. 30,000
Depreciation-Mac. & Equipt. 20,000
Impairment Loss – L/R 5,000
Revenue and Expense Summary 572,000
To recognize closing of income and expense accounts
Revenue and Expense Summary ₱572,000
Accumulated Surplus/(Deficit) ₱572,000
To recognize closing of revenue and expense summary
 Entity A
Statement of Financial Position
(Regular Agency Fund)
As of December 31,20x1

ASSETS Notes
Current Assets

Cash and Cash Equivalents 30,000

Receivables 1 115,000

Inventories 20,000

Total Current Assets 165,000

Noncurrent Assets
Property, Plant and Equipment 2 580,000

Total Noncurrent Assets 580,000

TOTAL ASSETS 745,000

Current Liabilities
Financial Liabilities 90,000
Total Current Liabilities 90,000

TOTAL LIABILITIES 90,000

TOTAL ASSETS less TOTAL LIABILITIES 655,000

NET ASSETS/EQUITY
Accumulated Surplus/(Deficit) 655,000

TOTAL NET ASSETS/EQUITY 655,000

 Entity A
Statement of Financial Performance
(Regular Agency Fund)
For the Year Ended December 31,20x1

REVENUE Notes
Tax Revenue 50,000
Service and Business Income 240,000
TOTAL REVENUE 290,000

Less: CURRENT OPERATING EXPENSES

Personnel Services 3 400,000
Maintenance and Other Operating Expenses 4 430,000
Non-cash Expenses 5 55,000
TOTAL CURRENT OPERATING EXPENSES 885,000

SURPLUS/(DEFICIT) FROM CURRENT OPERATIONS (595,000)

Net Financial Assistance/Subsidy 1,167,000

SURPLUS/(DEFICIT) FOR THE PERIOD 572,000

 ENTITY A
Notes to Financial Statements
December 31, 20X1

Note 1: Receivable
This account consists of the following:
Accounts Receivable ₱120,000
Allowance for Impairment - A/R (5,000)
Net ₱115,000

Note 2: Property, Plant and Equipment

This account consists of the following:
Buildings ₱800,000
Office Equipment 660,000
Total Cost ₱1,460,000

Accumulated Depreciation - Buildings ₱680,000

Accumulated Depreciation - Equipment 200,000
Total Accumulated Depreciation ₱880,000

Property, Plant and Equipment, Net ₱580,000

Note 3: Personnel Services

This account consists of the following:
Salaries and Wages, Regular ₱380,000
PERA 20,000
Personnel Services ₱400,000

Note 4: Maintenance and Other Operating Expenses

This account consists of the following:
Office Supplies Expense ₱130,000
Water Expenses 20,000
Electricity Expenses 60,000
Telephone Expenses 40,000
Janitorial Expenses 80,000
Security Expenses 100,000
Maintenance and Other Operating Expenses ₱430,000

Note 5: Non-cash Expenses

This account consists of the following:
Depreciation-Buildings & Other Structures ₱30,000
Depreciation-Machinery and Equipment 20,000
Impairment Loss – Loans and Receivables 5,000
Non-cash Expenses ₱55,000