College of Business and Accountancy

AC101

From the following given data, prepare adjusting journal entries for the year ended December 31,
2019:

1. Of the P 4,800 office supplies inventory, P 1,600 cost of the supplies were on hand.
Asset account was debited upon purchase.
Office Supplies Expense 3,200
Office Supplies 3,200
2. Paid insurance premium on March 1, 2019 amounting to P 9,600 for a 2-year policy
contract. Expense account was debited upon payment.
Insurance Expense 4,000
Prepaid Insurance 4,000
3. Received cash of P 144,000 for a 3-year advance rental to commence September 20,
2019. Unearned rental account was credited upon receipt of cash.
Unearned Rent Revenue 16,000
Rent Revenue 16,000
4. Salaries from the period December 27, 2019 to January 3, 2020 at P450/day were unpaid.
Salaries Expense 3,600
Salaries Payable 3,600
5. Of the recorded interest income account of P10,000, P 6,000 was unearned at the end of
the period.
Interest Receivable 4,000
Interest Revenue 4,000
6. Purchase of supplies for P 6,000. At the end of the year, P 2,000 cost of the supplies
were actually used. Expense method used in payment of supplies.
Supplies Expense 4,000
Supplies 4,000
7. A P96,000 12%, 120-day note was received from a client dated November 1, 2019. The
interest was not yet collected at the end of the accounting period.
Interest Receivable 2880
Interest Revenue 2880

8. Before adjustment, the balance of the laundry supplies inventory was P70,000. Physical
count of supplies inventory was P 30,000.
Laundry Supplies Expense 40,000
Laundry supplies 40,000
9. An office equipment was acquired on May 31, 2019 for P 300,000. The office equipment
has an estimated life of 5 years without salvage value.
Depreciation Expense - Office Equipment 60,000
Accumulated Depreciation - Office Equipment 60,000
10. The 1% of the outstanding account receivable of P500,000 was proved to be
uncollectible.
Allowance for Uncollectible Accounts 5,000
Accounts Receivable 5,000