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  • QUIZ 7. Accounting Cycle For Service Business

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    Ariane Mae Bartolome
    20 views2 pages
    The document provides information about the transactions of Entity A during its first year of operations from January 1, 20x1 to December 31, 20x1. It includes: 1. Investments and assets acquired totaling ₱3,000,000 in cash and a ₱500,000 bank loan. 2. Service fees earned of ₱6,000,000 along with expenses totaling ₱2,320,000 for salaries, utilities, supplies and insurance. 3. Additional information is provided to make adjusting entries for depreciation, interest expense, prepaid insurance and supplies.

    Original Description:

    Original Title

    QUIZ 7. Accounting Cycle for Service Business

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    The document provides information about the transactions of Entity A during its first year of operations from January 1, 20x1 to December 31, 20x1. It includes: 1. Investments and assets acquired totaling ₱3,000,000 in cash and a ₱500,000 bank loan. 2. Service fees earned of ₱6,000,000 along with expenses totaling ₱2,320,000 for salaries, utilities, supplies and insurance. 3. Additional information is provided to make adjusting entries for depreciation, interest expense, prepaid insurance and supplies.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    20 views2 pages

    QUIZ 7. Accounting Cycle For Service Business

    Uploaded by

    Ariane Mae Bartolome
    The document provides information about the transactions of Entity A during its first year of operations from January 1, 20x1 to December 31, 20x1. It includes: 1. Investments and assets acquired totaling ₱3,000,000 in cash and a ₱500,000 bank loan. 2. Service fees earned of ₱6,000,000 along with expenses totaling ₱2,320,000 for salaries, utilities, supplies and insurance. 3. Additional information is provided to make adjusting entries for depreciation, interest expense, prepaid insurance and supplies.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    NAME: Date:

    Pr
    ofessor
    : Sect
    ion: Score:

    Act
    ivi
    tu7:WORKSHEETANDFI
    NANCI
    ALSTATEMENTS

    Enti
    tyAstar
    tedoper
    ati
    onsonJanuar
    y1,20x1.Asummar
    yoft
    het
    ransact
    ionsdur
    ingt
    hey
    eari
    s
    provi
    dedbel
    ow:

    1. Theowneri nv ested₱2, 000,


    000t othebusi ness.
    2. Acquiredequi pmentf or₱1,000,
    000cash.
    3. Obtai
    neda12%, one-year,bankloanof₱500, 000.
    4. Pai
    done- y
    eari nsur anceamount ingt o₱160, 000onSept ember30,
    20x1.Ent
    it
    yAusesthe“asset
    method”i nr ecor dingpr epayment s.
    5. Totalservicef eesear nedamount edto₱6, 000,000,one-
    thi
    rdofwhichwasoncashbasi
    s.
    6. Coll
    ected₱1, 800, 000account srecei vable.
    7. Totalsalariesexpensepai damount edt o₱1, 200,000.
    8. Totaluti
    lit
    iesexpensepai damount ed₱500, 000.
    9. Totalsuppl i
    espur chasedoncashbasi samount edto₱120,000.
    10.Totalowner ’
    sdr awi ngsamount edt o₱1, 400,000.

    Requi
    rements:
    a. Provi
    dethejournalentri
    esf ort hetr
    ansacti
    ons.
    b. Posttheent
    riestot heledgerusi ngT-account
    s.
    c. Preparet
    heunadj ustedtri
    al balanceusingawor ksheet.
    d. Preparet
    headjust i
    ngent r
    ies( seeaddit
    ionali
    nformationbel
    ow)
    .

    I
    nformati
    onforadjust
    ingentri
    es:
    i
    . Theequi pmentwasacqui redonJanuar y1,20x1andwasest i
    matedtohaveausefull
    i
    feof
    10years.
    ii. Thel oanwasobt ai
    nedonJul y1,20x1.Pri
    nci
    pal andint
    erestar
    edueatmaturi
    tydat
    e.
    i
    ii
    . Theone- yeari
    nsurancecoverstheperiodOctober1,20x1toSeptember30,
    20x2.
    i
    v. Unusedsuppl i
    esatt heendofthey earamountedto₱40,000.

    e. Completet
    heworksheet.
    f. Prepar
    ethecl
    osi
    ngent r
    ies.
    g. Prepar
    ethebal
    ancesheetandi
    ncomest
    atement
    .

    “Agai
    n,It
    elly
    outhatift
    woofy ouonear
    thagr
    eeaboutanythi
    ngyouaskf
    or,i
    twillbedonefory
    ou
    bymyFatherinheaven.Forwher
    etwoorthr
    eecomet oget
    herinmyname,ther
    eam Iwi t
    hthem.”
    (
    Mat
    thew18:
    19-
    20)

    -END-

    Requi
    rement(
    d):Adj
    ust
    ingent
    ri
    es

    (
    i) Depreci
    ati
    onexpense(1M ÷10y
    rs.
    ) 100,
    000
    Accumulat
    eddepreci
    ati
    on 100,
    000
    t
    orecor
    dthedepr
    eci
    ati
    onexpensef
    ort
    hey
    ear
    (
    ii
    ) I
    nter
    estexpense(500Kx12%x6/
    12) 30,
    000
    I
    nter
    estpayable 30,
    000
    t
    oaccr
    uei
    nter
    estexpense
    (
    ii
    i) I
    nsur
    anceexpense(
    160Kx3/
    12) 40,
    000

    1
    Pr
    epai
    dinsur
    ance 40,
    000
    t
    orecogni
    zei
    nsur
    anceexpense
    (
    iv) Suppl
    i
    esexpense(120K–40K) 80,
    000
    Pr
    epai
    dsuppli
    es 80,
    000
    t
    orecogni
    zesuppl
    i
    esexpense

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