ASSIGNMENT 7 (Dec.

14, 2021 GC)

Each problem is independent and not related to the other problems

A. ABM Company had the following sales transactions during the year.

- Sales on account made to a customer amounting ₱60,000. The related gross profit rate based
on sales is 33 1/3%.
- Incurred delivery expenses amounting to ₱5,000 as incentive of free delivery to regular customers.
- Receipt of damaged goods returned by a customer. A credit to accounts receivable worth
₱4,500 was made as a result of this transaction.

REQUIRED: Journalize the transactions using perpetual and periodic inventory systems.

B. The following date are given for ABM Company.

Purchases ₱102,000
Beginning inventory 6,000
Ending inventory 8,000
Sales 15,000 units sold at ₱10 each.

REQUIRED: Determine the gross profit.

C. Provided are the following account titles and their unadjusted balances as of the end of the
accounting period for ABM Company.
ASSETS LIABILITIES
Prepaid rent ₱50,000 Unearned revenue ₱25,000
Interest receivable 10,500 Salaries payable 0
Additional information:
- Interest was earned throughout the whole year. Interest revenue is calculated to be ₱4,500.
- The balance of the prepaid rent is sufficient for 4 years of rentals. No additional prepayments
has been made thoughout the whole year.
- Performance was made for the unearned revenue. 60% of the unadjusted balance has been
rendered ths year.
- Salaries unpaid to employees amounted to has been made thoughout ₱3,000.

REQUIRED: Journalize the adjusting entries for ABM Company.

D. ABM Company's Accounts Receivable (A/R) general ledger has a total debit balance of ₱72,250
as shown in the the following customers' subsidiary ledgers at the start of the month:
A/R - Alex ₱13,500 A/R - Denver ₱18,000
A/R - Banjo 6,750 A/R - Elmer 25,000
A/R - Conrad 9,000

- Sold goods to Denver. Total sales amounted to ₱6,000. Half of the sales were made on account
while the remaining were on cash.
 - Elmer paid in full its outstanding balance. Because of his prompt payment, he was given
5% discount.
- Banjo returned defective goods with selling price of ₱3,000. Upon receipt, ABM Company
immediately replaced the defective products which were received by Banjo.
- Alex absconded and defaulted on his payable to ABM Company. Because he cannot be
located, ABM Company wrote off the total receivable from Alex.
- Conrad, a valued customer of ABM Company purchased goods with total amount of
₱15,000 with terms, 5/20, 3/30, n/50.

REQUIRED: Post the transactions to the appropriate accounts receivable subsidiary ledger
to determine the correct year-end balance of each customer account. Also,
determine the total accounts receivable outstanding at year-end.
Journal entries are not required.

E. For each of the following plant, property and equipment, determine the numbered missing items.
Show necessary computations, when applicable.

MACHINERY 1 BUILDING MACHINERY 2

Date acquired Jan. 1, 2015 Dec. 1, 2016 Apr. 30, 2016
Acquisition cost 135,000 1,800,000 45,000
Estimated residual value 1) 180,000 5)
Estimated useful life 5 years 3) 3 years
Annual depreciation 24,000 4) 6)
Accumulated depreciation as of Dec. 31, 2016 2) 4,500 9,600
 LAND EQUIPMENT
Jun. 1, 2016 9)
600,000 64,600
100,000 2,200
50 years 10)
7) 7,800
8) 3,250