PRACTICE SET A

MG TRAVEL SERVICES COMPANY

Data for Adjustments
April 30, 2021

a. On April 2, 2020, bank borrowing was approved with a note of promise to pay, P100,000 payable in one year with
12% interest upon repayment of the principal amount. Journalize the interest accrued for the note payable for
one month.
b. Depreciation of automobile, ten-year useful life, P100,000 estimated residual value per vehicle.
c. Depreciation of office equipment, five-year useful life, 10% estimated residual value per set.
d. Depreciation of furniture and fixtures, five-year useful life, no residual value.
e. P35,000 worth of office supplies were used.
f. On April 7, 2020, paid rent in advance covering 6 months’ equivalent rent, P150,000. One month of rent was
expired.
g. Earned the Japan travel service in full on April 30.
Destination Japan, Japan, Sagot Sa Kasiyahan 5 days 4 nights
Number of persons 10 persons
Price per person P63,800
Payment terms Advanced payment

As the accountant of MG TRAVEL SERVICES COMPANY, do the following for April 2020:
1. Journalize the adjusting journal entries.
2. Prepare the adjusted trial balance.

PRACTICE SET B

The XYZ Realty operates with an annual accounting period that ends on December 31. The trial balance of the company
at the end of the current year follows:

Cash 1,300,000
Accounts Receivable 550,000
Prepaid Insurance 50,000
Prepaid Advertising Expense 100,000
Office Equipment 750,000
Accumulated Depreciation – Office Equipment 150,000
Automobile 1,300,000
Accumulated Depreciation – Automobile 260,000
Accounts Payable 110,000
Unearned Management Fees 120,000
Primo, Capital 840,000
Primo, Drawing 350,000
Management Fees Earned 3,600,000
Office Salaries Expense 450,000
Rent Expense 150,000
Telephone Expense 30,000
Utility Expense 50,000
5,080,000 5,080,000

Data for adjustments:

a. Expired insurance during the year amounted to P30,000.
b. Depreciation expense for the year: office equipment – P75,000; automobile – P260,000.
c. The balance of unearned management fees represents advance payments for six months starting September 1,
2010.
d. Prepaid advertising expense represents a five-month advertising beginning October 1, 2010.

Required:
a. Prepare adjusting journal entries.
b. Post the adjusting journal entries to ledger.
c. Prepare the adjusted trial balance as of December 31, 2010.