Activity 1:Cash to Accrual Basis of Accounting/Capital Maintenance Approach

Instructions:
1. Using the format and formulas provided in our module
Compute for the :
a. prepaid insurance, beg
b. Sales revenue
c. depreciation expense
d. collection of rent
e. Profit or loss (Capital Maintenance Approach)

Members:
Leader:
Santos, Czarina Julienne Z. - Present

Members:
Berondo, Farhana Aliezah S. - Present
Coca, Nicole B. - Present
Ronato, Joy Marie G. - Present
ntenance Approach

Honor Pledge for Assignments

“I accept responsibility for my role in ensuring the integrity of the work submitted by the group in which
s
bmitted by the group in which I participated.”
PREPAID INSURANCE, BEG. 2,090.00

Given:
Insurance expense for the period
Insurance premiums paid during the period
Prepaid Insurance , end

Solution:

Prepaid Insurance , end

Insurance expense for the period
Insurance premiums paid during the period
Prepaid Insurance , beg.
 19,450.00
24,100.00
6,740.00

6,740.00
19,450.00
(24,100.00)
2,090.00
SALES REVENUE 715,000.00

Given:
Total Cash Disbursement for the period
All Cash Receipts were from customers
Accounts Receivable, beg.
Accounts Receivable, end.
Accounts written off during the period
Cash, beg.
Cash, end

Solution:

Total Cash Disbursement for the period

Cash, end.
Cash, beg.
Collections
Accounts written off during the period
Accounts Receivable, end.
Accounts Receivable, beg.
Sales Revenue
 580,000.00

600,000.00
580,000.00
15,000.00
350,000.00
490,000.00

580,000.00
490,000.00
(350,000.00)
720,000.00
15,000.00
580,000.00
(600,000.00)
715,000.00
DEPRECIATION EXPENSE 22,000.00

Given:
Equipment original cost
sold for P 18,000 at a loss of P 2,000 during the period
Equipment (net), beg.
Cost of equipment acquired during the year
Equipment (net), end

Solution:

Equipment (net), beg.

Equipment (net), end
Increase
Cost of equipment acquired during the year
Carrying Value of Asset disposed
Selling Price 18,000.00
Loss 2,000.00
Carrying Value 20,000.00
Depreciation expense
 30,000.00

105,000.00
40,000.00
103,000.00

105,000.00
-103,000.00
2,000.00
40,000.00

-20,000.00
22,000.00
COLLECTIONS OF RENT 242,000.00

Given:
Rent Collected in advance, beg.
Rent Collected in advance, end.
Rent earned but not yet collected, beg.
Rent earned but not yet collected, end.
Rent earned during the period

Solution:

Rent earned during the period

Add:
Rent Collected in advance, end.
Rent earned but not yet collected, beg.
Less:
Rent Collected in advance, beg.
Rent earned but not yet collected, end.
Total Collections for rent
 40,000.00
50,000.00
27,000.00
15,000.00
220,000.00

220,000.00

50,000.00
27,000.00 77,000.00

(40,000.00)
(15,000.00) (55,000.00)
242,000.00
PROFIT OR LOSS (Capital Maintenance Approach)

Given:

Accrued salaries
Cash
Accounts Payable
Office Equipment (net)
Prepaid Insurance
Accounts receivable
Unearned Income

Additional Investments of Fern 280,000.00

Withdrawals of Fern 480,000.00

Solution:

Cash
Accounts Receivable
Prepaid Rent
Equipment (net)
Total Assets

Accounts Payable
Accrued Salaries

Total Liabilities
Total Equity

Equity, End 1,884,000.00

Less: Equity, Beg. 1,564,000.00
increase (decrease) 320,000.00
Add: Withdrawal by owners 480,000.00
Less: Additional Investment -280,000.00
Profit (Loss) 520,000.00
 520,000.00

Year end Year beg.

104,000.00 -
432,000.00 240,000.00
448,000.00 376,000.00
1,200,000.00 1,080,000.00
80,000.00 140,000.00
724,000.00 480,000.00
- -

Year end Year beg.

432,000.00 240,000.00
724,000.00 480,000.00
80,000.00 140,000.00
1,200,000.00 1,080,000.00
2,436,000.00 1,940,000.00

448,000.00 376,000.00
104,000.00 -
- -
552,000.00 376,000.00
1,884,000.00 1,564,000.00