Problem - Worksheet Preparation

The trial balance of Entity A (a government entity) at the beginning of the period is shown below:

Accounts Debit Credit

Cash – Collecting Officers 30,000
Accounts Receivable 80,000
Buildings 800,000
Accumulated Depreciation – 650,000
Buildings
Office Equipment 340,000
Accumulated Depreciation – 180,000
Equipment
Accounts Payable 60,000
Due to BIR 20,000
Due to GSIS 4,000
Due to Pag-IBIG 2,000
Due to PhilHealth 1,000
Accumulated Surplus (Deficit) 333,000
Totals 1,250,000 1,250,000
Notes:

- The accounts payable pertains to office supplies purchased that were already delivered but not
yet paid.
- “Not yet due and demandable obligation” for undelivered office equipment amount to P20,000

Transactions and events during the calendar year 2021:

a. Receipt of GAA amounting to P 1,200,000.

b. Receipt of allotment amounting to P 1,100,000.
c. Entity A enters into the following contracts:
- Employment contracts – P 420,000
- Purchase of office equipment – P 300,000
- Purchase of office supplies – P 150,000
- Contracts for various MOOEs – P 230,000
d. Receipt of Notice of Cash Allocation amounting to P 1,050,000.
e. Accrual of P 400,000 salaries upon approval of payroll, including granting of cash advance and
liquidation thereof. The breakdown of salaries is as follows:

Salaries and Wages 380,000

Personal Economic Relief Allowance 20,000
(PERA)
Gross Compensation 400,000

Withholding Tax 90,000

GSIS 30,000
Pag-IBIG 20,000

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 PhilHealth 10,000
Total Salary Deductions 150,000
f. Receipt of delivery of purchased office equipment worth P 320,000 on account (including not yet
due and demandable obligation from previous year).
g. Payment of P 320,000 accounts payable. Taxes withheld amount to P 20,000.
h. Receipt of delivery of purchased office supplies worth P 150,000 on account.
i. Payment of P 120,000 accounts payable. Taxes withheld amount to P 10,000.
j. Payment for the following expenses:

Water 20,000
Electricity 60,000
Telephone 40,000
Janitorial 80,000
Security 100,000
Total 300,000
Less: Withholding Taxes (20,000)
Net 280,000
k. Issued office supplies worth P 130,000 to end users.
l. Billed revenue for “Waterworks System Fees” amounting to P 240,000.
m. Collected P 200,000 from billed revenue and remitted total collection.
n. Collected P 50,000 unbilled tax revenue for “Tax on Delivery Vans and Trucks” through direct
deposit in Authorized Agent Banks.
o. Remitted all taxes withheld, including those from prior year to the BIR.
p. Remitted all contributions due to GSIS, PhilHealth and Pag-IBIG, including those from prior year.

Adjusting entries:

1. Depreciation expenses:
a. Buildings – P 30,000
b. Equipment – P 20,000
2. Allowance for impairment on accounts receivable of P 5,000.

Requirements:

1. Record the transactions and events above. If no journal entry is needed, state the registry or
other document where the transaction or event is recorded.
2. Post the transactions in the ledger (use T-account analyses).
3. Prepare worksheet showing unadjusted trial balance until post-closing trial balance.
4. Prepare adjusting entries.
5. Prepare closing entries.

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