Acctng 2 – Conceptual Framework & Accounting Standards

Activity #6A – Preparation of FS

Name: Hayna Marie D. Aguilar Program: BSA-1B Date: March 21, 2021

Exercise 1
_____A___ 1. Cash
_____G___ 2. Bonds payable (due in 8 years)
_____C___ 3. Machinery
_____J___ 4. Deficit
_____A___ 5. Unexpired insurance
_____D___ 6. Franchise (net)
_____B___ 7. Fund to retire preference shares
_____F___ 8. Current portion of mortgage payable
_____√___ 9. Accumulated depreciation
_____D___10. Copyrights (net)
_____B___11. Investment in held-to-maturity bonds
_____A __12. Allowance for doubtful accounts
_____B___13. Notes receivable (due in 3 years)
_____F___14. Property taxes payable
_____G___15. Deferred taxes payable
_____G___16. Premium on preference shares
_____G___17. Premium on bonds payable (due in 8 years)
_____A___18. Goods in process
_____I___19. Shares capital, P1 par
_____C___20. Land
_____I___21. Treasury stock (at cost)

Exercise 2
Indicate by letter how each of the following should be classified:

____D___1. Advertising expense

____F__2. Amortization of a patent held as an investment
____D___3. Cash dividend received on short-term investment
____B___4. Depreciation on plant that manufactures good for sale (prior to sale of the goods)
____B___5. Freight on sales
____H___6. Income tax effect of loss on sale of plant
____F___7. Income tax on gain on sale of short-term investment in securities
____D___8. Interest expense
____A___9. Interest revenue
____C___10. Loss on sale of patent
____E___11. Dividend revenue from investment
____D___12. Salary of company president
____A___13. Sales
____E___14. Sales returns
____A___15.Services sold

Exercise 3

___B__1. Payments for merchandise

___F__2. Payments for interest
___F__3. Payments for dividends
___D__4. Payments for plant and equipment
___D__5. Payments for bond payable retirements
___D__6. Payments for marketable securities
___B__7. Payments for employees
___B__8. Payments to governments
___G__9. Issuing a stock dividend
___A__10. Cash from customers
___E__11. Cash from issuing common share
___C__12. Cash from dividends
___A__13. Cash from sale of old building
___C__14. Cash from interest

Exercise 4
Identify the element or elements associated with the nine elements below.

a. Obligation to transfer resources arising from past transaction. - Liabilities

b. Increases ownership interest. – Income and Asset
c. Declares and pays cash dividends to owners. - Equity
d. Increases in net assets in a period from non-owner sources. - Income
e. Items characterized by service potential or future economic benefits. - Liabilities
f. Equals increase in assets less liabilities during the year, after adding distributions to
owners and subtracting investments by owners. – Asset and Equity
g. Residual interest in the assets of the enterprise after deducting its liabilities. – Equity
h. Increases assets during a period through sale of product. – Income
i. Decreases assets during the period by purchasing the company’s own shares. – Expense
and Equity