BACC 05

BASIC FINANCE
SOLVING PROBLEMS FOR ADJUSTING ENTRIES

1. A computer, printer, and a copier were purchased for a total price of P250,000 on
August 1, 2022. The company estimated that the equipment purchased will be
effectively used for 5 years and after that equipment can be sold for P20,000.
a. How much is the annual depreciation of the equipment?
b. How much depreciation will be recorded in year 2022, assuming the
company is maintaining a calendar period?
c. What percent of the cost of the equipment is the annual depreciation?
d. How much is the depreciation for year 2023?
e. Prepare the adjusting journal entry for years 2022 and 2023.

2. Office Chairs and tables were purchased from a furniture shop amounting to
P350,000 on December 1, 2022. The company estimated that the life of the pieces
of furniture will be 10 years and can be sold for a scrap of P30,000
a. What is the adjusting journal entry at the end of the period of December
31, 2022?
b. What is the book value of the pieces of furniture at the end of the calendar
year of 2024?
3. A company purchased an air conditioner at SN Appliance Center for P45,000 and
paid an installation fee of P6,000 with a delivery charge of P1,000. The air
conditioner has an estimated life span of 5 years with a residual value of P15,000.
a. What is the depreciable cost of the air conditioner?
b. How much is the annual depreciation?