Problem 4

You are auditing Perseverance Corp.’s various liability accounts. The following schedule of
liabilities was presented to you by the company’s accountant in relation to your audit:
Accounts payable P 500,000
Accrued expenses 40,000
Salaries payable 300,500
10%, Note payable – bank 2,000,000

The following information is from the company’s voucher register

Entry Voucher Description Amount Account Charged
Date Reference

12/15/22 22-00 Auto insurance, 12/1/22 to 12/1/2023 P24,000 Prepaid Insurance

12/16/22 22-01 Repair services; received 12/15/22 20,000 Repair &

Maintenance Expense

12/17/22 22-03 Supplies, shipped FOB destination; received 80,000 Supplies on hand
12/20/22

12/20/22 22-05 Merchandise, shipped FOB destination 65,000 Inventory

12/18/22; received 1/3/23

12/25/22 22-07 Utilities for December 2022 25,000 Utilities expense

12/28/22 22-09 Merchandise, shipped FOB destination 70,000 Inventory

12/26/22; received 1/5/23

1/4/22 22-11 Electricity Bill for December 30,000 Utilities expense

1/5/23 22-13 Legal services; received 50,000 Legal expense

1/8/23 22-15 Water Bill for December 25,700 Utilities expense

1/10/22 22-17 Payroll 12/21/22 to 1/7/23 (12 working days, 4 63,000 Salaries Expense
days in January)

Required: Prepare journal entries to adjust the accounts on December 31, 2022. Assuming that
the company follows FOB terms for recording inventory purchases.