PAREF SOUTHRIDGE

High School Department

Fundamentals of ABM 1

NAME:
SECTION:

Instructions: Prepare the necessary adjusting entries for each independent transaction
provided below. Write your answers at the back portion of this paper.

1. GVG Company acquired a six-month insurance coverage for its properties on

September 1, 2019 for a total of P6,000. On December 31, 2017, the end of the
accounting period, part of the insurance paid already has expired. GVG co. debited an
asset for the acquisition of the insurance.
2. On January 15, 2017, ABC Company made P30,000 advanced collections from its
customers. In recording, the liability method was used. At the end of the year, 80% of the
unearned revenue has been rendered.
3. Mr. AlvaToo credited Commission Revenue at the time of receipt of P24,000 cash
advance from a client. 2/3 of the amount received will be earned next accounting period.
4. On May 1, Company A signed a one-year lease on a warehouse for P10,000 a month.
The landlord requires that Company A pays the annual amount P120,000 upfront at the
beginning of the year. At the end of the year, Company A would’ve used up a portion of
its lease agreement.
5. On May 15, XYZ Co. collected P48,000 cash in advance from a tenant for a one-year
rent.
6. Mr. Alva credited Unearned Commission Revenue at the time of receipt of P12,000 cash
advance from a client. 1/3 of the amount received will be earned next accounting period.
7. On June 30, ABC purchased 1,500 supplies. ABC uses the asset method in recording all
of its asset purchases. At the end of the month, only 60% of the supplies have been
used.
8. On January 2, we purchased P10,000 worth of supplies and debited supplies for it. At
the end, only P2,000 worth of supplies unused.
9. ABM collected P10,000 cash for services to be provided for the next few months. At the
end of the accounting period, P2,000 is still unearned. ABM credited Service Revenue
when it collected cash from its customer.
10. Nail purchased supplies for P8,000 and debited supplies expense for it. At the end, the
supplies on hand is P1,000.