PROBLEM #6

2021
Jan. 1 Cash
Journal Entries
100,000
Viesca, Capital 100,000 Sept. 1 Cash 100,000
Land 90,000
1 Service Vehicle 80,000 Gain on sale of land 10,000
Cash 80,000
Oct. 1 Supplies 20,000
Feb. 1 Cash 100,000 Accounts Payable 20,000
Notes payable 100,000
Nov. 1 Certificate of equipment 50,000
1 Prepaid Rent 24,000 Cash 50,000
Cash 24,000
Dec. 31 Accounts Receivable 250,000
Mar. 1 Viesca, Withdrawals 30,000 Service revenues 250,000
Cash 30,000
1 Cash 200,000
Apr. 1 Land 70,000 Accounts Receivable 200,000
Cash 70,000
1 Operating Expenses 80,000
May. 1 Accounts Payable 15,000 Accounts Payable 80,000
Cash 15,000
1 Salaries Expense 32,000
Apr. 1 Land 70,000 Salaries Payable 32,000
Cash 70,000
Operating Expenses
Required:
1. What is the total amount of revenues appearing on the income statement?
= P260,500

Solutions:
9/1/21 Gain from sale of land 10,000
11/1/21 Interest Income 500
12/31/21 Service Revenue 250,000
Total: P260,500
Required:
2. What is the amount of supplies expense that would appear on the income
statement?
= P19,000

Solution:
12/31/21 Supplies Expense 19,000
Required:
3. What is the amount of interest expense that would appear on the income
statement?
= P8,250

Solution:
Interest Expense 8,250
Interest Payable 8,250

100,000 x 9% x 11/12 = 8,250

Required:
4. What is the amount of rent expense that would appear on the income statement?
= P22,000

Solution:
2/1/21 Rent Expense 22,000

24,000 x 11/12 = 22,000

Required:
5. What is the amount of total expenses that would appear in the income statement?
= P185,000

Solution:
Salaries Expense 32,000
Supplies Expense 19,000
Operating Expense 80,000
Rent Expense 22,000
Depreciation Expense 24,000
Interest Expense 8,250
Total: P185,000
Required:
6. What is the amount of the gain from the sale of land appearing on the income
statement?
= P10,000

Solution:
9/1/21 Gain from sale of land 10,000

100,000 – 90,000 = 10,000

Required:
7. What is the amount of profit appearing on the income statement?
= P65,250

Solutions:
Total Revenue 260,500
Less: Expenses (185,000)
Total: P75,500
Required:
8. What is the amount of unearned revenue that would appear on the balance sheet?
= P42,000

Solution:
7/1/21 Unearned Revenue 42,000
Required:
9. What is the amount of interest payable that would appear on the balance sheet?
= P8,250

Solution:
Interest Expense 8,250
Interest Payable 8,250

100,000 x 9% x 11/12 = 8,250

Required:
10. What is the amount of total liabilities that would appear on the balance sheet?
= P301,250

Solutions:
Accounts Payable 119,000
Notes Payable 100,000
Unearned Service Revenues 42,000
Interest Payable 8,250
Salaries Payable 32,000
Total: P301,250
Required:
11. What is the amount of net cash flow from operating activities that would appear
on the statement of cash flows?
= P203,000

Solution:
Cash receipts from clients 242,000
Cash payments for rent (24,000)
Cash payments to accounts (15,000)
Total: P203,000
Required:
12. What is the amount of net cash flow from investing activities that would appear
on the statement of cash flows?
= -P100,000

Solution:
Cash receipts from sale of land 100,000
Cash payments to acquire service vehicle (80,000)
Cash payments to acquire land (70,000)
Cash payments for certificate of deposit (50,000)
Total: -P100,000
Required:
13. What is the amount of cash flow from financing activities that would appear on
the statement of cash flows?
= P170,000

Solution:
Cash receipts from unearned service revenues 100,000
Cash receipts from borrowings 100,000
Cash payments to withdrawals of owners (30,000)
Total: P170,000
Thank you for Listening!