Accounting Book_1 Lupisan& Baysa Answer key PDF

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####### CHAPTER 1Review of the Accounting ProcessE 1- Unearned Revenue 11. Accrued Expense Prepaid Expense 12. Accrued Revenue Accrued Expense 13. Prepaid Expense Accrued Expense 14. Unearned Revenue Prepaid Expense 15. Accrued Expense Unearned Revenue Accrued Revenue Accrued Expense Unearned Revenu...

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CHAPTER 1 Review of the Accounting Process E 1-1 1. Unearned Revenue 2. Prepaid Expense 3. Accrued Expense 4. Accrued Expense 5. Prepaid Expense 6. Unearned Revenue 7. Accrued Revenue 8. Accrued Expense 9. Unearned Revenue 10. Accrued revenue

11. 12. 13. 14. 15.

Accrued Expense Accrued Revenue Prepaid Expense Unearned Revenue Accrued Expense

E 1-2 1. Allowance for Uncollectible Accounts 2. Rent Expense 3. Office Supplies Expense 4. Salaries Payable 5. Prepaid Insurance 6. Interest Revenue 7. Interest Payable 8. Unearned Rent 9. Accumulated Depreciation 10. Income Summary E 1-3 1. a.

Unearned Rent Rent Revenue P300,000 x 1/12 = P25,000

25,000 25,000

No reversing entry b.

Insurance Expense Prepaid Insurance

75,000 75,000

P90,000 x 10/12 = P75,000 No reversing entry 2.

a.

b.

E 1-4 1. a.

b.

c.

d.

e.

Rent Revenue Unearned Rent P300,000 x 11/12 = P275,000

275,000

Unearned Rent Rent Revenue

275,000

275,000

275,000

Prepaid Insurance Insurance Expense P90,000 x 2/12 = P15,000

15,000

Insurance Expense Prepaid Insurance

15,000

Interest Expense Interest Payable P2,000,000 x 6% x 4/12 = P40,000

40,000

Prepaid Insurance Insurance Expense P72,000 x 25/36 = P50,000

50,000

Prepaid Rent Rent Expense P360,000 x 11/12 = P330,000 Uncollectible Accounts Expense Allowance for Uncollectible Accounts Salary Expense Salaries Payable

15,000

15,000

40,000

50,000

330,000 330,000

60,000 60,000 180,000 180,000

P450,000 x 2/5 = P180,000 f.

g.

h.

i.

2.

Depreciation Expense – Office Equipment Accumulated Depreciation – Office Equipment P480,000  5 = P96,000 + P120,000  5 x 5/12 = P10,000 Supplies on Hand Supplies Expense

106,000 106,000

4,500 4,500

Rental Revenue Unearned Rent P180,000 x 4/6 = P120,000

120,000

Income Summary Merchandise Inventory

180,000

Merchandise Inventory Income Summary

220,000

120,000

180,000

220,000

a, b, c, e, g & h

E 1-5 1. a.

Income Summary Inventory, beg. Inventory, end Income Summary

b.

Inventory, end Purchases Returns Cost of Goods Sold Purchases Freight-in Inventory, beg.

50,000 50,000 140,000 140,000 140,000 20,000 2,000,000 2,100,000 10,000 50,000

2.

Approach 2 a. Sales Interest Revenue Income Summary b.

c.

d.

5,000,000 25,000 5,025,000

Income Summary Inventory, end Purchases Returns and Allowances Inventory, beg. Purchases Freight-In Administrative Expense Sales Returns Sales Discounts Selling Expenses Interest Expense

2,980,000 140,000 20,000

Income Summary Castro, Capital

2,045,000

50,000 2,100,000 10,000 500,000 5,000 10,000 450,000 15,000

2,0450,000

Castro, Capital Castro, Drawing

500,000 500,000

E 1-6 1. 2. 3. 4. 5.

A A A A B

6. 7. 8. 9. 10.

B or C A C A B

11. 12. 13. 14. 15.

B A A A C

16. 17. 18. 19. 20.

B A C B B

P 1-1 1.

a.

Insurance Expense

12,000

Prepaid Insurance P48,000 x 3/12 = P12,000

12,000

No reversing entry b

c.

d.

Rent Revenue Unearned Rent P270,000 x 7/9 = P210,000

210,000

Unearned Rent Rent Revenue

210,000

210,000

210,000

Supplies Supplies Expense P12,000 – P3,000 = P9,000

4,500

Supplies Expense Supplies

4,500

Depreciation Expense Accumulated Depreciation P350,000/5 x 9/12 = P52,500

4,500

4,500 52,500 52,500

no reversing entry e.

Uncollectible Accounts Expense Allowance for Uncollectible Accounts

8,000 8,000

no reversing entry f.

Interest Receivable Interest Revenue P150,000 x 12% x 30/360 = P1,500

1,500

Interest Revenue Interest Receivable

1,500

1,500

1,500

g.

h.

Salary Expense Salaries Payable

155,000

Salaries Payable Salary Expense

155,000

Merchandise Inventory Income Summary

122,000

Income Summary Merchandise Inventory

120,000

Merchandise Inventory Income Summary

150,000

155,000

155,000

122,000

P 1-2 a.

b.

c.

d.

e.

120,000 150,000

Sales Purchase Returns & Allowance Income Summary

5,700,000 90,000

Income Summary Sales Returns and Allowance Purchases Freight-in Supplies Expense Insurance Expense Salary Expense Depreciation Expense Office Expense

4,029,000

Income Summary Olson, Capital

1,791,000

5,790,000

150,000 3,000,000 120,000 18,000 27,000 540,000 24,000 150,000

1,791,000

f.

Olson, Capital Olson, Drawing

180,000 180,000

P 1-3 Adjusting Entry a. b. c. d. e. f. g. P 1-4 1. a.

b.

c.

d.

Revenue NE + NE NE NE + NE

Income Statement Expenses Net Income + NE + + + + NE + + -

Commissions Receivable Commissions Income Rent Expense Prepaid Rent Office Supplies Expense Office Supplies Depreciation Expense Accumulated Depreciation

Statement of Financial Position Assets Liabilities Capital NE + + NE + NE NE NE NE + NE + -

7,200 7,200 36,000 36,000 6,600 6,600

2,400 2,400

e.

f. g.

Salaries Expense Salaries Payable

4,800

Unearned Commissions Commissions Income

8,000

Interest Expense

1,200

4,800

8,000

Interest Payable 2.

a.

b.

c. d.

3.

Income Summary Salaries Expense Rent Expense Office Supplies Expense Depreciation Expense – Office Equipment Interest Expense

111,000

Commissions Income Income Summary

175,200

3.

4.

64,800 36,000 6,600 2,400 1,200

175,200

Income Summary Valdez, Capital

64,200

Valdez, Capital Valdez, Drawing

32,000

64,200

32,000

Net Income = P64,200

P 1-5 1. Insurance Expense Prepaid Insurance 2.

1,200

Depreciation Expense – Office Equipment Depreciation Expense – Automobile Accumulated Depreciation – Office Equipment Accumulated Depreciation - Automobile

30,000 30,000 75,000 260,000 75,000 260,000

Unearned Management Fees Management Fees Earned P120,000 x 4/6 = P80,000

80,000

Prepaid Advertising Advertising Expense P100,000 x 2/5 = P40,000

40,000

Multiple Choice

80,000

40,000

1. 2. 3.

C D C

4. 5. 6.

TM 1 1. 2. 3. 4. 5.

T T T T F

6. 7. 8. 9. 10.

F F F T T

11. 12. 13. 14. 15.

F F F F T

16. 17. 18. 19. 20.

F T F T T

TM 2 1. 2. 3. 4. 5.

D C C B A

6. 7. 8. 9. 10.

B C C B B

11. 12. 13. 14. 15.

B A D C C

16. 17. 18. 19. 20.

B D B B C

TM 3 1. 2. 3. 4. 5.

B D D B D

6. 7. 8. 9. 10.

D C C A A

11. 12. 13. 14. 15.

B C A C C

16. 17. 18. 19. 20.

A D A C D

TM4 1. 2. 3. 4.

N Y N N

TM 5 1. 2. 3. 4. 5.

O B H N K

5. 6. 7. 8.

C B D

N N Y Y

6. 7. 8. 9. 10.

7. 8. 9.

9. 10. 11. 12.

F E A I X

N Y N N

11. 12. 13. 14. 15.

D C A

10. 11. 12.

13. 14. 15. 16.

P T M G Z

Y Y Y Y

16. 17. 18. 19. 20.

13. B 14. A 15. C

21. T 22. T 23. T 24. F 25. F

21. 22. 23. 24. 25. 17. 18. 19. 20.

Q V W S D

B A C

B C A D B Y Y Y Y

CHAPTER 2 Nature and Formation of a Partnership E 2-1 a. Cash Alonzo, Capital

400,000

b.

Accounts Receivable Allowance for Uncollectible Accounts Alonzo, Capital

500,000

Inventories Alonzo, Capital P300,000 x 80% = P240,000

240,000

Equipment Alonzo, Capital P900,000 x 6/10 = P540,000 E 2-2 1. Cash Accounts Receivable Merchandise Inventory Equipment Allowance for Uncollectible Accounts Accounts Payable Notes Payable Aquino, Capital

540,000

c.

d.

Cash Asuncion, Capital P820,000 X 3/2 = P1,230,000 X 1/3 = P410,000 2.

Allowance for Uncollectible Accounts Aquino, Capital

400,000

50,000 450,000

240,000

540,000

450,000 180,000 270,000 125,000 10,000 105,000 90,000 820,000 410,000 410,000

5,000 5,000

Merchandise Inventory Aquino, Capital

30,000

Accumulated Depreciation Aquino, Capital Equipment

30,000 25,000

Allowance for Uncollectible Accounts Accounts Payable Notes Payable Cash Accounts Receivable Merchandise Inventory Equipment E 2-3 1. a. Amores, Capital Allowance for Uncollectible Accounts b.

c. c.

d.

2.

a.

Merchandise Inventory Amores, Capital Amores, Capital Prepaid Expenses Accounts Payable

30,000

55,000 10,000 105,000 90,000 450,000 180,000 270,000 125,000 25,000 25,000 160,000 160,000 30,000 72,000 102,000

Cash 1,717,000 Andrada, Capital (P1,612,000 – P25,000 + P160,000 + P30,000 = P1,717,000 Cash Accounts Receivable Merchandise Inventory Prepaid Expenses Allowance for Uncollectible Accounts Accounts Payable Amores, Capital

1,717,000

208,000 460,000 1,600,000 72,000 25,000 598,000 1,717,000

b.

Cash Andrada, Capital

1,717,000 1,717,000 Amores and Andrada Company Statement of Financial Position January 1, 2014 Assets

Cash Accounts Receivable Less Allowance for Uncollectible Accounts Merchandise Inventory Prepaid Expenses Total Assets

P1,925,000 P460,000 25,000

435,000 1,600,000 72,000 P4,032,000

Liabilities and Capital Accounts Payable Amores, Capital Andrada, Capital Total Liabilities and Capital E 2-4 1. Cash Land Building Mortgage Payable Aguirre, Capital Aranas, Capital 2. Cash Land Building Mortgage Payable Aguirre, Capital Aranas, Capital

P598,000 P1,717,000 1,717,000

3,434,000 P4,032,000

1,000,000 800,000 1,900,000 1,500,000 1,000,000 1,200,000 1,000,000 800,000 1,900,000 1,500,000 1,100,000 1,100,000

P 2-1 1. a. b. c.

d.

e.

f. g.

Merchandise, Inventory Acosta, Capital

50,000

Acosta, Capital Allowance for Uncollectible Accounts

75,000

50,000 75,000

Interest Receivable Acosta, Capital P375,000 x 6% x 2/12 = P3,750

3,750 3,750

Acosta, Capital Interest Payable P750,000 x 10% x 3/12 = P18,750

18,750 18,750

Accumulated Depreciation Acosta, Capital Furniture and Fixtures

450,000 150,000 600,000

Office Supplies Acosta, Capital

15,000

Cash Aguas, Capital

1,262,500

15,000 1,262,500

P2,700,000 + 50,000 – 75,000 + 3,750 – 18,750 -150,000 + 15,000 = 2,525,000/2 = 1,262,500

Acosta and Aguas Statement of Financial Position December 1, 2014 Assets Cash Notes Receivable Accounts Receivable Less Allowance For Uncollectible Accounts Interest Receivable Merchandise Inventory Office Supplies

P 1,862,500 375,000 P 2,250,000 225,000

2,025,000 3,750 650,000 15,000

Furniture And Fixtures Total Assets Notes Payable Accounts Payable Interest Payable Total Liabilities Acosta, Capital Aguas, Capital Total Capital Total Liabilities and Capital P 2-2 1. a.

b.

c.

2.

a.

b.

c.

April, Capital Allowance for Doubtful Accounts April, Capital Accrued Expenses Accumulated Depreciation Accounts Payable Accrued Expenses Allowance for Doubtful Accounts April, Capital Cash Accounts Receivable Merchandise Inventory Equipment Merchandise Inventory Arias, Capital Arias, Capital Allowance for Doubtful Accounts Cash Arias, Capital

1,200,000 P 6,131,250 Liabilities and Capital P 750,000 1,575,000 18,750 P 2,343,750 P 2,525,000 1,263,500 3,787,500 P 6,131,250

9,000 9,000 21,000 21,000 112,500 345,000 21,000 9,000 800,000 187,500 450,000 400,000 250,000 50,000 50,000 7,500 7,500 357,500 357,500

P800,000  40% x 60% = P1,200,000 - (800,000 + 50,000 – 7,500) = 357,500 d. e.

Accumulated Depreciation Equipment Cash Accounts Receivable Merchandise Inventory Equipment Allowance for Doubtful Accounts Accounts Payable Accrued Expenses April, Capital

37,500 37,500 187,500 450,000 400,000 137,500 9,000 345,000 21,000 800,000 April and Arias Statement of Financial Position October 1, 2014 Assets

Cash Accounts Receivable Less Allowance For Doubtful Accounts Merchandise Inventory Equipment Total Assets Accounts Payable Accrued Expenses Total Liabilities April, Capital Arias, Capital Total Capital Total Liabilities and Capital P 2-3 1. Cash Accounts Receivable Merchandise Inventory

P 657,500 P 825,000 16,500

808,500 750,000 400,000 P2,616,000

Liabilities and Capital P 595,000 21,000 P 616,000 P 800,000 1,200,000 2,000,000 P2,616,000

70,000 490,000 700,000

2.

Equipment Allowance for Doubtful Accounts Accounts Payable Albano, Capital

70,000

Cash Accounts Receivable Merchandise Inventory Equipment Furniture and Fixtures Allowance for Doubtful Accounts Accounts Payable Abada, Capital

50,000 460,000 950,000 120,000 90,000

50,000 360,000 920,000

40,000 540,000 1,090,000

Abada, Capital Allowance for Uncollectible Accounts

10,000

Merchandise Inventory Abada, Capital

50,000

Accumulated Depreciation Abada, Capital Equipment

36,000 24,000

Accumulated Depreciation Abada, Capital Furniture and Fixtures

24,000 6,000

Cash Accounts Receivable Merchandise Inventory Equipment Allowance for Uncollectible Accounts Accounts Payable Albano, Capital P 2-4 1. Abante, Capital

10,000

50,000

60,000

30,000 70,000 490,000 700,000 70,000 50,000 360,000 920,000 150,000

Allowance for Doubtful Accounts

2.

150,000

Abante, Capital Merchandise Inventory

200,000

Accumulated Depreciation Abante, Capital Furniture and Equipment

210,000 240,000

Goodwil Abante, Capital P2,000,000 – (P2,700,000 -150,000 – 200,000 – 240,000 – 360,000 = P1,750,000) = P250,000

250,000

200,000

450,000

250,000

Cash Arevalo, Capital

3,000,000

Land Mortgage Payable Almonte, Capital

1,800,000

Accounts Receivable Merchandise Inventory Furniture and Equipment Goodwill Allowance for Uncollectible Accounts Accounts Payable Abante, Capital

840,000 1,000,000 600,000 250,000

Cash Arevalo, Capital

3,000,000

Land Mortgage Payable Almonte, Capital

1,800,000

3,000,000

300,000 1,500,000

240,000 450,000 2,000,000

3,000,000

300,000 1,500,000

P 2-5 1. a.

b.

Cash Merchandise Inventory Abueva, Capital

518,000 1,152,000

Accounts Receivable Merchandise Inventory Office Equipment Goodwill Allowance for Doubtful Accounts Accounts Payable Alano, Capital

1,792,000 253,000 206,000 145,000

1,670,000

150,000 576,000 1,670,000 Abueva and Alano Partnership Statement of Financial Position June 1, 2014 Assets

Cash Accounts Receivable Less Allowance For Doubtful Accounts Merchandise Inventory Office Equipment Goodwill Total Assets

P 518,000 P 1,792,000 150,000

1,642,000 1,405,000 206,000 145,000 P 3,916,000

Liabilities and Capital Accounts Payable Abueva, Capital Alano, Capital Total Liabilities and Capital P 2-6 1. 2. 3.

P1,080,000 P1,100,000 P1,320,000

Multiple Choice 1. B

P 576,000 P 1,670,000 1,670,000

3,340,000 P 3,916,000

P80,000 + P440,000 + P200,000 + P600,000 – P240,000 = P1,080,000 (P1,080,000 + P1,120,000) / 2 = P1,100,000 P2,200,000 x 60% = P1,320,000

2. 3. 4. 5. 6. 7.

A B D D B C

8. 9. 10.

C B D

11. 12. 13. 14.

A B C B

15. 16. 17. 18. 19. 20. TM 6 1. 2. 3. 4. TM 7 1. 2. 3. 4. 5. 6. 7. 8.

B B C C B D F F F T

(P80,000 + P340,000 + P900,000) – P300,000 = P1,020,000 Aster = P489,000 – P7,500 = P481,500 Amie = P273,000 - P9,000 – P5,400 = P258,600 P9,000 + (P189,000 – P12,000) + P460,000 + P140,000 = P786,000 x 2 = P1,572,000 (P600,000 x 1/2) – (P220,000 – P30,000) = P110,000 Total partnership capital + Total partnership liabilities = Total partnership assets P600,000 + (P30,000 + P20,000) = P650,000 P600,000/2 = P300,000- (200,000-20,000)= P120,000. P90,000 + P30,000 + P130,000 – P100,000 = P150,000 P240,000 + (P150,000 + P 100,000 = P250,000) = P490,000 (P240,000 + P150,000) x 60% = P234,000 (P240,000 + P150,000) x 40% = P156,000- P150,000 =P6,000 P600,000 + P120,000 = P720,000 P720,000 + P1,200,000/2 = P960,000 P960,000 – P720,000 = P240,000 P720,000 + P1,200,000 = P1,920,000 x 75% = P1,440,000 5. 6. 7. 8.

T T F T

9. 10. 11. 12.

Limited partnership Industry, skill, talent or service Capitalist industrial partner Mutual agency De facto partnership Memorandum entry Nontrading partnership Partnership

T T F T

13. 14. 15. 16. 9. 10. 11. 12. 13. 14. 15. 16.

T T F T

17. 18. 19. 20.

F T T T

Agreed value Nominal partner Articles of Co-Partnership Secret partner Securities and Exchange Commission Limited or LTD. Limited partner Loan Payable

17. 18. 19. 20. TM 8 1. A 2. A 3. D 4. B

5. C 6. D 7. D 8. B

TM 9 Problem A 1. Cash Land Building Furniture and Fixtures Accounts Payable Alvis, Capital Ancheta, Capital 2.

3.

9. 10. 11. 12.