Adjusting entries notes PDF

Preview

Summary

####### TOPIC: ADJUSTING ENTRIESReynaldo Gulane CleanersTrial BalanceMay 31, 2013The following Informaion Occurred;A. A review of Insurance policies showed that P6,800 is unexpired at the year end.Soluion; Use the Asset Method of Adjustment na kung saan idedetermine nain kung magkano ang na expired ...

Description

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino A. A review of Insurance policies showed that P6,800 is unexpired at the year end.

TOPIC: ADJUSTING ENTRIES

Reynaldo Gulane Cleaners Trial Balance May 31, 2013

Account Titles Cash Accounts Receivable Prepaid Insurance Cleaning Supplies Land Building Acc. Depreciation-Building Accounts Payable Unearned Cleaning Revenues Mortgage Payable Gulane, Capital Gulane, Withdrawals Cleaning Revenues

Debit P 117,880 264,940 34,000 73,740 180,000 1,850,000

Credit

P 456,000 204,000 16,000 1,100,000 565,000

Solution; Use the Asset Method of Adjustment na kung saan idedetermine natin kung magkano ang na expired sa ating asset na Prepaid Insurance, sabi sa adjustment problem P6,800 ang hindi pa na expired sa ating insurance tingan muna natin ang ating Trial Balance it shows that 34,000 yung total cost nung Prepaid Insurance, Original Cost of insurance 34000 Less: Unexpired Portion 6,800 Total Expired Portion 27,200 Adjustment Entry: Insurance Expense 27,200 Prepaid Insurance 27,200 (Decrease in OE- Insurance expense recorded in debit, Decrease in Asset-Prepaid insurance recorded in credit)

100,000 1,576,340 Ibig sabihin may bagong account na nag exist na Insurance Expense na 27,200 sapagkat ito ang expired portion while ang ating Prepaid Insurance na 34,000 ay magiging 6,800 nalang sapagkat I mininus natin ang credit entry Prepaid Insurance sa debit entry nito

Salaries Expense Cleaning Equipment Rental Expense

1,013,300 60,000 Delivery Truck Expense 43,740 Interest Expense 110,000 Other Expenses 70,340 Total P3,917,940 The following Information Occurred;

P3,917,940 B. An Inventory of cleaning supplies showed P12, 440 on hand. Solution;

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino Use the Asset Method of Adjustment na kung saan idedetermine natin kung magkano ang nagamit natin sa ating asset na Cleaning Supplies, sabi sa adjustment problem P12,440 ang hindi pa nagagamit sa ating Cleaning Supplies tingan muna natin ang ating Trial Balance it shows that 73,740 yung total cost nung Cleaning Supplies, Total Cost of Cleaning Supplies 73,740 Less: Unconsumed Portion 12,440 Total Consumed Portion 61,300 Adjustment Entry: Cleaning Supplies Expense 61,300 Cleaning Supplies 61,300

Ang Problem na ito ay patungkol sa na consume nating amount sa paggamit ng isang Non-Current Asset. Adjustment Entry: Depreciation Expense-Building 128,000 Accumulated Depreciation- Building 128,000 (Decrease in OE- Depreciation Expense-Building recorded in debit, Decrease in Asset-Accumulated Depreciation-Building recorded in credit) Note: sa problem na ito given na ang depreciated value ng ating Non-Current Asset pero may problem din na kailangan mo mag solve using Depreciation Formula;

D=C MINUS S DIVIDED BY N

(Decrease in OE- Cleaning Supplies Expense recorded in debit, Decrease in Asset-Cleaning Supplies recorded in credit) Na kung saan

Ibig sabihin may bagong account na nag exist na Cleaning Supplies Expense na 61,300 sapagkat ito ang consumed portion while ang ating Cleaning Supplies na 73,740 ay magiging 12,440 nalang sapagkat I mininus natin ang credit entry Cleaning Supplies sa debit entry nito

C.

Estimated Depreciation on the building is P128,000

Solution;

D=Depreciation C= Cost o yung original price nung non-current asset S= Salvage Value o yung na consume na natin sa non-current asset N= Number of Useful Years o yung taon na kapakipakinabang pa ang noncurrent asset.

D. Accrued Interest in Mortgage Payable is P10,000. Solution:

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino Use the Liability Method of adjustments na kung saan idedetermine natin kung magkano ba ang na accrued o maari nating ibayad na interest.

Adjustment Entry: Salaries Expense P 16,800 Salaries Payable P 16,800

Adjustment Entry: Interest Expense P 10,000 Interest Payable P 10,000 (Decrease in OE- Interest Expense recorded in debit, Liability- Interest Payable recorded in credit)

Use the Liability Method of adjustments na kung saan idedetermine natin kung magkano ba ang na accrued o maari nating bayaran na salary.

Increase in

(Decrease in OE- Salaries Expense recorded in debit, Liability- Salaries Payable recorded in credit)

Increase in

E. P 4000 of Cleaning Revenue was earned. ACTIVITY 1:

Solution: Use the Income Method of adjustments na kung saan idedetermine natin kung magkano ba ang na earned na ba talaga natin sa ating revenue. Adjustment Entry: Unearned Cleaning Revenue P4000 Cleaning Revenue P 4000 (Decrease in Liability-Unearned Cleaning Revenue recorded in Credit, Increase in OE- Cleaning Revenue recorded in credit)

F.

Salaries have been Accrued P 16,800

Bago tayo mag proceed sa Adjusted Trial Balance ikaw naman mag try mag adjust GAME!!!! Kuha ka nalang kahit anong Papel.

1. On November 1 Mr. Santos paid 60,000php for a 3 month rental in advance. At the end of the Accounting Period there is remaining 2 months that is not used. 2. A P 5000 Service Revenue is still unearned. 3. On December 31, five days salary of an employee at P500 per day has been accrued. 4. A delivery Truck was purchased P250,000 . Estimated to last 10 years and have a salvage value of P 50,000. 5. An Inventory of cleaning supplies showed P23, 450 unused.

Trial Balance after adjustments

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino Reynaldo Gulane Cleaners Adjusted Trial Balance

The following Information occurred;

next page please….

December 31, 2013

Culminating Activity:

A. An examination of Insurance policies showed that P 30,000 is expired at the year end.

Grino Accounting and Auditing Firm

B. Office Supplies on hand P 1100.

Trial Balance May 31, 2013

Account Titles Cash Accounts Receivable Prepaid Insurance Cleaning Supplies Land Building Acc. Depreciation-Building Accounts Payable Unearned Cleaning Revenues Mortgage Payable Interest Payable Salaries Payable Gulane, Capital Gulane, Withdrawals Cleaning Revenues Salaries Expense Cleaning Equipment Rental Expense

Delivery Truck Expense Interest Expense Other Expenses Depreciation Expense-Building Insurance Expense Cleaning Supplies Expense Total

Debit P 117,880 264,940 6,800 12,440 180,000 1,850,000

Credit

P 584,000 204,000 12,000 1,100,000 10,000 16,800 565,600 100,000 1,580,340 1,030,100 60,000 43,740 120,000 70,340 128,000 27,200 61,300 P4,072,740

C. Accrued Auditors wages, P 100,000, and Accountants salaries 95,000. Account Titles Cash Accounts Receivable Prepaid Insurance

Debit P 117,880 264,940 34,280

Prepaid Advertising Office Supplies Land Building Acc. Depreciation-Building Accounts Payable Unearned Service Revenues Bonds Payable Grino, Capital Grino, Withdrawals Service Revenues

20,000 73,740 180,000 1,850,000

Salaries Expense

1,013,300 43,740 110,000 70,340 P3,878,220

Delivery Truck Expense Insurance Expense Other Expenses Total

P4,072,740

Credit

P 456,000 204,000 16,880 1,100,000 505,000 100,000 1,596,340

P3,878,220

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino

D. Estimated Depreciation Rate of Building 10%.

3. Salaries Expense 500 Salaries Payable 500 4. Depreciation Expense-Delivery Truck 20,000 Accumulated Depreciation- Delivery Truck 20,000

E. Interest of 5% was accrued on Bonds Payable.

5. Cleaning Supplies Expense 23,450 Cleaning Supplies 23,450

Required: Prepare an Adjusting Jornal Entries and Adjusted Trial Balance Using the same Adjusted Trial Balance another set of data incurred.

a. P 10,000 of Unearned Service Revenue have been earned. b. The building was originally purchased P 1, 850,000 . Estimated to last 10 years and have a salvage value of P100,000.

Word of God:

James 1:5’’ Ngunit kung nagkukulang ng karunungan ang sinoman sa inyo, ay humingi sa Dios, na nagbibigay ng sagana sa lahat at hindi nanunumbat; at itoy ibibigay sa kaniya.’’

c. 60% of Prepaid Advertising is unexpired. d. Salaries have been Accrued P 26,800

Required: Prepare an Adjusting Jornal Entries and Adjusted Trial Balance

ANSWER KEY FOR ACTIVITY 1 1. Rent Expense 20,000 Prepaid Rent 20,000 2. Service Revenue 5,000 Unearned Service Revenue 5,000

Statement of Cash Flows Ang statement of cash flows ay ginagamit para malaman at maipaliwanag natin ang cash ledger natin na kung ano ba yung pumasok (INFLOW)at lumabas(OUTFLOW) na pera from the business.Ating tandaan na gagamitin natin dito ang journal entries para Makita natin na para saan yung ating na entrada At ang lahat ng debit side ay inflow at credit side naman ng cash ang outflow, Kadalasang ginagamit ang indirect method ng cashflow na kinapapalooban ng tatlong activities

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino 1. OPERATING ACTIVITIES 2. INVESTING ACTIVITIES 3. FINANCING ACTIVITIES OPERATING ACTIVITIES INFLOW(DEBIT) -

Cash na nakuha natin sa accounts receivable Cash na nakuha natin sa revenue dahil sa service na ibinigay natin sa customers.

FINANCING ACTIVITIES INFLOW -

Cash na natanggap mo mula sa investment at sa loans mo sa bank.

OUTFLOW -

Cash na nawala sayo due to withdrawal by the owner at ipinambayad sa loans.

OUTFLOW(CREDIT) -

Cash na binayad sa suppliers dahil sa biniling supplies Cash na binayad sa mga operating expenses Cash na binayad sa creditors Cash na binayad sa empleyado

INVESTING ACTIVITIES INFLOW -

Cash na natanggap mo sa pagpapabili ng mga ari arian Cash na natanggap mo from equity securities Cash na nakolekta mo sa notes receivable

OUTFLOW -

Cash na binayad mo sa pagbili ng iyong ari arian o nn current assets. Cash na binayad mo sa equity security

For request of handouts in other topics approach niyo lang ako, mas mabuti kasi ang mag impart ng knowledge sa iba kaysa naman itago at ipagkait ito.

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino Sample Statement of Cash Flows

FINANCIAL STATEMENTS MAPPING

ABM and GAS Statement of Cash Flows For the month ended March 31,2018 Cash Flows from Operating Activities Cash received from clients Payment to Operating Expenses Payment to creditors Net Cash Provided by Operating Activities Cash Flows from Investing Activities Cash received from selling of equipment Cash received from notes receivable Payment to Acquire Cars Net Cash Provided by Investing Activities Cash Flows from Financing Activities Cash received from owners investment Cash received from loans in bank Payment to owners withdrawal Net Increase in Cash Cash balance, March 1, 2018

Cash balance, March 31, 2018

P 20 ( 5) ( 3) P 12 P5 5 (2) 8 P8 2 ( 9)

1 P21 1 P22

NOTE: ANG CASH BALANCE SA UMPISA NA MARCH 1, 2018 AY MAKUKUHA SA BEGINNING BALANCE NG LEDGER.

TRIVIA IN IDENTIFYING THE ACCOUNTS INVOLVE IN DIFFERENT FINANCIAL STATEMENTS.

Account Titles Debit Credit CASH INFLOW (Dr.) Cash P 117,880 CASH FLOW LESS (OUTFLOW)(Cr.) Accounts Receivable 264,940 Prepaid Insurance 34,000 Cleaning 73,740 ASSETS= LIABILITIES + Supplies STATEMENT OF Land 180,000 EXPLANATION ORIGINAL ENTRY OWNERS EQUITY Building 1,850,000 FINANCIAL POSITION CASH RECEIVED FROM CLIENTS CASH Acc. Depreciation-Building ACCOUNTS RECEIVABLE P 456,000 CASH Kung iisipin mong madali ang accounting at may tiwala Accounts Payable 204,000 SERVICE INCOME Unearned Cleaning Revenues 16,000 kang tutulungan ka n gating Diyos madadalian ka stay BEGINNING CAPITAL LESS STATEMENT OF CHANGES PAYMENT TO OPERATING EXPENSE NAME OF EXPENSE Mortgage Payable 1,100,000 positive lang at iwasan ang kompetisyon di kasi WITHDRAWAL AND NET CASH IN EQUITY Gulane, Capital 565,000 pagalingan patatagan ito. LOSS ADD ADDITIONAL PAYMENT TO CREDITORSang accounting ACCOUNTS PAYABLE Gulane, Withdrawals 100,000 CASH INVESTMENT AND NET Cleaning Revenues 1,576,340 NOTE: KAPAG WALANG KAKONEK PROFIT = ENDING CAPITAL Salaries Expense SA PRESENT 1,013,300 TRANSACTION. Cleaning Equipment RentalCASH Expense CASH RECEIVED FROM SELLING OF 60,000 STATEMENT OF EQUIPMENT EQUIPMENT43,740 Truck Expense REVENUE LESSDelivery EXPENSES= FINANCIAL CASH RECEIVED FROM NOTES CASH Interest Expense 110,000 NET PROFIT( REVENUE IS RECEIVABLEOther Expenses NOTES RECEIVABLE 70,340PERFORMANCE GREATER THAN PAYMENT TO EXPENSE) ACQUIRED CARS CARS Total P3,917,940 CASH P3,917,940 (NETCASH LOSS) ( EXPENSE RECEIVED FROMISOWNERS CASH GREATER THAN REVENUE) INVESTMENT CAPITAL CASH RECEIVED FROM LOANS IN BANK PAYMENT TO OWNERS WITHDRAWAL

CASH LOANS PAYABLE WITHDRAWAL CASH...