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PROBLEMS
Capital, end
Assets P609,000
Less liabilities 138,000 P471,000
Capital, beginning
Assets P485,000
Less liabilities 94,000 391,000
Increase in capital P 80,000
Additional investments (70,000)
Withdrawals 120,000
Profit P130,000
6-2.
a. Prepaid Insurance, beg.: 38,900 + 13,480 48,200 = 4,180
b. Sales revenue: 1,160,000 + 980,000 700,000 = 1,440,000 collections;
1,440,000 + 1,660,000 + 30,000 1,200,000 = 1,930,000
c. Depreciation expense: 210,000 + 80,000 40,000 206,000 = 44,000
d. Collections of rent: 440,000 80,000 + 100,000 + 54,000 30,000 = 484,000
Requirement 1
Capital, end
Assets P352,800
Less liabilities (including P8,000 unrecorded purchase) 123,500 P229,300
Capital, beginning
Assets P293,200
Less liabilities 117,800 175,400
Increase in capital P 53,900
Withdrawals 20,000
Profit P 73,900
Requirement 2
Grain Company
Statement of Comprehensive Income
For Year Ended December 31, 2016
Schedule 1 Sales
Receipts from customers P697,500
Accounts receivable, beginning ( 59,400)
Accounts receivable, ending 76,100
Accounts written off 10,800
Sales returns 21,000
Gross sales P746,000
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Chapter 6 Cash to Accrual/ Single Entry System
Schedule 2 Purchases
Payments to trade creditors P536,600
Accounts payable, beginning ( 63,300)
Accounts payable, ending 69,900
Unrecorded purchases 8,000
Purchase returns 13,000
Gross purchases P564,200
Sales P2,100,000
Cost of sales:
Purchases P1,850,000
Less Inventory, end 450,000 1,400,000
Gross profit P 700,000
Depreciation expense ( 24,000)
Other operating expenses ( 556,000)
Net profit P 120,000
Train Fastfood
Statement of Financial Position
December 31, 2016
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Chapter 6 Cash to Accrual/ Single Entry System
2016 2015
Revenues P 528,000 P515,000
Expenses (298,000) (272,000)
Profit P 230,000 P 243,000
2016 sales = P160,000 + 355,000 = 515,000
2015 sales = 295,000
2016 expenses = 67,000 + 160,000 + 45,000 = 272,000
2015 expenses = 185,000 + 40,000 = 225,000
(Accrual Basis)
Horn Corporation
Income Statement
For the Years Ended December 31, 2016 and 2015
2016 2015
Revenues P408,000 P445,000
Expenses (263,000) (255,000)
Profit P145,000 P190,000
2016 sales = 355,000 + 90,000 = 445,000
2015 sales = 295,000 + 160,000 + 30,000 = 485,000
2016 expenses = 40,000 + 160,000 + 55,000 = 255,000
2015 expenses = 185,000 + 67,000 + 25,000 = 277,000
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Chapter 6 Cash to Accrual/ Single Entry System
Atty. D Macapanalo
Profit and Loss
For the Year Ended December 31, 2016
Professional Fees
2016 Collection P1,250,000
Fees Receivable, January 1 ( 52,000)
Fees Receivable, December 31 47,000
Unearned Fees, January 1 26,200
Unearned Fees, December 31 ( 29,000)
Professional Fees, Accrual Basis P 514,900
Expenses
2016 Payments P 722,400
Accrued expenses, January 1 ( 18,000)
Accrued expenses, December 31 21,500
Prepaid expenses, January 1 6,400
Prepaid expenses, December 31 ( 5,000)
Expenses, accrual basis P 727,300
Sales P 7,440,000
Cost of sales 4,670,000
Gross Profit P 2,770,000
Other operating income
Gain on sale of automobile 20,000
Total income P 2,790,000
Operating expenses
Depreciation 298,667
Others 1,003,600
Total expenses 1,302,667
Profit before interest 1,487,733
Interest expense 104,000
Profit P 1,383,733
Jack Jill
Equity, January 1 P1,750,000 P1,815,000
Withdrawals (500,000) (250,000)
Share in profit 691,867 691,866
Equity, December 31 P1,941,867 P2,256,866
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Chapter 6 Cash to Accrual/ Single Entry System
Assets
Current Assets
Cash P 736,000
Accounts receivable 1,782,500
Allowance for bad debts (60,000 17,500) (42,500)
Receivable from employees 30,000
Deposit on merchandise purchases 75,000
Merchandise inventory 3,750,000
Prepaid insurance 8,000
Total current assets P 6,339,000
Non-current Assets
Property, plant and equipment
Furniture and fixtures P 220,000
Accumulated depreciation furniture and fixtures (87,000)
Automobiles 940,000
Accumulated depreciation - automobiles (421,667)
Total property, plant and equipment P 651,333
Total Assets P 6,990,333
Liabilities
Current Liabilities
Accounts Payable P 1,875,000
Accrued Expenses 16,600
Bank loan, including accrued interest 900,000
Total current liabilities P 2,791,600
Equity
Sales
Collections in 2016 (6,500,000 -60,000) P6,440,000
Accounts receivable, end (1,800,000 17,500) 1,782,500
Write off 17,500
Accounts receivable, beginning ( 800,000)
Sales P7,440,000
Purchases
Payments to merchandise creditors P4,500,000
Accounts payable, end 1,875,000
Returned merchandise (to be applied to future purchases) ( 75,000)
Accounts payable, beginning (1,380,000)
Net purchases P4,920,000
Cost of sales
Inventory, beginning P3,500,000
Net purchases 4,920,000
Inventory, end ( 3,750,000)
Cost of sales P4,670,000
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Chapter 6 Cash to Accrual/ Single Entry System
Depreciation expense
On old furniture and fixtures (P220,000/10) P 22,000
On old automobiles (P780,000 280,000)/ 3 166,667
On new automobile 440,000 / 3 x 9/12 110,000
Depreciation expense P 298,667
Interest Expense
On bank loan obtained on 01/02/15 and paid 05/02/15 P 32,000
Accrued on bank loan obtained on 05/01/15 72,000
Total interest expense P 104,000
Theory
Problems
MC13 D 210,000 50,000 = 160,000 capital, end; 260,000 60,000 = 200,000 beg cap
160,000 200,000 = 40,000 dec in capital + 50,000 12,000 = 78,000 net loss.
MC14 A (80,0004,000) + (120,000 6,000+ 40,000 30,000) = 200,000
MC15 D 800,000 + 320,000 + 124,000 240,000 96,000 = 908,000
MC16 B 189,000 + 12,000 8,000 + 36,000 + 7,000 10,500 = 225,500
MC17 A 30,000 + 3,000 21,000 = 12,000 + 60,000 58,000 = 14,000
MC18 D 600,000 + 400,000 200,000 + 300,000 150,000 = 950,000
MC19 D 794,000 + 51,000 45,000 = 800,000
MC20 A 715,000 144,000 96,000 7,000 = 468,000 + 60,000 33,000 = 495,000
MC21 A 800,000 (144,000/45%) = 480,000
MC22 B 890,000 270,000 600,000 60,000 + 130,000 = 90,000
MC23 D 310,000 + 85,000 + 4,000 + 66,000 = 465,000
MC24 B 280,000 + 67,000 + 5,000 = 352,000
MC25 C 352,000 5,000 21,700 = 325,300
MC26 C 45,000 + 3,500 + (200,000 x 2%) + (4,000/20% = 20,000 x 5%) = 53,500
MC27 A 45,000+280,000+140,000110,000=355,000+10,000+50,00060,000 =355,000
MC28 C 800,000 96,000 + 124,000 + 320,000 908,000 = 240,000
MC29 B 2M+960,000+100,000+800,000+120,000+320,000400,000
1.6M+1.2M+2M=5.5M
MC30 C 7.5M 5.8M = 1.7M 1.5M + .28M = 480,000
MC31 C 320,000 650,000 400,000 = 730,000
MC32 B 400,000+3,000,000-485,000=2,915,000 + 200,000 = 3,115,000
MC33 B 42,500+202,500+630,000+172,500 = 1,147,500
30,000+375,000+300,000+45,000 = 750,000
1,147,500 750,000 = 397,500 + 82,500 = 480,000
MC34 C 60,000 5,000 + 7,500 +3,000 4,000 = 61,500
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