Colegio de San Gabriel Arcangel

PACUCOA Accredited – Level 1 Status

City of San Jose del Monte, Bulacan

BOOKKEEPING NC III
Activity No. 1 – Review Exam

I. Definition of Terms:

1. Accounting
2. Debit
3. Credit

II. Enumeration

1. Elements of balance sheet

2. Elements of income statement
3. Complete accounting cycle
4. Functions of accounting
5. Forms of Business Organization
6. Types of Business

III. Problem Solving

1. Jose Masipag, a local CPA, completed the following transactions during January 2017. The following account
titles are to be used:

Cash – 101 Accounts payable – 203 Insurance expense – 507

Accounts receivable – 103
Office supplies – 105
Office equipment – 121
Office furniture – 122
Notes payable – 201
Jose Masipag, Capital – 301
Jose Masipag, Drawing – 303
Fees earned – 401
Communication expense – 501
Gas and oil expense – 504
Light & water expense – 508
Rent expense – 509
Salary expense – 510
Taxes and licenses – 511

Jan 1 Jose Masipag made an initial investment of P25,000.

2 Paid rent for the month of January, P4,000.
2 Paid fire insurance for the month of January, P300.
3 Received from George Jimenez P750 for services rendered.
3 Borrowed P5,000 from the bank giving a 60-day note.
4 Paid membership dues to PICPA, P500.
5 Tomas Buena paid P950 for services rendered to him.
5 Bought for cash a new desk and table for the office, P5,500.
6 Paid business license fee to the city, P1,000.
8 Received a check from Ben Hardin for services rendered, P850.
9 Billed Susan Salgado P5,000 for services rendered.
10 Jose Masipag withdrew P2,500 for personal use.
11 Paid P600 for the gasoline used in business.
11 Received P650 from Wilfred Arietta for services rendered.
14 Paid the secretary’s salary for January 1 to 15, P2,500.
15 Purchased a computer and printer giving a note for P30,000.
16 Bought office supplies from Golden Bell Co. on account, P600.
17 Billed Samuel Donate P5,200 for services rendered.
18 Collected P3,000 from Susan Salgado to apply on her account.
19 Received cash from Fortune Company P4,750 for services rendered.
21 Paid Golden Bell Co. for office supplies purchased on January 16.
22 Jose Masipag made an additional investment of P10,000.
23 Received partial payment of P2,500 from Samuel Donate.
24 Paid the note issued on January 15.
25 Received P7,000 from Bell Company for services rendered.
28 Paid for January light and water bill, P1,200.
29 Paid the secretary’s salary for January 16 to 31, P2,500.
30 Paid Shell Service Station, P1,200 for gas and oil.
31 Paid PLDT Co. for telephone bills, P800.
 Required:
a. Journalize the above transactions in the general journal.
b. Prepare the T accounts and post each entry to the T accounts.
c. Prepare a Trial Balance.
d. Prepare the following financial statements for the month of January 2017.
 Statement of Comprehensive Income
 Statement of Changes in Equity
 Statement of Financial Position
 Statement of Cash Flows

2. Shown below is the Trial Balance of RM Repair Shop for the current year.

RM Repair Shop
Trial Balance
December 31, 2017

Account Title Debit Credit

Cash P 81,180.00
Accounts Receivable 25,650.00
Prepaid Insurance 3,600.00
Shop Supplies 16,400.00
Equipment 84,000.00
Accumulated Depreciation P 8,400.00
Accounts Payable 32,640.00
Loans Payable 50,000.00
Ramon Marcos, Capital 77,000.00
Ramon Marcos, Drawing 36,000.00
Service Income 191,940.00
Salaries Expense 64,500.00
Rent Expense 28,000.00
Utilities Expense 13,150.00
Miscellaneous Expense 7,500.00
Totals P 359,980.00 P 359,980.00

RM Repair Shop is on its second year of operations. Ramon Marcos Capital at the beginning of the current year
was P57,000. Below are the data that needed for adjustments:
 The two-year P3,600 insurance was paid on January 1 of the current year.
 Shop rental of P6,000 for three months starting December 1 was debited to Rent Expense.
 Interest of 18% per annum on P50,000 one-year bank loan granted on July 1, has accrued.
 Advertising placement of P1,800 for three months effective October 1 was still unpaid.
 P7,500 was collected in advance on December 30 for repair services to be rendered next year.
 Shop supplies inventory at the end of December amounted to P6,860.
 Equipment has an estimated useful life of ten years.

Required:
a. Prepare the adjusting entries.
b. Prepare a Statement of Comprehensive Income for the year ended December 31.
c. Prepare a Statement of Changes in Equity for the year ended December 31.
d. Prepare a Statement of Financial Position as of December 31.

3. Below are the unadjusted general ledger account balances of the Modern Appliance Store for the current year.

Cash 255,430 Sales Returns and Allowances 37,500

Notes Receivable 60,000 Sales Discounts 50,650
Accounts Receivable 275,000 Purchases 2,625,250
Merchandise Inventory 1,578,650 Purchase Returns & Allowances 26,250
Prepaid Insurance 12,000 Purchase Discounts 40,560
Office Supplies 6,250 Transportation-In 60,250
VAT Input Tax 22,400 Sales Salaries Expense 215,675
Delivery Equipment 500,000 Advertising Expense 33,000
Acc. Depreciation 50,000 Commission Expense 75,250
Store Equipment 150,000 Delivery Expense 112,500
 Acc. Depreciation 15,000 Misc. Selling Expense 12,450
Office Equipment 50,000 Office Salaries Expense 125,900
Acc. Depreciation 10,000 Rent Expense 110,000
Accounts Payable 945,650 Insurance Expense 12,000
Notes Payable 100,000 Office Supplies Expense 16,000
VAT Output Tax 30,800 Tax Expense 10,250
Mary Modern, Capital 1,505,945 Misc. General Expense 6,200
Mary Modern, Drawing 60,000 Interest Income 1,200
Sales 3,760,600 Interest Expense 12,000

Modern Appliance Store is on its second year of operations. Mary Modern, Capital at the beginning of the current
year was P1,405,945. Below are the data needed for adjustments at December 31:
 The physical inventory of merchandise as of December 31 amounted to P1,650,620.
 Interest at 12% per annum on the P60,000 Notes Receivable dated October 1, was due.
 The four-month P12,000 prepaid insurance was paid on Nov. 2 of the current year.
 Supplies inventory at the end of December amounted to P4,850.
 Delivery and Store Equipment has an estimated useful life of ten years.
 Office Equipment has an estimated useful life of five years.
 Accrued Sundry Payables as of December 31 were as follows:
o Unpaid Sales Salaries, P10,000
o Unpaid Office Salaries, P5,000
o Accrued Advertising Expense, P3,000
o Accrued Store Rental, P10,000
 It is estimated that 1% of sales will be uncollectible.
 VAT Input Tax and VAT Output Tax are to be closed to determine the VAT Payable at December 31.

Required:
a. Prepare the adjusting entries.
b. Prepare a Statement of Comprehensive Income for the year ended December 31.
c. Prepare a Statement of Changes in Equity for the year ended December 31.
d. Prepare a Statement of Financial Position as of December 31.

4. Shown below are different freight terms: Required: Indicate on the blank space provided whether it is the BUYER
or the SELLER

Who should shoulder

Freight Terms Who will pay
the freight
a. FOB – Shipping Point – Freight Collect
b. FOB – Shipping Point – Freight Prepaid
c. FOB – Destination – Freight Collect
d. FOB – Destination – Freight Prepaid

– END –

Mr. Rodel E. Cahilig

Instructor