AC 510 Kimwell Chapter 5 Solutions

P5.
1
Acct#
13 Unissued Capital Stock
12 Authorized Capital Stock
5,000,000.00
4 Subscriptions receivable
14 Subscribed Capital Stock
15 Premium on Capital Stock
1,040,000.00
1 Cash in bank
1 Cash in bank
600,000.00
2,080,000.00
2 Petty cash fund

1 Cash in bank
1,000.00
6 Land
1 Cash in bank
200,000.00
7 Building
1 Cash in bank
1,800,000.00
8 Furniture and Fixtures

1 Cash in bank
120,000.00
9 Office Equipment
1 Cash in bank
80,000.00
10 Store Equipment
1 Cash in bank
100,000.00
1 Cash in bank
3 Accounts receivable
16 Sales
700,000.00
17 Sales Returns and Allowances

18 Purchases
643,000.00
1,252,000.00
3,000.00
1,257,000.00
19 Freight in
11 Accounts Payable
1 Cash in bank
?
1 Cash in bank
20 Purchase Returns and Allowances
2,400.00
22 Marketing Expenses
1 Cash in bank
296,000.00
23 General and Administrative Expenses

1 Cash in bank
304,000.00
1 Cash in bank
24 Commission Income
5 Prepaid insurance
1 Cash in bank
?
18,300.00
12,700.00
2,400.00
1 Cash in bank
870,000.00
11 Accounts Payable
21 Purchase Discounts
1 Cash in bank
618,000.00
16 Sales
1 Cash in bank
1,800.00
pts
1
5,000,000.00
1
1,000,000.00
40,000.00
1
700,000.00
1
600,000.00
1
2,000,000.00
80,000.00
1
1,000.00
1
200,000.00
1
1,800,000.00
1
120,000.00
1
80,000.00
1
100,000.00
1
1,895,000.00
1
3,000.00
1
1
834,000.00
441,300.00
1
2,400.00
1
296,000.00
1
304,000.00
1
12,700.00
1
2,400.00
1
870,000.00
4,500.00
613,500.00
1
1,800.00
23 plus 7
1 Cash in bank
2 Petty cash fund
5 Prepaid insurance
6 Land
7 Building
8 Furniture and Fixtures
9 Office Equipment
10 Store Equipment
11 Accounts Payable
12 Authorized Capital Stock
16 Sales
17 Sales Returns and Allowances
18 Purchases
19 Freight in
20 Purchase Returns and Allowances
22 Marketing Expenses
23 General and Administrative Expenses
24 Commission Income
Totals per Entry

Dr.
Cr.
4,308,100.00
3,960,000.00
1,000.00
1,252,000.00
873,000.00
1,040,000.00
700,000.00
2,400.00
200,000.00
1,800,000.00
120,000.00
80,000.00
100,000.00
618,000.00
834,000.00
5,000,000.00
5,000,000.00
2,600,000.00
600,000.00
1,000,000.00
120,000.00
1,800.00
1,895,000.00
3,000.00
1,257,000.00
18,300.00
2,400.00
4,500.00
296,000.00
304,000.00
12,700.00
17,001,600.00
17,001,600.00
Totals per Given

Dr.
Cr.
4,308,100.00
3,960,000.00
1,000.00
1,252,000.00
873,000.00
1,040,000.00
700,000.00
2,400.00
200,000.00
1,800,000.00
120,000.00
80,000.00
100,000.00
618,000.00
834,000.00
5,000,000.00
5,000,000.00
2,600,000.00
600,000.00
1,000,000.00
120,000.00
1,800.00
1,895,000.00
3,000.00
1,257,000.00
18,300.00
2,400.00
4,500.00
296,000.00
304,000.00
12,700.00
17,001,600.00
17,001,600.00
Dr.
Difference
Cr.
-
P5.2
1. Reconstruction of Journal Entries (Non-Adjusting)
11
Subscriptions Receivable
1,010,000.00
19
Subscribed Capital Stock
20
Premium on Capital Stock
1
19
Cash
11
Subscriptions Receivable
480,000.00
Subscribed Capital Stock

18
Capital Stock (authorized 5,000 sh
450,000.00
Cash
Capital Stock (authorized 5,000 sh
Premium on Capital Stock
1,010,000.00
18
20
21
Treasury Stock
Paid-in Capital from Donation
12
1
2
1
24
23
13
Cash
12
Treasury Stock
Cash
Accounts Receivable
22
Sales
Allowance for Doubtful Accounts
2
Accounts Receivable
Cash
Sales Discounts
2
Accounts Receivable
480,000.00
450,000.00
1,000,000.00
10,000.00
75,000.00
75,000.00
25,000.00
25,000.00
402,000.00
886,000.00
1,288,000.00
300.00
300.00
453,000.00
3,200.00
456,200.00
Purchases
13
Accounts Payable
1
Cash
829,000.00
Accounts Payable
25
Purchase Discounts
1
Cash
316,700.00
Notes Receivable (non-trade)

1
Cash
1,000,000.00
10,000.00
435,000.00
394,000.00
2,700.00
314,000.00
12,000.00
12,000.00
14
35
26
Cash
36
Interest Income
4
Notes Receivable (non-trade)
Furniture and Equipment
1
Cash
Cash
14
Notes Payable (Non-trade)
Notes Payable (Non-trade)
Interest Expense
1
Cash
Salaries and wages
1
Cash
27
1
29
30
31
40.00
4,000.00
1,300,000.00
1,300,000.00
60,000.00
60,000.00
24,000.00
120.00
24,120.00
210,000.00
210,000.00
24,500.00
24,500.00
Supplies Expense
1
Cash
34,700.00
Rent
1
Cash
36,000.00
Utility Expenses
1
Cash
34
1
7
Taxes
Cash
4,040.00
Miscellaneous Operating Expenses

Cash
Prepaid Advertising
1
Cash
34,700.00
36,000.00
7,900.00
7,900.00
2,800.00
2,800.00
12,000.00
12,000.00
2. Reconstruction of Adjusting Entries

32
3
5
Doubtful accounts
Accrued Interest Income

36
Interest Income
Merchandise Inventory
23
Purchases
4,430.00
4,430.00
20.00
20.00
175,000.00
175,000.00
28
7
8
33
35
Unused Supplies
29
Supplies Expense
8,000.00
8,000.00
9,500.00
9,500.00
Depreciation - furniture and equipment

65,000.00
10
Accumulated Depreciation - Furniture and Equipmen
Interest Expense
15
Accrued Interest Expense
27
16
26
Advertising
Prepaid Advertising
Taxes
Accrued Taxes
Salaries and wages

17
Accrued Salaries and Wages
65,000.00
60.00
60.00
3,300.00
3,300.00
3,500.00
3,500.00
POINTS
1
1 Asset Method
1 Expense Method
Given
Acct. No.
1 Cash
2 Accounts Receivable
3 Allowance for Doubtful Accounts
4 Notes Receivable (non-trade)
5 Accrued Interest Income
6 Merchandise Inventory
7 Prepaid Advertising
8 Unused Supplies
9 Furniture and Equipment
10 Accumulated Depreciation - Furniture and Equipment
11 Subscriptions Receivable
12 Treasury Stock
13 Accounts Payable
14 Notes Payable (Non-trade)
15 Accrued Interest Expense
16 Accrued Taxes
17 Accrued Salaries and Wages
18 Capital Stock (authorized 5,000 shares, P 100 par value)
21 Paid-in Capital from Donation
22 Sales
23 Purchases
24 Sales Discounts
26 Salaries and wages
27 Taxes
28 Advertising
29 Supplies Expense
30 Rent
31 Utility Expenses
32 Doubtful accounts
33 Depreciation - furniture and equipment
34 Miscellaneous Operating Expenses
35 Interest Expense
36 Interest Income
Dr.
2,434,040.00
886,000.00
300.00
12,000.00
20.00
175,000.00
12,000.00
9,500.00
1,300,000.00
1,010,000.00
75,000.00
316,700.00
24,000.00
450,000.00
829,000.00
3,200.00
213,500.00
27,800.00
8,000.00
34,700.00
36,000.00
7,900.00
4,430.00
65,000.00
2,800.00
180.00
7,937,070.00
Given
Cr.
2,372,020.00
456,500.00
4,430.00
4,000.00
8,000.00
65,000.00
480,000.00
25,000.00
435,000.00
60,000.00
60.00
3,300.00
3,500.00
1,450,000.00
1,000,000.00
20,000.00
75,000.00
1,288,000.00
175,000.00
2,700.00
9,500.00
60.00
7,937,070.00
From Entries
Dr.
Cr.
2,434,040.00
2,372,020.00
886,000.00
456,500.00
300.00
4,430.00
12,000.00
4,000.00
20.00
175,000.00
12,000.00
8,000.00
9,500.00
1,300,000.00
65,000.00
1,010,000.00
480,000.00
75,000.00
25,000.00
316,700.00
435,000.00
24,000.00
60,000.00
60.00
3,300.00
3,500.00
1,450,000.00
450,000.00
1,000,000.00
20,000.00
75,000.00
1,288,000.00
829,000.00
175,000.00
3,200.00
2,700.00
213,500.00
27,800.00
8,000.00
34,700.00
9,500.00
36,000.00
7,900.00
4,430.00
65,000.00
2,800.00
180.00
60.00
7,937,070.00
7,937,070.00
Dr.
Checking
Cr.
-
P5.3
Merchandise Inventory - December 31, 2012
Income Summary
337,600.00
337,600.00
Doubtful Accounts
10,790.00
Depreciation - building
Accumulated depreciation - building
50,000.00
Depreciation - office equipment

Accumulated depreciation - office equipment
20,000.00
Depreciation - store equipment

Accumulated depreciation - store equipment
30,000.00
Accrued interest income

Interest income
10,790.00
50,000.00
20,000.00
30,000.00
120.00
120.00
Prepaid advertising
Advertising expense
7,200.00
Unused office supplies

Office supplies expense
8,330.00
Sales taxes
Accrued sales taxes
Rent Income
Unearned rent income
Income Tax Expense
Income tax payable
7,200.00
8,330.00
12,600.00
12,600.00
2,400.00
2,400.00
123,200.00
123,200.00
???
???
*Might not be an adjusting entry because we are not sure whether there are any payments
neither is there any given for income tax expense.
there are any payments made during the year,
P5.4
Answer:
1. April 2008
Solution:
=237500/50000
4.75
=December 31, 2012 - 4.75 years
=April 2008
2. Bldng - 30
O.E. - 10
S.E. - 6
=1500000/50000
=200000/20000
=180000/30000
3. 2181500
=10790/.005
=2158000
=2158000+23500
4. 316000
=15800/.05
5. Dec. 11, 2012
=18000*.12*60/360
=360
=(120/360) * 60days
=20 days
=12/31/12 - 20 days
6. Feb. 9, 2013
=Dec. 11, 2012 + 60days
7. IBIT - 352000
NI - 228800
=123200/.35
=352000-123200
8. 100
=220-120
9. 15600
=1200+12000+2400
10. 1000
=12000/12
P5.5
12
Subscriptions receivable
11
Subscribed capital stock
13
Premium on capital stock
105,000.00
Cash in bank
12
105,000.00

Capital stock
100,000.00
11
10
16
Dividends
17
Dividends payable
20,000.00
Prepaid insurance
1
Cash in bank
Furniture and equipment

1
Cash in bank
100,000.00
Loans payable
Interest expense
1
Cash in bank
100,000.00
2,000.00
9
22
Merchandise inventory
Accounts payable
Cash in bank
345,000.00
8
1
Accounts payable
Cash in bank
287,000.00
Accounts receivable
Cash in bank
18
Sales
242,000.00
208,800.00
2
1
1,200.00
19
Cost of sales
4
362,000.00
1
23
Cash in bank
Sales discounts
2
Accounts receivable
222,300.00
2,700.00
20
21
Marketing expenses
General and administrative expense
38,000.00
21,000.00
Cash in bank
100,000.00
5,000.00
105,000.00
100,000.00
20,000.00
1,200.00
100,000.00
102,000.00
313,000.00
32,000.00
287,000.00
450,800.00
362,000.00
225,000.00
59,000.00
Trial
1-Dec-16
Account title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Cash in bank
Accounts receivable
Allowance for doubtful accounts
Prepaid insurance
Dr.
90,500.00
122,700.00
87,500.00
284,700.00
Accumulated depreciation furniture and

equipment
Accounts payable
Loans payable
Capital stock
Retained earnings, December 1
Appropriated for contingencies
Dividends
Dividends payable
Sales
Cost of sales
Marketing expenses
General and administrative expense
Interest expense
Sales discounts
Totals
585,400.00
GIVEN
Trial Balance as of
1-Dec-16
31-Dec-16
Cr.
Dr.
Cr.
626,600.00
364,700.00
581,200.00
225,000.00
2,900.00
362,000.00
2,900.00
432,500.00
1,200.00
384,700.00
65,000.00
62,600.00
100,000.00
65,000.00
287,000.00
100,000.00
300,000.00
100,000.00
105,000.00
10,000.00
24,900.00
20,000.00
375,600.00
100,000.00
400,000.00
100,000.00
105,000.00
15,000.00
24,900.00
20,000.00
20,000.00
20,000.00
450,800.00
362,000.00
38,000.00
21,000.00
2,000.00
2,700.00
585,400.00
2,847,400.00
2,847,400.00
FROM RECONSTRUCTED ENTRIES

Trial Balance as of
1-Dec-16
Dr.
31-Dec-16
Cr.
90,500.00
122,700.00
###
87,500.00
284,700.00
###
62,600.00
###
300,000.00
10,000.00
###
###
585,400.00
585,400.00
Dr.
Cr.
626,600.00
364,700.00
432,500.00
1,200.00
384,700.00
581,200.00
225,000.00
2,900.00
362,000.00
-
65,000.00
287,000.00
100,000.00
375,600.00
100,000.00
100,000.00
105,000.00
20,000.00
362,000.00
38,000.00
21,000.00
2,000.00
2,700.00
400,000.00
100,000.00
105,000.00
15,000.00
24,900.00
20,000.00
20,000.00
450,800.00
-
DIFFERENCE
Trial Balance as of
1-Dec-16
Dr.
31-Dec-16
Cr.
Dr.
Cr.
P5.6
28
Store supplies used

4
Store supplies
27
5
26
Insurance expense
Prepaid insurance
Depreciation building
8
Accumulated depreciation building
23
Depreciation delivery equipment

10
Accumulated depreciation delivery equipment
25
20
Office salaries
Salesmens salaries
13
Accrued salaries payable
8,000.00
3,000.00
24,000.00
12,800.00
6,420.00
8,340.00
Reversing Entries
8,000.00
3,000.00
24,000.00
12,800.00
14,760.00

Office salaries
Salesmen's salaries
14,760.00
6,420.00
8,340.00
P
As of March 31, 2016
Unadjusted trial balance
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Account title
Dr.
Cash
Inventory, January 1
Accounts receivable
Store supplies
Prepaid insurance
Land
Building
70,400.00
190,000.00
107,000.00
13,400.00
4,500.00
344,000.00
500,000.00
Accumulated depreciation
building
Delivery equipment
Cr.
101,000.00
140,000.00
Accumulated depreciation
delivery equipment
43,200.00
Notes payable
Accounts payable
29,000.00
81,500.00

Reynaldo Corpuz, capital
Reynaldo Corpuz, drawing
1,009,940.00
42,000.00
Sales
Sales returns and
allowances
Purchases
1,430,000.00
18,100.00
1,093,000.00
Purchase returns and

allowances
Salesmens salaries
Advertising
Delivery expenses
13,000.00
71,660.00
12,000.00
25,000.00
Depreciation delivery
equipment
Rent expense
Office salaries
22,000.00
54,580.00
Depreciation building
Insurance expense
Store supplies used
Rent expense
2,707,640.00
2,707,640.00
s of March 31, 2016

Adjusted trial balance
Dr.
Cr.
70,400.00
190,000.00
107,000.00
5,400.00
1,500.00
344,000.00
500,000.00
125,000.00
140,000.00
56,000.00
29,000.00
81,500.00
14,760.00
1,009,940.00
42,000.00
1,430,000.00
18,100.00
1,093,000.00
13,000.00
80,000.00
12,000.00
25,000.00
12,800.00
22,000.00
61,000.00
24,000.00
3,000.00
8,000.00
2,759,200.00
2,759,200.00
Unadjusted trial balance

Dr.
Cr.
70,400.00
190,000.00
107,000.00
13,400.00
4,500.00
344,000.00
500,000.00
101,000.00
140,000.00
ADJUSTING ENTRIES
Dr.
Cr.
-
8,000.00
3,000.00
-
24,000.00
43,200.00
29,000.00
81,500.00
1,009,940.00
12,800.00
14,760.00
18,100.00
1,093,000.00
42,000.00
1,430,000.00
13,000.00
71,660.00
12,000.00
25,000.00
22,000.00
54,580.00
2,707,640.00
2,707,640.00
8,340.00
-
12,800.00
6,420.00
24,000.00
3,000.00
8,000.00
62,560.00
62,560.00
Adjusted trial balance

Dr.
DIFFERENCES
Cr.
70,400.00
190,000.00
107,000.00
5,400.00
1,500.00
344,000.00
500,000.00
125,000.00
140,000.00
56,000.00
-
29,000.00
81,500.00
14,760.00
1,009,940.00
42,000.00
1,430,000.00
18,100.00
1,093,000.00
13,000.00
80,000.00
12,000.00
25,000.00
12,800.00
22,000.00
61,000.00
24,000.00
3,000.00
8,000.00
2,759,200.00
2,759,200.00
KEY
A
A
A
1
13
Cash in Bank
Capital stock
Investment of Cash
B
B
B
B
B
B
4
7
8
9
Materials inventory
Factory supplies inventory
Prepaid insurance
Machinery and equipment
14
Vouchers payable
Purchase of inventory, equipment and insurance
C
C
C
C
6
17
18
D
D
D
E
E
E
E
E
E
F
F
F
12
G
G
G
G
17
18
Marketing expenses
Administrative expenses
14
Vouchers payable
Record marketing and admin expenses for the period
H
H
H
14
Vouchers payable
10
Mortgage payable
Record payment of vouchers payable via mortgage payable
I
I
I
19
Financial expenses
14
Vouchers payable
Record of financial expenses to be paid for the period
Work in process inventory

Marketing expenses
12
Accrued payroll
Record payroll, except that for FOH, incurred for the period
4
Materials inventory
Issuance of materials to WIP
7
8
Prepaid insurance
12
Accrued payroll
14
Vouchers payable
Record FOH incurred during the period
14
Accrued payroll
Vouchers payable
Record issuance of V/P for Accrued Payroll
J
J
J
18
K
K
K
L
L
L
L
2
3
M
M
M
16
N
N
N
N
O
O
14
P
P
19
Prepaid insurance
Record expired portion of prepaid insurance applicable to admin expenses
Finished goods inventory

Record transfer of goods completed from WIP to FG
Notes receivable
Accounts receivable
15
Sales
Record sales for notes and on accounts
Cost of goods sold
5
Record cost of goods sold
Cash in Bank
2
Notes receivable
3
Accounts receivable
Record partial collection of AR and NR
Vouchers payable
1
Cash in Bank
Record partial payment of VP
Financial expenses
11
Accrued interest on mortgage
Record accrual of interest on mortgage
1,500,000.00
1,500,000.00
1,250,000.00
180,000.00
19,000.00
950,000.00
2,399,000.00
ent and insurance

1,165,000.00
80,000.00
90,000.00
1,335,000.00
FOH, incurred for the period
1,180,000.00
1,180,000.00
595,000.00
140,000.00
10,000.00
135,000.00
310,000.00
1,451,000.00
1,451,000.00
rued Payroll
195,000.00
195,000.00
390,000.00
expenses for the period

500,000.00
500,000.00
ayable via mortgage payable
o be paid for the period
55,000.00
55,000.00
5,000.00
5,000.00
aid insurance applicable to admin expenses

2,800,000.00
2,800,000.00
leted from WIP to FG

200,000.00
3,400,000.00
3,600,000.00
2,500,000.00
2,500,000.00
3,140,000.00
120,000.00
3,020,000.00
3,700,000.00
3,700,000.00
7,500.00
7,500.00
total FOH = (.2*2,800,000) from total FG for the period + 35,000 from WIP, end
total FOH = 595,000
some type of FOH (Not labor, not materials, not insurance)
=275000-80000(labor)
=290000-90000(labor)-5000(insurance)
Key
A
N
CASH
DR.
Key
1,500,000.00 O
3,140,000.00
4,640,000.00
E.B.
Key
K
E.B.
E.B.
DR.
CAPITAL STOCK
Key
A
E.B.
Key
C
G
MARKETING EXPENSES
DR.
Key
80,000.00
195,000.00
275,000.00
E.B.
Key
L
3,700,000.00
940,000.00
WORK IN PROG
Key
C
D
E
2,500,000.00
300,000.00
MACHINERY AND EQUIPMENT

DR.
Key
CR.
950,000.00
950,000.00
Key
CR.
3,700,000.00
FINISHED GOODS INVENTORY

DR.
Key
CR.
2,800,000.00 M
2,500,000.00
2,800,000.00
Key
B
NOTES R
MORTGAG
Key
950,000.00
VOUCHER
CR.
1,500,000.00
Key
H
O
1,500,000.00
(1,500,000.00)
ADMINISTRAT
CR.
275,000.00
Key
C
G
J
NOTES RECEIVABLE
DR.
Key
200,000.00 N
200,000.00
E.B.
ACCOUNTS REC
CR.
120,000.00
120,000.00
80,000.00
WORK IN PROGRESS INVENTORY

DR.
Key
CR.
1,165,000.00 K
2,800,000.00
1,180,000.00
595,000.00
2,940,000.00
2,800,000.00
E.B.
140,000.00
MORTGAGE PAYABLE
DR.
Key
H
E.B.
VOUCHERS PAYABLE
DR.
Key
500,000.00 B
3,700,000.00 E
F
G
I
4,200,000.00
E.B.
Key
L
FACTORY SUPPLIES
Key
B
ACCRUED INTEREST O
CR.
500,000.00
Key
500,000.00
(500,000.00)
SALES
CR.
2,399,000.00
310,000.00
1,451,000.00
390,000.00
55,000.00
4,605,000.00
(405,000.00)
ADMINISTRATIVE EXPENSES
DR.
Key
CR.
90,000.00
195,000.00
5,000.00
290,000.00
E.B.
290,000.00
Key
FINANCIAL EXP
Key
I
P
ACCOUNTS RECEIVABLE
DR.
Key
3,400,000.00 N
3,400,000.00
E.B.
MATERIALS INV
CR.
3,020,000.00
3,020,000.00
380,000.00
FACTORY SUPPLIES INVENTORY

DR.
Key
CR.
180,000.00 E
140,000.00
180,000.00
E.B.
E.B.
DR.
SALES
Key
L
E.B.
FINANCIAL EXPENSES
DR.
Key
55,000.00
7,500.00
62,500.00
E.B.
PREPAID INSU
Key
B
140,000.00
40,000.00
ACCRUED INTEREST ON MORTGAGE

DR.
Key
CR.
P
7,500.00
Key
B
ACCRUED PAY
Key
F
7,500.00
(7,500.00)
COST OF GOOD
CR.
3,600,000.00
3,600,000.00
(3,600,000.00)
CR.
62,500.00
Key
M
MATERIALS INVENTORY
DR.
Key
1,250,000.00 D
1,250,000.00
E.B.
PREPAID INSURANCE
DR.
Key
19,000.00 E
J
19,000.00
E.B.
ACCRUED PAYROLL
DR.
Key
1,451,000.00 C
E
1,451,000.00
E.B.
COST OF GOODS SOLD
DR.
Key
2,500,000.00
2,500,000.00
E.B.
CR.
1,180,000.00
1,180,000.00
70,000.00
CR.
10,000.00
5,000.00
15,000.00
4,000.00
CR.
1,335,000.00
135,000.00
1,470,000.00
(19,000.00)
CR.
2,500,000.00
Transactions
Dr.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Cash in Bank
Notes receivable
Accounts receivable
Materials inventory
Prepaid insurance
Machinery and equipment
Mortgage payable
4,640,000.00
200,000.00
3,400,000.00
1,250,000.00
2,800,000.00
2,940,000.00
180,000.00
19,000.00
950,000.00
Accrued interest on mortgage

Accrued payroll
Capital stock
Vouchers payable
Sales
Cost of goods sold
Marketing expenses
Financial expenses
1,451,000.00
4,200,000.00
2,500,000.00
275,000.00
290,000.00
62,500.00
25,157,500.00
Transactions
Balances
Cr.
Dr.
3,700,000.00
120,000.00
3,020,000.00
1,180,000.00
2,500,000.00
2,800,000.00
140,000.00
15,000.00
Cr.
940,000.00
80,000.00
380,000.00
70,000.00
300,000.00
140,000.00
40,000.00
4,000.00
###
500,000.00
###
7,500.00
###
1,470,000.00
1,500,000.00
4,605,000.00
3,600,000.00
19,000.00
###
405,000.00
###
###
###
###
###
25,157,500.00
6,031,500.00
6,031,500.00
Totals per Entry
Differences
Dr.
Cr.
4,640,000.00
200,000.00
3,400,000.00
1,250,000.00
2,800,000.00
2,940,000.00
180,000.00
19,000.00
950,000.00
-
3,700,000.00
120,000.00
3,020,000.00
1,180,000.00
2,500,000.00
2,800,000.00
140,000.00
15,000.00
500,000.00
Dr.
7,500.00
1,451,000.00
4,200,000.00
2,500,000.00
275,000.00
290,000.00
62,500.00
1,470,000.00
1,500,000.00
4,605,000.00
3,600,000.00
-
25,157,500.00
25,157,500.00
Differences
Cr.
REVERSING ENTRIES
26
Interest Income
6
27
Operating Expenses
7
Prepaid operating expenses
15
Accrued operating expenses

27
Operating Expenses
16
Accrued interest expense

30
Interest Expense
17

31
Rent Income
ENTRIES FOR TRANSACTIONS COMPLETED DURING THE YEAR

1
18
21
Cash
Capital stock
13
Accounts payable
2
4
Accounts receivable
Notes receivable
24
Sales
36
Cost of Goods Sold

5
Cash
2
Accounts receivable
4
Notes receivable
Cash
26
Interest Income
1
31
1
12
34
Cash
Rent Income
Cash
Accumulated depreciation Equip.
Loss on Sale of Equipment
11
1
Cash
20
19
18
1
Equipment

Capital stock
Cash
8
Investment in stock
35
Gain on Sale of Investment
13
Accounts payable
1
Cash
14
Loans payable
1
Cash
30
Interest Expense
1
Cash
27
1
11
22
Equipment
1
Cash
Furniture and fixtures
1
Cash
32
Dividends Payable
32
1
22
Operating Expenses
Cash
Dividends Payable
Cash

23
Appropriated for contingencies
ADJUSTING ENTRIES
25
3
6
Doubtful Accounts Expense

Allowance for doubtful accounts
26
7
Interest Income
Prepaid operating expenses

27
Operating Expenses
28
10
Depreciation - Furniture and Fixtures

Accumulated depreciation F&F
29
Depreciation - Equipment
12
Accumulated depreciation Equip.
27
Operating Expenses
15
Accrued operating expenses
30
Interest Expense
16
Accrued interest expense
31
17
Rent Income
1,000.00
1,000.00
21,000.00
21,000.00
7,600.00
7,600.00
900.00
900.00
500.00
500.00
HE YEAR
203,000.00
200,000.00
3,000.00
1,112,000.00
1,112,000.00
1,529,000.00
30,000.00
1,559,000.00
1,128,000.00
1,128,000.00
1,547,000.00
1,507,000.00
40,000.00
2,100.00
2,100.00
13,000.00
13,000.00
48,500.00
10,000.00
1,500.00
60,000.00
60,000.00
60,000.00
100,000.00
100,000.00
11,000.00
10,000.00
1,000.00
1,106,000.00
1,106,000.00
50,000.00
50,000.00
9,800.00
9,800.00
287,000.00
287,000.00
80,000.00
80,000.00
20,000.00
20,000.00
50,000.00
50,000.00
50,000.00
50,000.00
10,000.00
10,000.00
2,400.00
2,400.00
500.00
500.00
17,000.00
17,000.00
28,000.00
28,000.00
32,000.00
32,000.00
9,300.00
9,300.00
700.00
700.00
1,500.00
1,500.00
Key
B.B.
CR. SALE
ACCOUNTS RECEIVABLE
DR.
Key
CR.
204,000.00 COLL.
1,507,000.00
1,529,000.00
1,733,000.00
E.B.
Key
B.B.
CR.PUR
E.B.
Key
DISP
E.B.
1,128,000.00
338,000.00
ACCUM. DEP. - EQUIPMENT

DR.
Key
CR.
10,000.00 B.B.
130,000.00
DEP.
32,000.00
10,000.00
152,000.00
Key
B.B.
CR. SALE
1,507,000.00
226,000.00
MERCHANDISE INVENTORY
DR.
Key
CR.
354,000.00 COGS
1,128,000.00
1,112,000.00
1,466,000.00
NOTES RECEIVAB
162,000.00
ACCOUNTS PAYAB
Key
PAY.
E.B.
EQUIPMENT
Key
B.B.
CASH PU
NOTES RECEIVABLE
DR.
Key
70,000.00 COLL.
30,000.00
100,000.00
E.B.
ACCOUNTS PAYABLE
DR.
Key
1,106,000.00 B.B.
CR.PUR
1,106,000.00
193,000.00
CR.
40,000.00
40,000.00
60,000.00
CR.
187,000.00
1,112,000.00
1,299,000.00
EQUIPMENT
DR.
Key
390,000.00 DISP
80,000.00
470,000.00
E.B.
CR.
60,000.00
60,000.00
410,000.00
As of
1/1/2016
1 Cash
3 Allowance for doubtful accounts
4 Notes receivable
5 Merchandise inventory
6 Accrued interest income
7 Prepaid operating expenses
8 Investment in stock
9 Furniture and fixtures
10 Accumulated depreciation F&F
11 Equipment
12 Accumulated depreciation Equip.
13 Accounts payable
14 Loans payable
15 Accrued operating expenses
16 Accrued interest expense
17 Unearned rent income
18 Capital stock
19 Subscribed capital stock
21 Premium on capital stock
22 Retained earnings, December 1
23 Appropriated for contingencies
33,000.00
204,000.00
(4,000.00)
70,000.00
354,000.00
1,000.00
21,000.00
40,000.00
280,000.00
(116,000.00)
390,000.00
(130,000.00)
(187,000.00)
(100,000.00)
(7,600.00)
(900.00)
(500.00)
(700,000.00)
(100,000.00)
60,000.00
(20,000.00)
(67,000.00)
(20,000.00)
24 Sales
25 Doubtful Accounts Expense
26 Interest Income
27 Operating Expenses
Depreciation - Furniture and Fixtures
28
29 Depreciation - Equipment
30 Interest Expense
31 Rent Income
32 Dividends Payable
33 Income Summary
34 Loss on Sale of Equipment
35 Gain on Sale of Investment
36 Cost of Goods Sold
(Net Income)/Loss
FROM ENTRIES
As of
12/31/2016
DR.
314,800.00
226,000.00
(6,400.00)
60,000.00
338,000.00
500.00
17,000.00
30,000.00
300,000.00
(144,000.00)
410,000.00
(152,000.00)
(193,000.00)
(50,000.00)
(9,300.00)
(700.00)
(1,500.00)
(1,000,000.00)
(23,000.00)
(86,400.00)
(30,000.00)
CR.
1,884,600.00
1,529,000.00
30,000.00
1,112,000.00
500.00
17,000.00
20,000.00
80,000.00
10,000.00
1,106,000.00
50,000.00
7,600.00
900.00
500.00
100,000.00
60,000.00
6,008,100.00
1,602,800.00
1,507,000.00
2,400.00
40,000.00
1,128,000.00
1,000.00
21,000.00
10,000.00
28,000.00
60,000.00
32,000.00
1,112,000.00
9,300.00
700.00
1,500.00
300,000.00
60,000.00
3,000.00
10,000.00
5,928,700.00
2,400.00
1,000.00
317,300.00
1,559,000.00
2,600.00
24,600.00
28,000.00
32,000.00
10,500.00
1,500.00
50,000.00
1,500.00
1,128,000.00
900.00
13,500.00
50,000.00
1,000.00
-
TRIES
Difference
12/31/2016
314,800.00
226,000.00
(6,400.00)
60,000.00
338,000.00
500.00
17,000.00
30,000.00
300,000.00
(144,000.00)
410,000.00
(152,000.00)
(193,000.00)
(50,000.00)
(9,300.00)
(700.00)
(1,500.00)
(1,000,000.00)
(23,000.00)
(7,000.00)
(30,000.00)
79,400.00
(1,559,000.00)
2,400.00
(1,600.00)
292,700.00
28,000.00
32,000.00
9,600.00
(12,000.00)
1,500.00
(1,000.00)
1,128,000.00
(79,400.00)
(79,400.00)
(79,400.00)
DUNHILL METAL INDUSTRIES, INC.

STATEMENT OF COST OF GOOD MANUFACTURED
FOR THE YEAR ENDED DECEMBER 31, 2016
Materials, Beginning Balance
Add: Purchases of Materials
Purchase Returns of Materials
Less: Materials, Ending Balance
Materials Used
Direct Labor
Manufacturing Overhead
Total Manufacturing Cost
Add: WIP, Beginning
Less: WIP, End
Cost of Goods Manufactured
282,500.00
(2,500.00)
(28,000.00)
252,000.00
140,000.00
210,000.00
602,000.00
(60,200.00)
541,800.00

INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2016
Sales
Less: COGS
Cost of Goods Manufactured
Add: Merchandise Inventory, Beg.
Cost of Goods Available for Sale
Less: Merchandise Inventory, End
Gross Profit
Less: Marketing Expenses
Administrative Expenses
Income before Income Tax
Less: Income Tax
Net Income (Loss)
541,800.00
541,800.00
(135,450.00)

BALANCE SHEET
AS OF DECEMBER 31, 2016
ASSETS
Current Assets
Cash
Accounts Receivable
Materials Inventory
Work-in-Process Inventory
29,112.00
113,778.00
28,000.00
60,200.00
135,450.00
Noncurrent Assets
Factory Equipment
Accumulated Depreciation - Factory Equipment
Marketing Equipment
Accumulated Depreciation - Marketing Equipment
Office Equipment
Accumulated Depreciation - Office Equipment
TOTAL ASSETS
LIABILITIES
Accounts Payable
Salaries Payable
Income Tax Payable
SHAREHOLDERS' EQUITY
Paid-up Capital
Retained Earnings
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
250,000.00
(20,000.00)
70,000.00
(7,000.00)
40,000.00
(4,000.00)
56,000.00
3,000.00
10,962.00
600,000.00
25,578.00
S, INC.
ANUFACTURED
ER 31, 2016
Source of Information
1
1
2
4
5
S, INC.
ER 31, 2016
568,890.00
406,350.00
162,540.00
(70,000.00)
(56,000.00)
36,540.00
(10,962.00)
25,578.00
7
8
10
11
15
16
S, INC.
016
366,540.00
3,4,5,9,10,11,12,13
9
2
6
7
14
5
14
10
14
11
329,000.00
695,540.00
3
4
69,962.00
12
625,578.00
695,540.00
15,16
CASH
Key
Investment
Collection of AR
DR.
Key
600,000.00 Purchase of Fixed Assets
455,112.00 Payment of AP
Payment of SP
Payment of MOH
Payment of Marketing Exp.
Payment of Admin. Exp

1,055,112.00
E.B.
CR.
360,000.00
224,000.00
137,000.00
190,000.00
63,000.00
52,000.00
1,026,000.00
29,112.00
A.
B=.1(Net Income - 1000000 - B)

B=.1(3200000 - 1000000 - B)
B=220000-.1B
1.1B=220000
B=200000
B.
Total Estimated Liability before redemption = P3 * (.6* (No. of packages sold / 5 ))

Total Estimated Liability before any redemption = P2,880,000
Amount of Liability already redeemed = P 3 * (No. of coupons redeemed / 5)
Amount of Liability already redeemed = P1,200,000
Estimated liability for premium claims outstanding = Total Estimated Liability - Amount alre
Estimated liability for premium claims outstanding = P1,680,000
C.
Key
B.B.
Purchase
DR.
Key
CR.
- COGS
1,800,000.00
2,400,000.00
2,400,000.00
E.B.
1,800,000.00
600,000.00
Acco
Key
Payment
E.B.
ANS: P640,000
D.
Cost of Goods Available for Sale = Ending merchandise inventory + Cost of Sales
Cost of Goods Available for Sale = 900,000 + 14,000,000*
Cost of Goods Available for Sale = 14,900,000
*Cost of Sales = 700%*200,000
E.
Sales @ BEP = Fixed Costs / Contribution Margin Ratio

Contribution Margin Ratio = (Sales - Variable Costs)/Sales
Contribution Margin Ratio = 40%
Sales @ BEP = 800,000 / 40%
Sales @ BEP = 2,000,000
F.
100,000 = .4SP(200,000) - 400,000)

SP = P6.25
es sold / 5 ))
Liability - Amount already redeemed
Cost of Sales
Accounts Payable
DR.
Key
2,000,000.00 Purchase
2,000,000.00
400,000.00
CR.
2,400,000.00
2,400,000.00
Key
Sales
Accounts Receivable
DR.
2,340,000.00
2,340,000.00
Accounts Receivable
Key
Collections
CR.
1,700,000.00
E.B.
1,700,000.00
640,000.00
Key
A
A
A
Account name:
12
Capital stock subscribed
14
B
B
C
C
12

13
Capital stock paid-up
D
D
Cash in bank
13
E
E
F
F
G
G
10
H
H
Petty cash fund

1
Cash in bank
10
I
I
16
J
J
K
K
L
L
17
N
N
19
Cash in bank
Bank loan
Bank loan
1
Cash in bank
1
Cash in bank
Purchases
9
Accounts payable
18
M
M
Cash in bank
Accounts payable
Purchase returns and allowances
Accounts receivable
15
Sales
Sales returns and allowances
3
Accounts receivable
Cash in bank
3
Accounts receivable
Accounts payable
Cash in bank
Salaries
O
O
O
O
O
O
O
O
P
P
20
21
22
23
24
25
28
Rent
Insurance
Taxes and licenses
Advertising
Office supplies
Maintenance and repairs
General expenses
1
Cash in bank
ADJUSTING ENTRIES
26
Bad debts
4
Allowance for bad debts
Q
Q
27
R
R
28
S
S
Depreciation furniture and equipment

Allowance for depreciation Furniture and equipment
General expenses
11
Accrued expenses
Prepaid insurance
21
Insurance
Dr.
Cr.
55,000.00
50,000.00
5,000.00
44,000.00
44,000.00
40,000.00
40,000.00
100,000.00
100,000.00
1,500.00
1,500.00
75,000.00
75,000.00
30,000.00
30,000.00
55,555.00
55,555.00
400,000.00
400,000.00
2,000.00
2,000.00
500,000.00
500,000.00
6,600.00
6,600.00
334,000.00
334,000.00
290,000.00
290,000.00
30,000.00
7,200.00
1,330.00
12,000.00
4,800.00
2,100.00
1,900.00
34,200.00
93,530.00
8,330.00
8,330.00
5,330.00
nd equipment
5,330.00
2,000.00
2,000.00
330.00
330.00
Key
B
D
F
M
Key
A
Key
J
N
Key
Key
L
Key
O
Key
CASH IN BANK
DR.
Key
44,000.00 E
100,000.00 G
75,000.00 H
334,000.00 N
O
553,000.00
E.B.
CR.
1,500.00
30,000.00
55,555.00
290,000.00
93,530.00
470,585.00
82,415.00
SUBSCRIPTIONS RECEIVABLE
DR.
Key
CR.
55,000.00 B
44,000.00
55,000.00
44,000.00
E.B.
11,000.00
ACCOUNTS PAYABLE
DR.
Key
2,000.00 I
290,000.00
292,000.00
E.B.
CR.
400,000.00
1,500.00
Key
S
Key
G
400,000.00
(108,000.00)
CAPITAL STOCK PAID-UP

DR.
Key
CR.
C
40,000.00
D
100,000.00
140,000.00
E.B.
(140,000.00)
SALES RETURNS AND ALLOWANCES
DR.
Key
CR.
6,600.00
6,600.00
E.B.
6,600.00
INSURANCE
DR.
Key
1,330.00 S
1,330.00
E.B.
Key
E
CR.
330.00
330.00
1,000.00
MAINTENANCE AND REPAIRS

DR.
Key
CR.
PETTY CASH FUND

DR.
1,500.00
PREPAID INSURANCE
DR.
330.00
330.00
BANK LOAN
DR.
30,000.00
30,000.00
Key
PREMIUM ON CAPITAL STO

DR.
PURCHASE RETURNS AND ALLO

Key
DR.
-
Key
O
Key
TAXES AND LICENSES

DR.
12,000.00
12,000.00
BAD DEBTS
DR.
1,900.00
1,900.00
E.B.
1,900.00
8,330.00
8,330.00
PETTY CASH FUND

Key
E.B.
REPAID INSURANCE
Key
E.B.
BANK LOAN
Key
F
E.B.
CR.
1,500.00
CR.
CR.
75,000.00
E.B.
BAD DEBTS
Key
E.B.
Key
H
Key
ACCRUED EXPENSES
DR.
Key
R
E.B.
Key
5,000.00
(5,000.00)
CR.
12,000.00
CR.
DR.
SALES
Key
K
E.B.
Key
O
Key
O
340,600.00
159,400.00
FURNITURE AND EQUIPMENT

DR.
Key
CR.
55,555.00
55,555.00
E.B.
55,555.00
75,000.00
(45,000.00)
RETURNS AND ALLOWANCES

Key
CR.
J
2,000.00
2,000.00
E.B.
(2,000.00)
AXES AND LICENSES

Key
500,000.00
330.00
IUM ON CAPITAL STOCK

Key
CR.
A
5,000.00
E.B.
Key
K
ACCOUNTS RECEIVABLE
DR.
Key
CR.
500,000.00 L
6,600.00
M
334,000.00
SALARIES
DR.
Key
30,000.00
30,000.00
E.B.
ADVERTISING
DR.
Key
4,800.00
4,800.00
E.B.
CR.
2,000.00
2,000.00
(2,000.00)
CR.
500,000.00
500,000.00
(500,000.00)
CR.
30,000.00
CR.
4,800.00
DEPRECIATION - FURNITURE AND EQUIP.

Key
DR.
Key
CR.
E.B.
8,330.00
5,330.00
5,330.00
E.B.
5,330.00
Key
ALLOWANCE FOR BAD DEBTS

DR.
Key
CR.
P
8,330.00
8,330.00
(8,330.00)
E.B.
ALLOWANCE FOR DEPRECIATION
Key
DR.
Key
Q
E.B.
Key
C
CAPITAL STOCK SUBSCRIBED

DR.
Key
CR.
40,000.00 A
50,000.00
40,000.00
E.B.
Key
I
PURCHASES
DR.
Key
400,000.00
400,000.00
E.B.
Key
O
Key
O
Key
- F&E
CR.
5,330.00
5,330.00
(5,330.00)
RENT
DR.
Key
7,200.00
7,200.00
E.B.
OFFICE SUPPLIES
DR.
Key
2,100.00
2,100.00
E.B.
GENERAL EXPENSES
DR.
Key
50,000.00
(10,000.00)
CR.
400,000.00
CR.
7,200.00
CR.
2,100.00
CR.
O
R
34,200.00
2,000.00
36,200.00
E.B.
36,200.00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Cash in bank
Petty cash fund
Accounts receivable
Allowance for bad debts
Prepaid insurance
Allowance for depreciation Furniture and equipment
Accounts payable
Bank loan
Accrued expenses
Sales
Purchases
Sales returns and allowances
Purchase returns and allowances
Salaries
Rent
Insurance
Taxes and licenses
Advertising
Office supplies
Maintenance and repairs
Bad debts
Depreciation furniture and equipment
General expenses
Totals
GIVEN
Debit
553,000
1,500
500,000
55,000
330
55,555
292,000
30,000
40,000
From Entries
Credit
Debit
470,585
340,600
8,330
44,000
5,330
400,000
75,000
2,000
50,000
140,000
5,000
500,000
400,000
6,600
2,000
30,000
7,200
1,330
12,000
4,800
2,100
1,900
8,330
5,330
36,200
2,043,175
330
2,043,175
553,000.00
1,500.00
500,000.00
55,000.00
330.00
55,555.00
292,000.00
30,000.00
40,000.00
400,000.00
6,600.00
30,000.00
7,200.00
1,330.00
12,000.00
4,800.00
2,100.00
1,900.00
8,330.00
5,330.00
36,200.00
2,043,175.00
Credit
470,585.00
340,600.00
8,330.00
44,000.00
5,330.00
400,000.00
75,000.00
2,000.00
50,000.00
140,000.00
5,000.00
500,000.00
2,000.00
330.00
2,043,175.00
From Entries
Debit
Credit

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P5.

2 Petty cash fund

8 Furniture and Fixtures

17 Sales Returns and Allowances

23 General and Administrative Expenses

Totals per Entry

Totals per Given

Subscribed Capital Stock

Notes Receivable (non-trade)

Miscellaneous Operating Expenses

2. Reconstruction of Adjusting Entries

Accrued Interest Income

Depreciation - furniture and equipment

Salaries and wages

Depreciation - office equipment

Depreciation - store equipment

Accrued interest income

Unused office supplies

there are any payments made during the year,

5. Dec. 11, 2012

=Dec. 11, 2012 + 60days

Subscribed capital stock

Furniture and equipment

Accumulated depreciation furniture and

FROM RECONSTRUCTED ENTRIES

Store supplies used

Depreciation delivery equipment

Accrued salaries payable

Accrued salaries payable

Purchase returns and

s of March 31, 2016

Unadjusted trial balance

Adjusted trial balance

Work in process inventory

Finished goods inventory

ent and insurance

expenses for the period

ayable via mortgage payable

o be paid for the period

aid insurance applicable to admin expenses

leted from WIP to FG

MACHINERY AND EQUIPMENT

FINISHED GOODS INVENTORY

WORK IN PROGRESS INVENTORY

FACTORY SUPPLIES INVENTORY

ACCRUED INTEREST ON MORTGAGE

Accrued interest on mortgage

Totals per Entry

Accrued operating expenses

Accrued interest expense

Unearned rent income

ENTRIES FOR TRANSACTIONS COMPLETED DURING THE YEAR

Cost of Goods Sold

Subscribed capital stock

Retained earnings, December 1

Doubtful Accounts Expense

Prepaid operating expenses

Depreciation - Furniture and Fixtures

ACCUM. DEP. - EQUIPMENT

DUNHILL METAL INDUSTRIES, INC.

DUNHILL METAL INDUSTRIES, INC.

DUNHILL METAL INDUSTRIES, INC.

Payment of Admin. Exp