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Computation:
Required Allowance for bad debts at year end 14,500.00
(P290,000 x 5%)
Less: Allowance for bad debts, beginning 9,300.00
Bad debts written off (7,800.00) 1,500.00
Bad debts expense 13,000.00
Case 2
e. Cash 4,850.00
Sales discounts 150.00
Accounts receivable 5,000.00
to record collection of account
j. Cash 6,860.00
Sales discounts 140.00
Accounts receivable 7,000.00
to record collection of account
Case 3
XYZ Corporation
Statement of Cash Flow
For the year ended March 31, 2006
(amounts in Philippine Peso)
Related Depreciation
Beginning Balance 130,000.00
Depreciation for the Year' 25,000.00
Accumulated 155,000.00
Balance per Books 145,000.00
Depreciation for the Disposed Fixed Asset 10,000.00
1.a
Date Transaction Quantity Unit Cost Balance
April 1 Beginning balance 100 5.00 500.00
4 Purchases 400 5.10 2,040.00
5 Sales (350) 5.10 (1,785.00) *
100 5.00 500.00
Balance
50 5.10 255.00
11 Purchases 300 5.30 1,590.00
12 Sales (300) 5.30 (1,590.00) *
(50) 5.10 (255.00) *
(25) 5.00 (125.00) *
Balance 75 5.00 375.00
18 Purchases 200 5.35 1,070.00
25 Sales (100) 5.35 (535.00) *
75 5.00 375.00
Balance
100 5.35 535.00
26 Purchases 100 5.60 560.00
Ending balance 275 1,470.00
1.b
Date Transaction Quantity Unit Cost Balance
April 1 Beginning balance 100 5.00 500.00
4 Purchases 400 5.10 2,040.00
5 Sales (100) 5.00 (500.00)
(250) 5.10 (1,275.00) *
Balance 150 5.10 765.00
11 Purchases 300 5.30 1,590.00
12 Sales (150) 5.10 (765.00) *
(225) 5.30 (1,192.50) *
Balance 75 5.30 397.50
18 Purchases 200 5.35 1,070.00
25 Sales (75) 5.30 (397.50) *
(25) 5.35 (133.75) *
Balance 175 5.35 936.25
26 Purchases 100 5.60 560.00
Ending balance 275 1,496.25
Sales:
April 5 (350 x P10.00) 3,500.00
April 12 (375 x P10.50) 3,937.50
April 25 (100 x P10.50) 1,050.00 8,487.50
* Cost of sales (4,263.75)
2.a
Date Transaction Quantity Unit Cost Balance
April 1 Beginning balance 100 5.00 500.00
4 Purchases 400 5.10 2,040.00
Balance 500 5.08 2,540.00
5 Sales (350) 5.08 (1,778.00)
Balance 150 5.08 762.00
11 Purchases 300 5.30 1,590.00
Balance 450 5.23 2,352.00
12 Sales (375) 5.23 (1,961.25)
Balance 75 5.23 390.75
18 Purchases 200 5.35 1,070.00
Balance 275 5.31 1,460.75
25 Sales (100) 5.31 (531.00)
Balance 175 5.31 929.75
26 Purchases 100 5.60 560.00
Ending balance 275 5.41 1,489.75
In pcs
Beginning inventory 100
Add Purchases 1,000
Less Sales (825)
Ending inventory 275
In Peso
Ending inventory
100 pcs @ P5 500.00
175 pcs @ P5.10 892.50
1,392.50
c. Purchases 13,500.00
Accounts payable 13,500.00
to record purchases on account
e. Insurance 2,600.00
Ella's capital 2,600.00
to correct overstatement of last year's insurance expense
(P7,800/12 x 4 months)
Utilities 1,500.00
Salaries 1,600.00
Accrued expense 3,100.00
to accrue expenses
2. The bank requested for the 2005 financial statements prepared under the Accrual
Basis of accounting because the bank wants to see the real performance and
position of the business. Proper matching of revenues and expenses are observed
under the Accrual Basis.
CASE 7
26 Cash 8,640.00
Sales discounts 160.00
Sales 8,000.00
Output tax 800.00
to record cash sales
Tri-Star Purchase
10 units P2500 cost
15 units P2800 cos
Using FIFO Method, the first purchase of 10 units was already sold, next cost is at P2,800 therefore should be carried as the cost of lost item
should be carried as the cost of lost item.
Case 8
2 Cash 27,000.00
Accumulated depreciation 18,656.00
Equipment 44,000.00
Gain on sale of equipment 1,656.00
to take up sale of equipment