ABM 1 Adjustments and Worksheet
ABM 1 Adjustments and Worksheet
ABM 1 Adjustments and Worksheet
ABM 1
ADJUSTMENTS AND WORKSHEET PREPARATION
1. A Machine costing P350,000 was purchased on account with a given term. If upon payment, a 20%
discount was availed, the credit entry will include –
a. Cash of P2280,000 and machine of P70,000 c. accounts payable of P280,000 and machine of P70,000
b. Cash of P280,000 and purchase discount of P70,000
d. Machine of P280,000 and purchase discount of P70,000
2. Mr. Jose Manila has reported profit of P60,000 at the end of the year but before the following omissions
were discovered:
1. Unpaid salaries of P5,000 was not booked-up
2. depreciation was not recorded, P4,000
3. expired portion of rental paid in advance in the amount of P2,000 was not taken up.
Incorporating the would-be adjustment on the above omission, how much is the corrected profit?
a. P49,000 c. P57,000
b. P53,000 d. P71,000
3. If advanced collection for services to be rendered in the later date of P2,500 was erroneously recorded at
P250, the adjusting entry required in the book of Dennis Garcia Co. would require a credit to –
a. Unearned Service Income of P2,250 c. Service Income of P2,250
b. Accrued Service Income of P2,250 d. answer not given
4. If salaries of daily paid employees of Nelrose Anguit Co. for the period from Dec. 27, 20A to Jan. 5, 20B at
P337 per day were unpaid as of Dec. 31, 20A cut-off date, the adjusting entry would re quire a credit to –
a. Accrued Salaries Payable, P1,685 c. Accrued Salaries Payable, P3,370
b. Salaries Expense, P1,685 d. Salaries Expense, P3,370
5. Of the P3,500 Supplies Inventory of Jonabelle Cacho Enterprises, P1,250 cost of supplies were on hand, the
adjusting entry would be –
DEBIT CREDIT
a. Supplies Used, P1,250 Supplies Inventory, P,250
b. Supplies Used, P4,050 Supplies Inventory, P4,050
c. Supplies Inventory P1,250 Supplies Used, P1,250
d. Supplies Inventory P4,050 Supplies Used, P4,050
6. An insurance premium was paid on Oct. 1, 20A by Arianne Grace Pinpin Co. for a 2 years policy contract,
P4,800. The adjusting entry on December 31, 20A would be—
DEBIT CREDIT
a. Insurance Expenses, P600 Prepaid Insurance, P600
b. Insurance Expenses, P4,200 Prepaid Insurance, P4,200
c. Prepaid Insurance, P600 Insurance Expense, P600
d. Prepaid Insurance, P4,200 Insurance Expense, P4,200
7. Jessa Mae Banse was engaged in building rental business in Dipolog City. On August 28, 20A, she received
P144,000 for a 3 years advance rental payment to commence on September 1, 20A. If Unearned Rental
Income account was credited upon receipt of cash, the adjusting entry on Dec. 31, 20A would be –
DEBIT CREDIT
a. Unearned Rental Income, P16,000 Rental Income, P16,000
b. Unearned Rental Income, P128,000 Rental Income, P128,000
c. Rental Income, P16,000 Unearned Rental Income, P16,000
d. Rental Income, P128,000 Unearned Rental Income, P128,000
On September 1, 20A, Daylinda Alfeche Enterprises bought a brand new computer costing P65,000. It has an
estimated life of 5 years and a scrap value of P5,000 at the ends of its life. The accounting period ends on
December 31, 20A.
8. How much is the annual depreciation of the computer?
a. P4,000 c. P12,000
b. P4,333 d. P13,000
9. How much depreciation expense that should be recorded at the end of the accounting period on December
31, 20A?
a. P3,000 c. P4,333
b. P4,000 d. P12,000
10. How much is the book value of the computer as of December 31, 20A?
a. P47,000 c. P60,000
b. P48,000 d. P61,000
A company handled by Teresita Gementi & Co. CPAs has developed a patent a cost of P520,000 including the
licensing of patent. The patent will be amortized for the entire life of 20 years.
11. If patent is developed and incurred expense as of July 1, 20A, how much is the amount of amortization it
shall report on December 31, 20A?
a. P11,000 c. P15,000
b. P13,000 d. P17,000
12. As of December 31, 2012, how much is the remaining cost of the patent?
a. P444,000 c. P509,000
b. P507,000 d. P510,000
Items 13 to 15 is based on the following data:
Robinson Berhay, owner of Sindangan All Service Repair bought a brand new ”Generator” on account costing
P160,000. His accountant, Mr. Alvin Ducoy has erroneously charged this to “Supplies Inventory” account
instead of Property and Eꝗuipment believing these were all supplies placed in a wooden box. The error was
discovered on June 30, 20A during the interim audit.
13. The adjusting journal entry to correct the account charging would be –
Debit Credit
a. Machine – Generator, P160,000 Supplies Inventory, P160,000
b. Supplies Inventory, P160,000 Machine-Generator, P160,000
c. Machine-Generator, P160,000 Accounts Payable, P160,000
d. Supplies Inventory, P160,000 Accounts Payable, P160,000
15. The net book value of the machine as of June 30, 20A would be –
a. P147,500 c. P142,800
b. P145,000 d. P140,300
Reꝗuired: 10 – Column Worksheet
1.
Cajegas Trucking Services
Trial Balance
June 30, 20B
Debit Credit
Additional Information
Debit Credit