Objectives 1. Recognize the alternative method in recording prepayments and deferrals. 2. Prepare the required adjusting journal entries for prepayments and deferrals using alternative method 3. Appreciates the objectives of closing and reversing entries. 4. Prepare the closing entries, post-closing trial balance and reversing entries.

Directions: Perform the operations required.

A. Adjusting Journal Entry-prepayment Given the following transactions, give the adjusting journal entries on December 31, 2016 under the asset method and expense method of recording prepayments.

Note: under the asset method the amount of the adjusting journal entry is the expired or used portion of the amount initially paid. Under the expense method, the amount of the adjusting journal is the unexpired or unused portion of the amount initially paid.

B. Adjusting Journal Entry-Deferrals Given the following transactions, give the adjusting journal entries on December 31, 2016 under the liability method and income method of recording deferrals. Note: Under the liability method, the amount of the adjusting journal entry is the earned portion of the amount initially received. Under the income method, the amount of the adjusting journal is the unearned portion of the amount initially received.

II. Selected unadjusted account balance from the trial balance of Jim Crickets Cleaners for the year December 31, 2016 are as follows:

Adjustment data for December 31, 2016 as follows:

a. Prepaid rent represents 18-month office rent paid last February 1, 2016 b. The equipment was purchased on account last September 30, 2014. It has an estimated salvage value of P3,600, and is expected to have a useful life of 3 years. Straight-line method of depreciation will be used. c. The balance in Notes Payable represents a 60-day, 12% interest-bearing note dated December 1, 2016. d. Last August 31, Jim Crickets Cleaners received a check amounting to P8,100 as payment for 9 months cleaning service. Give the adjusting journal entries on December 31, 2016.

give the adjusting journal entries on December 31, 2016

Directions: Perform the operations required. A. Adjusting Journal Entry - prepayment Given the following transactions, give the adjusting journal entries on December 31, 2016 under the asset method and expense method of recording prepayments. Note: under the asset method the amount of the adjusting journal entry is the expired or used portion of the amount initially paid. Under the expense method, the amount of the adjusting journal is the unexpired or unused portion of the amount initially paid. Date July 31 Asset Method Insurance Expense 55,000 Prepaid Insurance 55,000 To record expired rent Expense Method Prepaid Insurance 209,000 Insurance expense 209,000 To record unexpired rent May 1 Transaction Paid 2 years rent in advance, P264,000 Paid 3 years insurance premium in advance, P39,600 Paid P24,000 on a one-year P200,000 note Bought supplies P21,000. Three- fourth was used during the year. Feb. 15 Feb. 27 B. Adjusting Journal Entry - Deferrals Given the following transactions, give the adjusting journal entries on December 31, 2016 under the liability method and income method of recording deferrals. Note: Under the liability method, the amount of the adjusting journal entry is the earned portion of the amount initially received. Under the income method, the amount of the adjusting journal is the unearned portion of the amount initially received. Expense Method Asset Method Date April 30 Transaction Received P12,000 in advance for 5% commissions on books to be sold. Total book sales, P100,000 To record commissions not yet earned To record commissions earned Oct. 1 To record interest received in advance Received P6,000 in interest for a 4-month P90,000 notes receivable Received 6 months rent in advance P54,000 To record interest on note Sept. 15 To record rent income wood To record rent not yet earned II. Selected unadjusted account balance from the trial balance of Jim Crickets Cleaners for the year December 31, 2016 are as follows: Jim Crickets Cleaners Partial Unadjusted Trial Balance (el December 31, 2016) Debit Credit Cash P 18,000 Prepaid Rent 86,400 Equipment 36,000 Accumulated Depreciation - Equipment P 14,400 Notes Payable 18,000 Unearned Income 8,100 nemyse yang bulan Adjustment data for December 31, 2016 as follows: smuol anzubs an evig ancilasanat en Tyto anibrozato ben a. Prepaid rent represents 18-month office rent paid last February 1, 2016 numbe b. The equipment was purchased on account last September 30, 2014. It has an estimated salvage value of P3,600, and is expected to have a useful life of 3 years. Straight-line method of depreciation will be used. c. The balance in Notes Payable represents a 60-day, 12% interest-bearing note dated December 1, 2016. d. Last August 31, Jim Crickets Cleaners received a check amounting to P8,100 as payment for 9 months cleaning service. Give the adjusting journal entries on December 31, 2016. OS Directions: Perform the operations required. A. Adjusting Journal Entry - prepayment Given the following transactions, give the adjusting journal entries on December 31, 2016 under the asset method and expense method of recording prepayments. Note: under the asset method the amount of the adjusting journal entry is the expired or used portion of the amount initially paid. Under the expense method, the amount of the adjusting journal is the unexpired or unused portion of the amount initially paid. Date July 31 Asset Method Insurance Expense 55,000 Prepaid Insurance 55,000 To record expired rent Expense Method Prepaid Insurance 209,000 Insurance expense 209,000 To record unexpired rent May 1 Transaction Paid 2 years rent in advance, P264,000 Paid 3 years insurance premium in advance, P39,600 Paid P24,000 on a one-year P200,000 note Bought supplies P21,000. Three- fourth was used during the year. Feb. 15 Feb. 27 B. Adjusting Journal Entry - Deferrals Given the following transactions, give the adjusting journal entries on December 31, 2016 under the liability method and income method of recording deferrals. Note: Under the liability method, the amount of the adjusting journal entry is the earned portion of the amount initially received. Under the income method, the amount of the adjusting journal is the unearned portion of the amount initially received. Expense Method Asset Method Date April 30 Transaction Received P12,000 in advance for 5% commissions on books to be sold. Total book sales, P100,000 To record commissions not yet earned To record commissions earned Oct. 1 To record interest received in advance Received P6,000 in interest for a 4-month P90,000 notes receivable Received 6 months rent in advance P54,000 To record interest on note Sept. 15 To record rent income wood To record rent not yet earned II. Selected unadjusted account balance from the trial balance of Jim Crickets Cleaners for the year December 31, 2016 are as follows: Jim Crickets Cleaners Partial Unadjusted Trial Balance (el December 31, 2016) Debit Credit Cash P 18,000 Prepaid Rent 86,400 Equipment 36,000 Accumulated Depreciation - Equipment P 14,400 Notes Payable 18,000 Unearned Income 8,100 nemyse yang bulan Adjustment data for December 31, 2016 as follows: smuol anzubs an evig ancilasanat en Tyto anibrozato ben a. Prepaid rent represents 18-month office rent paid last February 1, 2016 numbe b. The equipment was purchased on account last September 30, 2014. It has an estimated salvage value of P3,600, and is expected to have a useful life of 3 years. Straight-line method of depreciation will be used. c. The balance in Notes Payable represents a 60-day, 12% interest-bearing note dated December 1, 2016. d. Last August 31, Jim Crickets Cleaners received a check amounting to P8,100 as payment for 9 months cleaning service. Give the adjusting journal entries on December 31, 2016. OS