Situation: Makabayan Company developed its unadjusted trial balance dated December 31, 2020. Makabayan uses the expedient...

Transcribed Image Text:

Situation: Makabayan Company developed its unadjusted trial balance dated December 31, 2020. Makabayan uses the expedient recording method whenever possible, adjusts its accounts once per year, adjusts its periodic inventory-related accounts and records all closing entries. Cash Accounts receivable Allowance for doubtful accounts Inventory, December 31, 2019 Equipment Accumulated depreciation MAKABAYAN COMPANY UNADJUSTED TRIAL BALANCE DECEMBER 31, 2020 Land Accounts payable Notes payable. 8% due April 1, 2026 Makabayan, Capital Sales revenue (all on account) Subscription revenue Purchases Rent expense Interest expense Selling expense Insurance expense Wage expense General and administrative expense Totals P P Dr 400,000 600,000 900,000 7,800,000 1,500,000 P Cr 60,000 1,000,000 220,000 2,000,000 4,500,000 9,000,000 240,000 2,500,000 600,000 120,000 400,000 300,000 1,100,000 800,000 17,020,000 P 17,020,000 a) Ending inventory (December 31, 2020) by physical count is P800,000. b) The equipment has been depreciated by 2 years from its overall life with an estimated residual value of P800,000. Mabuhay uses straight-line depreciation and treats depreciation expense as a general and administration expense. Bad debts for 2020 is estimated to be P 190,000. c) d) The note payable requires interest to be paid semiannually, every October and April 1. e) P85,000 of wages were earned in December but not recorded. f) The rent expense represents a payment made on January 2, 2020, for two years' rent (2020 and 2021). g) The insurance expense represents a payment made for a one-year policy, paid June 30, 2020. Coverage begins on that date. h) The subscription revenue represents cash received from many university libraries for one-and-one-half- year subscription to a journal published by Makabayan. The subscription period begins July 1, 2020. Product: The ABM11 students acting as an accountant of Makabayan Company. will prepare the following: Record the adjusting journal entries. Prepare the adjusted trial balance. Prepare the Statement of Income (Multi-Step) and the Statement of Financial Position (Report Form) for 2020. Prepare the closing entries. Situation: Makabayan Company developed its unadjusted trial balance dated December 31, 2020. Makabayan uses the expedient recording method whenever possible, adjusts its accounts once per year, adjusts its periodic inventory-related accounts and records all closing entries. Cash Accounts receivable Allowance for doubtful accounts Inventory, December 31, 2019 Equipment Accumulated depreciation MAKABAYAN COMPANY UNADJUSTED TRIAL BALANCE DECEMBER 31, 2020 Land Accounts payable Notes payable. 8% due April 1, 2026 Makabayan, Capital Sales revenue (all on account) Subscription revenue Purchases Rent expense Interest expense Selling expense Insurance expense Wage expense General and administrative expense Totals P P Dr 400,000 600,000 900,000 7,800,000 1,500,000 P Cr 60,000 1,000,000 220,000 2,000,000 4,500,000 9,000,000 240,000 2,500,000 600,000 120,000 400,000 300,000 1,100,000 800,000 17,020,000 P 17,020,000 a) Ending inventory (December 31, 2020) by physical count is P800,000. b) The equipment has been depreciated by 2 years from its overall life with an estimated residual value of P800,000. Mabuhay uses straight-line depreciation and treats depreciation expense as a general and administration expense. Bad debts for 2020 is estimated to be P 190,000. c) d) The note payable requires interest to be paid semiannually, every October and April 1. e) P85,000 of wages were earned in December but not recorded. f) The rent expense represents a payment made on January 2, 2020, for two years' rent (2020 and 2021). g) The insurance expense represents a payment made for a one-year policy, paid June 30, 2020. Coverage begins on that date. h) The subscription revenue represents cash received from many university libraries for one-and-one-half- year subscription to a journal published by Makabayan. The subscription period begins July 1, 2020. Product: The ABM11 students acting as an accountant of Makabayan Company. will prepare the following: Record the adjusting journal entries. Prepare the adjusted trial balance. Prepare the Statement of Income (Multi-Step) and the Statement of Financial Position (Report Form) for 2020. Prepare the closing entries.

Answer rating: 100% (QA)

Adjusting Journal Entries a Adjusting for Ending Inventory Debit Inventory 100000 900000 800000 Credit Cost of Goods Sold 100000 b Depreciation on Equipment Debit Depreciation Expense General and Admi... View the full answer