The Unadjusted Trial Balance of Juan Luna, Inc. for the calendar year ended, December 31, 2019, their initial year of operation, is presented as follows: Debit Credit Cash 5,558,365 Accounts Receivable 1,000,000 Other Current Receivable 16,925 Supplies 7,845 Prepaid Rent 27,000 Prepaid Insurance 3,120 Merchandise Inventory Land 341,180 Equipment 500,000 Accumulated Depreciation- Equipment Truck 1,000,000 Accumulated Depreciation Truck Accounts

The Unadjusted Trial Balance of Juan Luna, Inc. for the calendar year ended, December 31, 2019, their initial year of operation, is presented as follows:

	Debit	Credit
Cash	5,558,365
Accounts Receivable	1,000,000
Other Current Receivable	16,925
Supplies	7,845
Prepaid Rent	27,000
Prepaid Insurance	3,120
Merchandise Inventory
Land	341,180
Equipment	500,000
Accumulated Depreciation- Equipment
Truck	1,000,000
Accumulated Depreciation – Truck
Accounts Payable		1,000,000
Other Current Payable		14,145
Interest Payable		795
Unearned Rent Revenue		132,000
Income Tax Payable
Notes Payable, Long Term		97.620
Ordinary Share Capital , 8,133 shares at P 100 par.		813,300
Share Premium		813,300
Retained Earnings
Accumulated Other Comprehensive		242,520
Retained Earnings
Other Service Revenue		119,280
Sales, 190,000 units		19,000,000
Cost of Goods Sold
Purchases	14,900,000
Purchase Return		1,000,000
Purchase Allowances		225,000
Wages Expense	91,250
Rent Expense
Utilities Expense	4,750
Insurance Expense	930
Supplies Expense	6,595
Depreciation Expense
Income Tax Expense
TOTAL	23,457,960	23,457,960

Other Information:

1. Gross purchases during the year

Feb. 20	100,000 units at P 60
June 5,	70,000 at P70
September 2	50,000 at P 80

2. Purchase returns were from the purchases made as follows:

Feb. 20	10,000 units
September 2	5,000 units

3. Purchase allowance is a deduction of P 5 from September 2 purchase from the net purchase.

4. The company used FIFO as cost flow method.

5. Information for adjustments at the end of the period.

a. The physical count shows P 5,895 of supplies on hand.

b. The prepaid rent amount is good for 1 year paid last October 1.

c. The prepaid insurance pertains to a one-year premium paid in advance on July 1.

d. Wages earned by employees in December 2017 are P 7,500, and yet they will not be paid until January 5, 2020.

e. On September 1, the company rented out the land to Aguinaldo Co. and received a full year rent of P 132,000.

f. On December 15, the company received a bill of P 235 for utilities, but this one will not be paid until its due date on January 15, 2020.

g. All fixed assets are depreciated on a straight line basis based on a 10-year period, no residual value, starting from its purchase, July 1, 2019.

h. The income tax rate is 30%. (Assume that the book income is equal to the taxable income)

Prepare the statement of comprehensive income, statement of changes in capital, statement of financial position and cash flow statement of Juan Luna Corporation for the year ended, December 31, 2017

11. Using the problem above, How much is the net purchases during the year?

A. 12,550,000

B. 13,675,000
C. 14,900,000

D. 13,900,000

12. Using the problem above, the total depreciation Expense is

A. 25,000

B. 150,000

C. 50,000

D. 75,000

14. Using the problem above, How many units of products were on hand at year end?

A. 30,000
B. 10,000

C. 15,000

D. 45,000

15. Using the problem above, How much is the average selling price of the company’s product?

A. 100

B. 105

C. 98

D. 84

16. Using the problem above, the adjusted wages expense is

A. 91,250

B. 98,750

C. 0

D. 83,750

17. Using the problem above, the balance of total Long Term assets at year end is

A. 1,766,180

B.1,500,000

C. 1,400,000

D. 1,375,000

Expert Answer

Ans: SNo Question Formula(If any) Details Ans : 1 net purchases Pu View the full answer