NAME: __________________________________________________________________ __________________________________ CN:___________ BA 99.

1 QUIZ 3 PART 2 THE ADJUSTING PROCESS

STUDENT NO:

A. (10PTS) The following ledger accounts are used by the Ottawa Greyhound Park: Accounts Receivable, Prepaid Printing, Prepaid Rent, Unearned Admissions Revenue, Printing Expense, Rent Expense, Admissions Revenue, Concessions Revenue INSTRUCTIONS For each of the following transactions below, prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry, if any, required on September 30, the end of the fiscal year. Journal Entry Initial Transaction 1. On September 1, paid rent on the track facility for three months, P180,000. 2. On September 1, sold season tickets for admission to the racetrack. The racing season is year-round with 25 racing days each month. Season ticket sales totaled P900,000. 3. On September 1, borrowed P200,000 from First National Bank by issuing a 9% note payable due in three months. 4. The accountant for the concessions company reported that gross receipts for September were P140,000. Ten percent is due to Ottawa and will be remitted by October 10. What will be the adjusting journal entries on September 31 for numbers 1 and 2 had the initial journal entry been recorded using the alternative methods? (1) (2) Adjusting Journal Entry

B. The Boulder Petting Zoo operates a drive through tourist attraction in Colorado. The company adjusts its accounts at the end of each month. The selected accounts appearing below reflect balances after adjusting entries were prepared on April 30. The adjusted trial balance shows the following: Prepaid Rent Fencing Debit Column P 8,000 30,000 Accumulated Depreciation Fencing Unearned Ticket Revenue Credit Column P 5,500 500

Other data: 1. Three months' rent had been prepaid on April 1. 2. The fencing is being depreciated at P6,000 per year. 3. The unearned ticket revenue represents tickets sold for future zoo visits. The tickets were sold at P4.00 each on April 1. During April, twenty-five of the tickets were used by customers. INSTRUCTIONS (a) Calculate the following: (6PTS) 1. Monthly rent expense 2. The age of the fencing in months 3. The number of tickets sold on April 1 (b) Prepare the adjusting entries that were made by the Boulder Petting Zoo on April 30. (3PTS)

C. The balance sheets of Cole Company include the following: Interest Receivable Supplies 12/31/05 P6,300 5,000 12/31/04 P -03,500 Wages Payable Unearned Revenue 12/31/05 3,600 -012/31/04 3,800 4,000

The income statement for 2005 shows the following: Interest Revenue Service Revenue P15,400 72,700 Supplies Expense Wages Expense P 8,700 37,000

INSTRUCTIONS: Calculate the following for 2005: (4PTS) 1. Cash paid for supplies. 2. Cash paid for wages.

ANSWERS TO END OF CHAPTER 3 QUIZ A. The following ledger accounts are used by the Ottawa Greyhound Park: Accounts Receivable, Prepaid Printing, Prepaid Rent, Unearned Admissions Revenue, Printing Expense, Rent Expense, Admissions Revenue, Concessions Revenue INSTRUCTIONS For each of the following transactions below, prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry, if any, required on September 30, the end of the fiscal year. (1 point each J/E, total of 8 points) 1. On September 1, paid rent on the track facility for three months, P180,000. 2. On September 1, sold season tickets for admission to the racetrack. The racing season is year-round with 25 racing days each month. Season ticket sales totaled P900,000. 3. On September 1, borrowed P200,000 from First National Bank by issuing a 9% note payable due in three months. 4. The accountant for the concessions company reported that gross receipts for September were P140,000. Ten percent (10%) is due to Ottawa and will be remitted by October 10. Journal Entry Initial Transaction Dr. Prepaid Rent Cr. Cash 180,000 P180,000 P Adjusting Journal Entry September 30 Dr. Rent Expense P60,000 Cr. Prepaid Rent P60,000 Dr. Unearned Admission Revenue P75,000 Cr. Admission Revenue P75,000

Dr. Cash P900,000 Cr. Unearned Admission Revenue P900,000

Dr. Cash P200,000 Cr. Notes payable P200,000 None

Dr. Interest expense P1,500 Cr. Interest payable P1,500 Dr. Accounts receivable P14,000 Cr. Concessions revenue P14,000

B. The Boulder Petting Zoo operates a drive through tourist attraction in Colorado. The company adjusts its accounts at the end of each month. The selected accounts appearing below reflect balances after adjusting entries were prepared on April 30. The adjusted trial balance shows the following: Prepaid Rent Fencing Accumulated Depreciation Fencing Unearned Ticket Revenue P 8,000 30,000 5,500 500

Other data: 4. Three months' rent had been prepaid on April 1. 5. The fencing is being depreciated at P6,000 per year. 6. The unearned ticket revenue represents tickets sold for future zoo visits. The tickets were sold at P4.00 each on April 1. During April, twenty-five of the tickets were used by customers. INSTRUCTIONS (a) Calculate the following: (2 points each, total of 6 points) 1. Monthly rent expense P8000 for remaining 2 months therefore P 4,000 monthly rent expense

2. The age of the fencing in months 3. The number of tickets sold on April 1

P500/month therefore 11 months

(125 tickets + 25 tickets) = 150 tickets

(b) Prepare the adjusting entries that were made by the Boulder Petting Zoo on April 30. ( 1 point each, total of 3) Dr. Rent expense P4,000 Cr. Prepaid rent P4,000 Dr. Depreciation expense P500 Cr. Accumulated depreciation Dr. Unearned ticket revenue P400 Cr. Ticket revenue P400 P500

C. The balance sheets of Cole Company include the following: Interest Receivable Supplies 12/31/05 P6,300 5,000 12/31/04 P -03,500 Wages Payable Unearned Revenue 12/31/05 3,600 -012/31/04 3,800 4,000

The income statement for 2005 shows the following: Interest Revenue Service Revenue P15,400 72,700 Supplies Expense Wages Expense P 8,700 37,000

INSTRUCTIONS: Calculate the following for 2005: (2 points each, total 4 points ) 1. Cash paid for supplies. 2. Cash paid for wages. Total of 21 points. P 10,200 P 37,200