ANGTUD, MARY JOY BSMA-3B

Exercise 5.1
Dr cr
A.

Subscriptions receivable ₱ 101,000

Premium on capital stocks ₱ 1,000

Subscribed capital stock s 100,000

 The credit to subscribed capital stocks has a corresponding debit to subscription receivable.
Since the debit to subscription receivable is greater by ₱ 1,000, it seems that the shares were
subscribed to above par value resulting to a credit to premium on capital stock.

B.

Accounts Payable 150,000

Purchase Discounts 3,000

Cash 147,000

 Out of the total debits to Accounts payable of ₱ 150,000, only ₱ 147,000 represents cash
collection since there was a credit to purchase discounts of ₱ 3,000.

C.

Allowance for Doubtful Accounts 45,000

Doubtful Accounts 45,000

D.

Cash 45,900

Notes Payable 45,000

Interest Income 900


ANGTUD, MARY JOY BSMA-3B

E.

Subscribed capital stocks 120,000

Capital Stocks 120,000

F.

Depreciation Expense 24,500

Accumulated depreciation-bldg 24,500

G. Taxes Expense 11,750

Accrued Taxes 11,750

 To record accrued taxes for the month or year

H. Cash 117,600

Sales Discounts 2,400

Accounts receivable 120,000

 Out of the total credits to accounts receivale of ₱ 120,000, ₱ 2,400 represents the discounts
granted to customers, therefore, the cash collections are ₱ 117,600

I.

Unearned rent 10,000

Rent Income 10,000

 to record rent earned for the month

J.
ANGTUD, MARY JOY BSMA-3B

Merchandise Inventory 21,500

Income Summary 21,500

E5.4

SOLUTION

Inventory Jan 1, 2011 ₱120,000

Add: Purchases 200,000

Total goods available for sale 320,000

Less: Ending Inventory (110,000)

Cost of goods sold 210,000

Less: Cash sales during 2011 50,000

Accounts Receivable 2011 160,000

ACCOUNTS RECEIVABLE END

Debit Credit

A/R Jan 1, 2011 80,000 A/R collected 2011 260,000

A/R 2011 160,000

TOTAL 240,000 TOTAL 260,000

(240,000)

Acounts Receivable end 20,000

E5.6
ANGTUD, MARY JOY BSMA-3B

Answer 55,875

Solution

Accounts Receivable

DR CR

110,000 440,000

411,500 65,000

95,000

431,500

add: 64,000

495,500 GROSS PROFITS

495,500*35%=173,425 Net sales

Less: 495,500= 322,075 COGS

Beg. Inventory 55,875

Add: Purchases 350,200

Goods available for sale 406,075

Less: End Inventory 84,000

COGS 322,075

Exercise 5.7
ANGTUD, MARY JOY BSMA-3B

Beg. Inv ₱ 450,000

Add. Purchase 1,100,000

Avail. Goods for Sale 1,550,000

Less: End. Inv. 500,000 (1,550,000 – 1,050,000)

Cost of Good Sold 1,050,000 (1,500,000 – 450, 000)

Sales 1,500,000

GPM × 30%

450,000

- 1,500,000

COGS 1,050,000

E 5-8
Raw Materials Purchased 430,000
Less: Increase in Raw Materials 15,000
Inventory
Raw Materials Used 415000

Beginning WIP 0
Raw Materials Used 415,000
Direct Manufacturing Labor 200,000
Factory Overhead 300,000
Cost to Account for 915000
Less: Ending WIP 0
Cost of Goods Manufactured 915000

Cost of Goods Manufactured 915000

Add: Decrease in finished good 35,000
inventory
COST OF GOODS SOLD 950000

E5. 9
ANGTUD, MARY JOY BSMA-3B

Net Sales 1,800,000

60% (100%-40%)
1,080,000
Ending Inventory 120,000
Cost of Goods Available
for Sale 1,200,000

E5. 10

Beginning Inventory P80000

Add:
Purchases 1535000
Freight in 25000
Cost of Goods Delivered 1560000
Less: Purchase Returns -40000
Net Purchases 1520000
Total Goods Available for Sale 1600000
Less: Merchandise Inventory, end -100000
Cost Of Goods Sold 1500000
 ANGTUD, MARY JOY BSMA-3B

EX. 5.11

Cash in bank Accounts Payable Sales Returns and Allowances Maintenance and Repairs
553,000 470,585 202,000 400,000 6,600 1,900
bal. P82,415 Bal. P198,000 Bal. P6,600 Bal. P1,900

Petty Cash Fund Bank Loan Purchase Returns ans Allowances Bad Debts
1,500 30,000 75,000 30,000 2,000 8,330
Bal. P1,500 Bal. P45,000 Bal. P2,000 Bal. P8,330

Accounts Receivable Accrued Expenses Salaries Depreciation Furniture and Equipment

500,000 340,000 2,000 30,000 5,330
Bal. P160,000 Bal. P2,000 Bal. P30,000 Bal. P5,330

Allowance For Bad Debts Capital Stocked Subscribed Rent General Expenses
8,330 40,000 50,000 7,200 36,200
Bal. P8,330 Bal. P10,000 Bal. P7,200 Bal. P36,200

Subscription Receivable Capital Stocked Paid-up Insurance

55,000 44,000 140,000 1,330
Bal. P11,000 Bal. P140,000 Bal. P1,330

Prepaid Insurance Premium on Capital Stock Taxes and Licenses

330 5,000 12,000
Bal. P330 Bal. P5,000 Bal. P12,000

Furniture and Equipment Sales Advertising

55,555 500,000 4,800
Bal. P55,555 Bal. P500,000 Bal. P4,800

Allowance for Depreciation-F and E Purchases Offi ce Supplies

5,330 400,000 2,100
Bal. P5,330 Bal. P400,000 Bal. P2,100

Adjusting Entries (5-

14)
1 Tax Expense 2,500
Accrued Tax Expense
(Payable) 2,500
#
2 Accrued Advertising Expense 1,500
Advertising
Expense 1,500
#
3 Rent Income 1,200
Unearned Rent Income 1,200
#
4 Accrued Interest 50
ANGTUD, MARY JOY BSMA-3B

Income
Interest Income 50
#
5 Depreciation Expense- Building 20,000
Accumulated Depreciation-
Building 20,000
#
6 Doubtful Account Expense 2,000
Allowance for Doubtful
Accounts 2,000
#

Reversing Entries(5-
15)
1 Royalty Income 2,100
Rent Income 2,100

2 No reversing entry

3 Advertising Expense (Payable) 2,100

Advertising
Expense 2,100

4 No reversing Entry