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Chapter 4

The document discusses accounting problems related to recognizing revenue and expenses accrued or cash basis. It includes problems about business transactions, income statements, statements of owner's equity, adjusting entries, and a chart of accounts.

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Liza Mae Miranda
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Download as XLSX, PDF, TXT or read online on Scribd
25 views

Chapter 4

The document discusses accounting problems related to recognizing revenue and expenses accrued or cash basis. It includes problems about business transactions, income statements, statements of owner's equity, adjusting entries, and a chart of accounts.

Uploaded by

Liza Mae Miranda
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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PROBLEM 1 Accrual vs Cash basis accounting in recognizing REVENUE

Cash received in January for February flights


Cash received in February for February flights
Cash received in February for March flights
Cash received in March for February flights
Total REVENUE to be recognized in FEBRUARY

PROBLEM 2 Accrual vs Cash basis accounting in recognizing EXPENSES

Salary payments in May for work performed by employees


Salary payments in June for work performed by employe
Salary payments in June for work performed by employee
Salary payments in July for work performed by employees
Total SALARY EXPENSE to be recognized in JUNE

PROBLEM 5

Business Transactions CASH


Owner invested P100,000 cash in business. 100,000.00
Incurred legal expenses and paid P20,000. (20,000.00)
Paid cash for employee wages, P25,000. (25,000.00)
Issued note for cash borrrowed, P300,000. 300,000.00
Received P80,000 cash for service provided. 80,000.00
Bought car P500,000, 50% down, note for 50%. (250,000.00)
Bought office equipment on credit, P180,000. -
Provided services to clients on credit, P75,000. -
Collected 50% on client accounts. 37,500.00
Owner withdrew cash, P5,000. (5,000.00)
Net income/ Net Loss to Owner's Equity
Total 217,500.00

PROBLEM 6
Naty Luna Law Firm
Income Statement
For the month ended. June 30, 2019
Consulting fees earned
Rent expense
Salaries expenses
Telephone expenses
Advertising expenses
Net income

Naty Luna Law Firm


Statement of Changes in Owner's Equity
For the month ended. June 30, 2019

Owner's investment
Net income
Drawings
Owner's Equity, END

PROBLEM 7
Accounts Medical
Cash
Receivable Supplies
Balances 54,200.00 3,850.00
A 40,000.00
B. (15,000.00)
C. 10,000.00 10,000.00
D. (15,000.00)
E. 8,025.00
F. 12,450.00
G. 13,000.00 (13,000.00)
H. (850.00)
(250.00)
(400.00)
I. (3,980.00)
J. (10,000.00)
Total 75,700.00 5,025.00 12,320.00

Family Medical Clinic


Statement of Comprehensive Income
For the month ended July 31, 2019

Fees earned
Rent expense
Salaries expense
Repairs expense
Utilities expense
Supplies expense
Net income

Family Medical Clinic


Statement of Changes in Owner's Equity
For the month ended July 31, 2019

Beginning balance
Net income
Drawings
Ending balance

To check:
ASSETS
LIABILITIES

Problem 7

Cash
Accounts Supplies De Dios, Capital
Receivable
Description
Balances 120,500.00 1,500.00 350,000.00
Apr-02 (300.00) (300.00) Taxes and licenses
5 (2,815.00) (2,815.00) Taxes and licenses
8 (500.00) (500.00) Taxes and licenses
12 (5,750.00) (5,750.00) Utilities expense
18 (1,500.00) (1,500.00) Drawings
20 (800.00) (800.00) Utilities expense
25 (5,000.00) (5,000.00) Rent expense
30 18,500.00 500.00 19,000.00 Service income
30 (10,000.00) (10,000.00) Salaries expense
(750.00) (750.00) Supplies expense
112,335.00 500.00 750.00 341,585.00
(6,915.00)

Problem 9
A Revenue Increase Credit Service Income 104,000.00
Assets Increase Debit Accounts Receivable 54,000.00
Assets Increase Debit Cash 50,000.00

Accounts Receivable 54,000.00


Cash 50,000.00
Service Income 104,000.00

B Expense Increase Debit Salaries expense 26,000.00


Expense Increase Debit Utilities expense 800.00
Asset Decrease Credit Cash 26,800.00

Salaries expense 26,000.00


Utilities expense 800.00
Cash 26,800.00

C Assets Decrease Credit Cash 35,000.00


Liabilities Decrease Debit Notes payable 35,000.00

Notes payable 35,000.00


Cash 35,000.00

D ASSETS Decrease Credit Supplies 12,000.00


EXPENSE Increase Debit Supplies expense 12,000.00

Supplies expense 12,000.00


Supplies 12,000.00

E EXPENSE Increase Debit Utilities expense 7,500.00


LIABILITY Increase Credit Utilities payable 7,500.00

Utilities expense 7,500.00


Utilities payable 7,500.00

F ASSETS Increase Debit Supplies 5,000.00


ASSETS Decrease Credit Cash 5,000.00

Supplies 5,000.00
Cash 5,000.00

ASSETS Decrease Credit Supplies 1,000.00


CAPITAL Decrease Debit Kalaw, Drawings 1,000.00
Kalaw, Drawings 1,000.00
Supplies 1,000.00

G ASSET Increase Debit Cash 100,000.00


LIABILITIES Increase Credit Loans Payable 100,000.00

Cash 100,000.00
Loans Payable 100,000.00
CHART OF ACCOUNTS
ASSETS LIABILITIES EQUITY
Cash Accounts Payable Feria, Capital
Accounts Receivable Notes Payable Feria, Drawings
Supplies
Furniture
Equipment

REVENUE EXPENSES
Processing Fees Taxes and licenses
Commission Income Salaries Expense
Utilities Expense
Rent Expense
Supplies Expense

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