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1. Prepare audit adjustments for the following situations you find in the records of Mabinay, Inc. which closes its accounts December 31, 2019. a. December 1, 2019 Advertising Expense P12,000 Cash P12,000 Records payment of 2015 advertising contract b. Balance of Office Supplies Expense at 12/31/2019 P5,000 Balance of Office Supplies on Hand at 12/31/2019 500 Inventory value of Office Supplies at 12/31/2019 750 c. June 1, 2019: Prepaid Insurance P1,800 Cash P1,800

1. Prepare audit adjustments for the following situations you find in the records of Mabinay, Inc. which closes its accounts December 31, 2019. a. December 1, 2019 Advertising Expense P12,000 Cash P12,000 Records payment of 2015 advertising contract b. Balance of Office Supplies Expense at 12/31/2019 P5,000 Balance of Office Supplies on Hand at 12/31/2019 500 Inventory value of Office Supplies at 12/31/2019 750 c. June 1, 2019: Prepaid Insurance P1,800 Cash P1,800

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Prepare audit adjustments for the following situations you find in the records of Mabinay, Inc. which closes its accounts December 31, 2019. a. December 1, 2019 Advertising Expense P12,000 Cash P12,000 Records payment of 2015 advertising contract b. Balance of Office Supplies Expense at 12/31/2019 P5,000 Balance of Office Supplies on Hand at 12/31/2019 500 Inventory value of Office Supplies at 12/31/2019 750 c. June 1, 2019: Prepaid Insurance P1,800 Cash P1,800 (Records payment of 36-month policy for fire loss on inventory) d. Balance of Factory Supplies Expense Account at 12/31/2019 P3,300 Physical inventory of factory supplies at 12/31/2019 1,100 e. On May 1, 2019, a three-year subscription to the Professional Journal in the amount of P1,800 was mailed in but not paid for. Subscriptions Expense was charged for the entire amount. f. On September 1, 2019, paid 36 months premium of P3,600 on fire and extended coverage on building. No amortization of this premium has been recorded to date and the full amount remains in the Prepaid Insurance account. g. Signed a 10-year lease for a new warehouse; the closing costs of P12,000 paid on July 1, 2019, effective date of lease, was charged to Rent Expense. h. Paid annual dues of P1,200 on September 1, 2019, to the Chamber of Commerce and charged Dues and Subscription Expense. i. Subscribed to Building Reports on April 1, 2019, agreeing to pay equal semi-annual instalments of P720 each. The first payment was charged to Prepaid Dues and Subscriptions and the second charged to Dues and Subscriptions Expense. Vacation advances were made in the amount of P6,000 on December 15, 2019, and j. charged to Vacation Expense. Of this amount P3,000 applies to vacations starting January 1, 2020.
Transcribed Image Text:1. Prepare audit adjustments for the following situations you find in the records of Mabinay, Inc. which closes its accounts December 31, 2019. a. December 1, 2019 Advertising Expense P12,000 Cash P12,000 Records payment of 2015 advertising contract b. Balance of Office Supplies Expense at 12/31/2019 P5,000 Balance of Office Supplies on Hand at 12/31/2019 500 Inventory value of Office Supplies at 12/31/2019 750 c. June 1, 2019: Prepaid Insurance P1,800 Cash P1,800 (Records payment of 36-month policy for fire loss on inventory) d. Balance of Factory Supplies Expense Account at 12/31/2019 P3,300 Physical inventory of factory supplies at 12/31/2019 1,100 e. On May 1, 2019, a three-year subscription to the Professional Journal in the amount of P1,800 was mailed in but not paid for. Subscriptions Expense was charged for the entire amount. f. On September 1, 2019, paid 36 months premium of P3,600 on fire and extended coverage on building. No amortization of this premium has been recorded to date and the full amount remains in the Prepaid Insurance account. g. Signed a 10-year lease for a new warehouse; the closing costs of P12,000 paid on July 1, 2019, effective date of lease, was charged to Rent Expense. h. Paid annual dues of P1,200 on September 1, 2019, to the Chamber of Commerce and charged Dues and Subscription Expense. i. Subscribed to Building Reports on April 1, 2019, agreeing to pay equal semi-annual instalments of P720 each. The first payment was charged to Prepaid Dues and Subscriptions and the second charged to Dues and Subscriptions Expense. Vacation advances were made in the amount of P6,000 on December 15, 2019, and j. charged to Vacation Expense. Of this amount P3,000 applies to vacations starting January 1, 2020.
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