a. A review of insurance policies showed that P6,800 is unexpired at the year-end. b. An inventory of cleaning supplies showed P12,440 on hand. C. Estimated depreciation on the building for the year is P128,000. d. Accrued interest on the mortgage payable is P10,000. e. On Sept. 1, the entity signed a contract, effective immediately, with Davao City Hospital to dry clean, for a fixed monthly charge of P4,000, the uniforms used by doctors in surgery. The hospital paid for four months' service in advance. Salaries are paid on Saturdays. The weekly payroll is P25,200. Assume that Sept. 30 falls on a Thursday and the entity has a six-day pay week.

a. A review of insurance policies showed that P6,800 is unexpired at the year-end. b. An inventory of cleaning supplies showed P12,440 on hand. C. Estimated depreciation on the building for the year is P128,000. d. Accrued interest on the mortgage payable is P10,000. e. On Sept. 1, the entity signed a contract, effective immediately, with Davao City Hospital to dry clean, for a fixed monthly charge of P4,000, the uniforms used by doctors in surgery. The hospital paid for four months' service in advance. Salaries are paid on Saturdays. The weekly payroll is P25,200. Assume that Sept. 30 falls on a Thursday and the entity has a six-day pay week.

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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Crestfield leases office space. On January 3, the company incurs $26,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 5 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements?
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