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Balikatan Store is completing the accounting process for the year just ended December 31, 200B. The transactions in 200B have been journalized and posted. The following data with respect to adjusting entries were available: 1. Office supplies inventory at January 1, 200B, was P2,500. Office supplies purchased and debited to office supplies inventory during the year amounted to P6,000. The year-end inventory showed P3,000 of supplies on hand. 2. Wages earned on December 200B, unpaid and unrecorded on December 31, 200B, amounted to P27,000. The last payroll was December 28; next payroll will be January 6, 200C. 3. Three - fourths of the basement of the store is rented for P11,000 per month to another merchant, Kano Enterprises. Kano sells comparable, but not competitive, merchandise. On November 1, 200B, the store collected six months' rent in advance from Kano in the amount of P66,000, which was credited in full to rent revenue when collected. 4. The remaining basement space is rented to Gloria Specialty Shop for P5,200 per month, payable monthly. On December 31, 200B, the rent for November and December was neither collected nor recorded. Collection is expected on January 10, 200C. 5. Delivery equipment that cost P300,000 was being used by the store. The equipment was estimated to have a useful life of four years and a residual value of P6,000 at the end of four years. Assume depreciation for a full year for 200B. The asset will be depreciated evenly over its useful life. 6. On July 1, 200B, a two-year insurance premium amounting to P30,000 was paid in cash and debited in full to Prepaid Insurance. Coverage began on July 1, 200в. 7. Balikatan operates a repair shop to meet its own needs. Also, the shop does repairs for Kano. At the end of December 31, 200B, Kano did not pay for repairs completed amounting P7,500. This amount has not been recorded as Repairs Shop Revenue. Collection is expected on January 200c.

Balikatan Store is completing the accounting process for the year just ended December 31, 200B. The transactions in 200B have been journalized and posted. The following data with respect to adjusting entries were available: 1. Office supplies inventory at January 1, 200B, was P2,500. Office supplies purchased and debited to office supplies inventory during the year amounted to P6,000. The year-end inventory showed P3,000 of supplies on hand. 2. Wages earned on December 200B, unpaid and unrecorded on December 31, 200B, amounted to P27,000. The last payroll was December 28; next payroll will be January 6, 200C. 3. Three - fourths of the basement of the store is rented for P11,000 per month to another merchant, Kano Enterprises. Kano sells comparable, but not competitive, merchandise. On November 1, 200B, the store collected six months' rent in advance from Kano in the amount of P66,000, which was credited in full to rent revenue when collected. 4. The remaining basement space is rented to Gloria Specialty Shop for P5,200 per month, payable monthly. On December 31, 200B, the rent for November and December was neither collected nor recorded. Collection is expected on January 10, 200C. 5. Delivery equipment that cost P300,000 was being used by the store. The equipment was estimated to have a useful life of four years and a residual value of P6,000 at the end of four years. Assume depreciation for a full year for 200B. The asset will be depreciated evenly over its useful life. 6. On July 1, 200B, a two-year insurance premium amounting to P30,000 was paid in cash and debited in full to Prepaid Insurance. Coverage began on July 1, 200в. 7. Balikatan operates a repair shop to meet its own needs. Also, the shop does repairs for Kano. At the end of December 31, 200B, Kano did not pay for repairs completed amounting P7,500. This amount has not been recorded as Repairs Shop Revenue. Collection is expected on January 200c.

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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Balikatan Store is completing the accounting process for the year just ended December 31, 200B. The transactions in 200B have been journalized and posted. The following data with respect to adjusting entries were available: ww 1. Office supplies inventory at January 1, 200B, was P2,500. purchased and debited to office supplies inventory during the year amounted to P6,000. The year-end inventory showed P3,000 of supplies on hand. Office supplies 2. Wages earned on December 200B, unpaid and unrecorded on December 31, 200B, amounted to P27,000. The last payroll was December 28; next payroll will be January 6, 200C. 3. Three - fourths of the basement of the store is rented for P11,000 per month to another merchant, Kano Enterprises. Kano sells comparable, but not competitive, merchandise. months' rent in advance from Kano in the amount of P66,000, which was On November 1, 200B, the store collected six credited in full to rent revenue when collected. 4. The remaining basement space is rented to Gloria Specialty Shop for P5,200 per month, payable monthly. On December 31, 200B, the rent for November and December was neither collected nor recorded. Collection is expected on January 10, 200C. 5. Delivery equipment that cost P300,000 was being used by the store. The equipment was estimated to have a useful life of four years and a residual value of P6,000 at the end of four years. Assume depreciation for a full year for 200B. The asset will be depreciated evenly over its useful life. 6. On July 1, 200B, a two-year insurance premium amounting to P30,000 was paid in cash and debited in full to Prepaid Insurance. Coverage began on July 1, 200B. 7. Balikatan operates a repair shop to meet its own needs. Also, the shop does repairs for Kano. At the end of December 31, 200B, Kano did not pay for repairs completed amounting P7,500. This amount has not been recorded as Repairs Shop Revenue. Collection is expected on January 200C.
Transcribed Image Text:Balikatan Store is completing the accounting process for the year just ended December 31, 200B. The transactions in 200B have been journalized and posted. The following data with respect to adjusting entries were available: ww 1. Office supplies inventory at January 1, 200B, was P2,500. purchased and debited to office supplies inventory during the year amounted to P6,000. The year-end inventory showed P3,000 of supplies on hand. Office supplies 2. Wages earned on December 200B, unpaid and unrecorded on December 31, 200B, amounted to P27,000. The last payroll was December 28; next payroll will be January 6, 200C. 3. Three - fourths of the basement of the store is rented for P11,000 per month to another merchant, Kano Enterprises. Kano sells comparable, but not competitive, merchandise. months' rent in advance from Kano in the amount of P66,000, which was On November 1, 200B, the store collected six credited in full to rent revenue when collected. 4. The remaining basement space is rented to Gloria Specialty Shop for P5,200 per month, payable monthly. On December 31, 200B, the rent for November and December was neither collected nor recorded. Collection is expected on January 10, 200C. 5. Delivery equipment that cost P300,000 was being used by the store. The equipment was estimated to have a useful life of four years and a residual value of P6,000 at the end of four years. Assume depreciation for a full year for 200B. The asset will be depreciated evenly over its useful life. 6. On July 1, 200B, a two-year insurance premium amounting to P30,000 was paid in cash and debited in full to Prepaid Insurance. Coverage began on July 1, 200B. 7. Balikatan operates a repair shop to meet its own needs. Also, the shop does repairs for Kano. At the end of December 31, 200B, Kano did not pay for repairs completed amounting P7,500. This amount has not been recorded as Repairs Shop Revenue. Collection is expected on January 200C.
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