Question

Adjusting Entries – III. Provide the adjusting journal entries at year-end 2019 for the

following independent situations (assume calendar year)

1. On March 1, 2019. Finland Tutorials received P60,000 representing an advance

payment for services to be rendered in November 2019. This was booked using a real

account. At year end, only 70% of the expected service was rendered.

2. The trial balance of Mangolia Café shows Kitchen Supplies and Kitchen Supplies

Expense accounts at balances of P8,400 and P0, respectively. At year-end, there are

P1,480 of supplies on hand.

3. On June 15, 2019, Russia Beauty Shop paid P18,000 to Secure Insurance Company for a three-year insurance policy. This was taken up in the books using a real account.

4. China Chickens received a 90 – day, P18%, P175,000 note from a customer for

catering services rendered. The note matures on February 14, 2020.

5. On May 1, 2019. Indonesia Services mortgaged a piece of real property to a local bank. Proceeds amounted to P499,200, net of 4% services charges. The mortgage requires annual payment of 12% interest starting May 1, 2020.

5. On March 1, 2019, Pakistan Job Placements decided to sublease a portion of its office to a review center for a P8,500 a month. The review center occupied the space on September 1, 2019. Because of a tight budget, the review center requested Pakistan if it could make the first payment on January 15, 2020. Pakistan yielded to this request.

7. The Unearned Subscriptions Revenue account of Iran Events showed a balance of

P268, 500 composed of the following:

a. One-year subscription starting July 1, 2019, P87,000.

b. Two-year subscriptions starting February 1, 2019, P95,700.

c. Eight-month subscription starting April 1, 2019, P85,800.

8. Mexico Skin Care bought a piece of salon equipment for P75,000 on January 15, 2019. It has an estimated useful life of five years. Scrap value has been determined to be 10% of the acquisition cost.

9. Australia Delivery needed four trucks in 2019. Two trucks were purchased on May 1, 2019 at P1,850,000 each and another two trucks were purchased on July 1, 2019 at a total price 15% higher than the May 1, 2019 purchase. For this type ofdepreciable assets, Australia is allocating 8% of the acquisition cost for scrap value and estimating useful lives at eight years.

Answer 1