FDNACCT 07 · Adjusting Entries
Conventions
Amounts are Philippine pesos (₱). Enter numeric answers without a currency symbol; commas are optional. Use accrual accounting, periodic inventory, prepaid expenses under the asset method, unearned revenue under the liability method, straight-line depreciation, and the allowance method unless a question states otherwise. Interest uses a 360-day year or months/12. Follow the course cash-flow convention: interest/dividends received are investing, interest/dividends paid are financing. Each Practice Lab table has one highlighted blank. Questions are independent; use only the facts given in that question.
Questions
01Complete the insurance-expense adjustment.
Problem
All amounts are Philippine pesos (₱). Harmon pays for evenly provided insurance on December 1 using the asset method. Adjust at December 31; no insurance expense has been posted.
| Item | Value |
|---|---|
| Insurance payment | 27,000 |
| Coverage period | 3 months, starting December 1 |
| December insurance expense | ? |
02Complete supplies used when ₱3,000 remains.
Problem
All amounts are Philippine pesos (₱). Crown records the supplies purchase as an asset. No supplies expense has been recognized before the December 31 adjustment.
| Item | Amount |
|---|---|
| Supplies available before adjustment | 7,500 |
| Unused supplies per December 31 count | 3,000 |
| Supplies expense | ? |
03Complete the remaining unearned ticket fees after two shows.
Problem
All amounts are Philippine pesos (₱). The receipts were credited to Unearned ticket fees. At December 31 the completed shows were fully attended; each ticket admits one person to one show.
| Item | Value |
|---|---|
| Advance ticket sales date | July 1 |
| Tickets sold in advance | 5,000 |
| Price per ticket | 300 |
| Seating capacity per show | 1,000 |
| Shows completed by December 31 | 2 |
| Remaining unearned ticket fees | ? |
04Complete the three-year contract revenue earned through December 31.
Problem
All amounts are Philippine pesos (₱). The advertising revenue is earned evenly from the contract start. All receipts were credited to Unearned advertising revenue; adjust at the reporting date.
| Item | Value |
|---|---|
| Receipt for contract | 360,000 |
| Contract start | August 1 |
| Contract duration | 3 years |
| Reporting date | December 31 of the same year |
| Revenue earned through reporting date | ? |
05Complete annual straight-line depreciation.
Problem
All amounts are Philippine pesos (₱). Use straight-line depreciation. No impairment or disposal is involved.
| Item | Value |
|---|---|
| Equipment cost | 325,000 |
| Estimated residual value | 25,000 |
| Useful life | 3 years |
| Annual depreciation expense | ? |
06Complete first-year depreciation for equipment acquired April 1.
Problem
All amounts are Philippine pesos (₱). Use straight-line monthly depreciation. No impairment, disposal, or prior depreciation is involved.
| Item | Value |
|---|---|
| Equipment cost | 325,000 |
| Estimated residual value | 25,000 |
| Useful life | 3 years |
| Available for use | April 1 |
| Reporting date | December 31 of the same year |
| Acquisition-year depreciation expense | ? |
07Complete net carrying amount.
Problem
All amounts are Philippine pesos (₱). These December 31 balances include all required depreciation adjustments. There is no impairment.
| Item | Amount |
|---|---|
| Equipment cost | 325,000 |
| Accumulated depreciation | 75,000 |
| Carrying amount | ? |
08Complete Galaxy’s ending allowance.
Problem
All amounts are Philippine pesos (₱). Galaxy · December 31. The balances are before adjustment. Use the balance-sheet allowance method.
| Item | Value |
|---|---|
| Accounts receivable | 941,500 |
| Existing allowance credit balance | 1,860 |
| Estimated uncollectible rate | 3.2% |
| Required ending allowance | ? |
09Complete Galaxy’s adjusting doubtful-accounts expense.
Problem
All amounts are Philippine pesos (₱). Galaxy · December 31. The balances are before adjustment. Use the balance-sheet allowance method.
| Item | Value |
|---|---|
| Accounts receivable | 941,500 |
| Existing allowance credit balance | 1,860 |
| Estimated uncollectible rate | 3.2% |
| Doubtful-accounts expense adjustment | ? |
10Complete Lucero’s total required allowance.
Problem
All amounts are Philippine pesos (₱). At December 31, Lucero has a credit balance of 308 in Allowance for doubtful accounts before adjustment. Apply the specified uncollectible estimate to each receivable age group:
| Age group | Receivable balance | Uncollectible rate |
|---|---|---|
| Current | 41,000 | 2% |
| 1–30 days past due | 6,000 | 4% |
| 31–60 days past due | 2,000 | 10% |
| Over 60 days past due | 1,500 | 30% |
11Complete Lucero’s adjustment.
Problem
All amounts are Philippine pesos (₱). At December 31, Lucero has a credit balance of 308 in Allowance for doubtful accounts before adjustment. Apply the specified uncollectible estimate to each receivable age group:
| Age group | Receivable balance | Uncollectible rate |
|---|---|---|
| Current | 41,000 | 2% |
| 1–30 days past due | 6,000 | 4% |
| 31–60 days past due | 2,000 | 10% |
| Over 60 days past due | 1,500 | 30% |
12Complete net realizable value.
Problem
All amounts are Philippine pesos (₱). At December 31, Lucero has a credit balance of 308 in Allowance for doubtful accounts before adjustment. Apply the specified uncollectible estimate to each receivable age group:
| Age group | Receivable balance | Uncollectible rate |
|---|---|---|
| Current | 41,000 | 2% |
| 1–30 days past due | 6,000 | 4% |
| 31–60 days past due | 2,000 | 10% |
| Over 60 days past due | 1,500 | 30% |
13Is net profit overstated or understated if the accrued expense is omitted?
Problem
The business has incurred an expense before year-end, but has neither paid nor recorded it. Assume it omits the accrual adjustment entirely and compare reported net profit with the correct amount.
14Which account is credited in the course’s periodic ending-inventory adjustment?
Problem
All amounts are Philippine pesos (₱). Use the periodic inventory system. Beginning inventory is 188,500; purchases 457,274; purchase returns 18,565; purchase discounts 4,653; freight in 1,259; ending inventory from physical count 85,150. Net sales are 796,065 and operating expenses are 100,000. Complete the periodic-inventory ending-count entry using the temporary summary account in the course procedure.
15What commissions receivable should Agrias recognize at November 30?
Problem
All amounts are Philippine pesos (₱). Agrias earns commission per consigned unit sold. None of the November commission has been collected.
| Item | Value |
|---|---|
| Consigned units on November 1 | 750 |
| Additional consigned units delivered during November | 3,000 |
| Unsold units per November 30 count | 400 |
| Commission per unit sold | 8 |
| November commissions receivable | ? |