Midterm Examination

Answer Sheet

Multiple Choice
1b
2a
3d
4c
5d
6b
7c
8a
9d
10 d

Problem 1
Adjusting Entries Computation :

a&c
Office Equipment Delivery Equipment;
Acquisition Cost 35,000.00 450,000.00
Useful Life 3 years 5 years
Salvage Value - 5,000.00
Acquisition Date October 2 June 15
Used Life 3 months 7 months

Cost 35,000.00 450,000.00

SV 5,000.00
Depreciable Amt 35,000.00 445,000.00
Useful Life 36.00 60.00
Monthly Depreciation 972.22 7,416.67

Total Depreciation 2,916.67 51,916.67

b Date of Payment June 2

Used Rent 7 months

Prepaid Rent ( 12 months) 60,000.00

Monthly Rent 5,000.00
Used Rent ( 7 months) 35,000.00

d Date of Issuance October 1

Principal 300,000.00
Annual Interest Rate 12%
Formula Principal x Interest Rate x Period

Interest = Principal x Interest rate x Period

= 300,000.00 x 12% x 3/12
9,000.00

g Supplies Purchased 10,000.00

Oh hand supplies , end 2,000.00
Used Supplies for the year 8,000.00
Insurance premium 16,000.00
payment Date July 1
Lapsed Period 6 months

To compute expired insurance portion :

Insurance premium 16,000.00

Monthly amortization 1,333.33
Used Insurance ( 6 months) 8,000.00
1-15 with depreciation on the month when the item was acquired
16-31 depreciation is recorded on the next period/month
GENERAL JOURNAL

Page 1

Date Account Titles and Explanation P.R Debit Credit

1 2021
2
3 June 1 Cash 110 250,000.00
4 Williams, Capital 310 250,000.00
5 To record Williams investment in the business
6
7 '2 Prepaid Rent 130 60,000.00
8 Cash 110 60,000.00
9 To record payment for one year rent
10
11 '15 Delivery Equipment 170 450,000.00
12 Cash 110 50,000.00
13 Accounts Payable 210 400,000.00
14 To record purchased delivery van
15
16 '20 Cash 110 25,000.00
17 Delivery Revenues 410 25,000.00
18 To record cash payments from customers
19
20 July 1 Prepaid Insurance 140 16,000.00
21 Cash 110 16,000.00
22 To record payment for one year insurance premiums
23
24 '6 Advertising Expense 540 3,500.00
25 Accounts Payable 210 3,500.00
26 To record the advertising bill
27
28 '17 Accounts Receivables 120 6,200.00
29 Delivery Revenues 410 6,200.00
30 To record billed service to Malungkot Surgical Supply
31
32 '29 Telephone Expense 530 1,000.00
33 Cash 110 1,000.00
34 To record payment of telephone bill
35
36 August 2 Fuel Expenses 550 1,500.00
37 Cash 110 1,500.00
38 To record payment of gas and oil expenses
39
40 '4 Accounts Payable 210 3,500.00
41 Cash 110 3,500.00
42 To record settlement of liability to Masaya News
43
44 '11 Cash 110 39,000.00
45 Delivery Revenues 410 39,000.00
46 To record cash payments from customers
47
48 September 8 Williams, Withdrawals 320 25,000.00
49 Cash 110 25,000.00
50 To record withdrawals of Williams
51
52 '13 Cash 110 4,000.00
53 Accounts Receivables 120 4,000.00
54 To record partial collection from Malungkot Surgical Supply
SUB-TOTAL 884,700.00 884,700.00

Page 2

Date Account Titles and Explanation P.R Debit Credit

1 2021 BALANCE FORWARDED 884,700.00 884,700.00

2
3September 29Salaries Expense 510 10,000.00
4 Cash 110 10,000.00
5 To record payment of salaries to part timers
6
7 October 1 Cash 110 300,000.00
8 Notes Payables 230 300,000.00
9 To record loan to BPI
10
11 '2 Office Equipment 160 35,000.00
12 Cash 110 20,000.00
13 Accounts Payables 210 15,000.00
14 To record the purchased equipment
15
16 '10 Office Supplies 150 10,000.00
17 Accounts Payables 210 10,000.00
18 To record the purchased supplies to Shine Merchandising
19
20 November 2 Accounts Payables 210 15,000.00
21 Cash 110 15,000.00
22 To record full payment to MJK Trading
23
24 December 6 Cash 110 25,000.00
25 Unearned Revenues 240 25,000.00
26 To record advance payment from customers
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
GRAND TOTAL 1,279,700.00 1,279,700.00
Williams Delivery Service
Unadjusted Trial Balance
December 31, 2021

Acct. No Account Titles Debit Credit

110 Cash P 441,000.00

120 Accounts Receivables 2,200.00
130 Prepaid Rent 60,000.00
140 Prepaid Insurance 16,000.00
150 Office Supplies 10,000.00
160 Office Equipment 35,000.00
170 Delivery Equipment; 450,000.00
210 Accounts Payable; P 410,000.00
230 Notes Payables; 300,000.00
240 Unearned Revenues; 25,000.00
310 Williams, Capital; 250,000.00
320 Williams, Withdrawals; 25,000.00
410 Delivery Revenues; 70,200.00
510 Salaries Expense; 10,000.00
530 Telephone Expense, 1,000.00
540 Advertising Expense 3,500.00
550 Fuel Expense 1,500.00
Totals P 1,055,200.00 P 1,055,200.00
GENERAL JOURNAL

Page 3

Date Account Titles and Explanation P.R Debit Credit

1 2021
2
3 December 31Depreciation Expense - Delivery Equipment 592 51,916.67
4 Depreciation Expense - Office Equipment 590 2,916.67
5 Accumulated Depreciation - Delivery Equipment 175 51,916.67
6 Accumulated Depreciation - Office Equipment 165 2,916.67
7 To record depreciation for the year 2021
8
9 Rent Expense 520 35,000.00
10 Prepaid Rent 130 35,000.00
11 To record used rental payments ftm of June to Dec 2021
12
13 Interest Expense 580 9,000.00
14 Interest Payable 220 9,000.00
15 To record interest on notes ftp of Oct to Dec 2021
16
17 Unearned Revenues 240 5,000.00
18 Delivery Revenues 410 5,000.00
19 To record realized advance payment
20
21 Salaries Expense 510 35,000.00
22 Salaries Payable 250 35,000.00
23 To record unpaid salaries
24
25 Office Supplies Expense 560 8,000.00
26 Office Supplies 150 8,000.00
27 To record used supplies for the year
28
29 Insurance Expense 570 8,000.00
30 Prepaid Insurance 140 8,000.00
31 To record expired portion of insurance (6 months)
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
SUB-TOTAL 154,833.34 154,833.34
GENERAL LEDGER

Account : Cash Account No : 110

Date Explanation J.R Debit Credit Balance
1 2021
2 June 1 Initial Investment (Financing) J-1 250,000.00 250,000.00
3 '2 Advance Rent (Operating) J-1 60,000.00 190,000.00
4 '15 Delivery Van Payment (Investing) J-1 50,000.00 140,000.00
5 '20 Receipts from Client J-1 25,000.00 165,000.00
6 July 1 Prepaid Insurance (Operating) J-1 16,000.00 149,000.00
7 '29 Telephone bill payt (Operating) J-1 1,000.00 148,000.00
8 August 2 Fuel payments (Operating) J-1 1,500.00 146,500.00
9 '4 Settlement of Advertising bill(AP) (OperatingJ-1 3,500.00 143,000.00
10 '11 Receipts from Client J-1 39,000.00 182,000.00
11 September 8 Withdrawals (Financing) J-1 25,000.00 157,000.00
12 '13 Partial Collection of AR J-1 4,000.00 161,000.00
13 '29 Paid Salaries (Operating) J-2 10,000.00 151,000.00
14 October 1 Issued Notes (Financing) J-2 300,000.00 451,000.00
15 '2 Partial Payt of OE (Investing) J-2 20,000.00 431,000.00
16 November 2 Full Payt of OE (Investing) J-2 15,000.00 416,000.00
17 December 6 Adv payt from customers J-2 25,000.00 441,000.00
18
19 GRAND TOTAL 643,000.00 202,000.00 441,000.00

Account : Account Receivable Account No : 120

Date Explanation J.R Debit Credit Balance
1 2021
2 July 17 J-1 6,200.00 6,200.00
3 September 13 J-1 4,000.00 2,200.00
4 2,200.00
5
6
7
8 GRAND TOTAL 6,200.00 4,000.00 2,200.00

Account : Prepaid Rent Account No : 130

Date Explanation J.R Debit Credit Balance
1 2021
2 June 2 J-1 60,000.00 60,000.00
3 December 31 Used Rent J-3 35,000.00 25,000.00
4
5
6
7
8 GRAND TOTAL 60,000.00 35,000.00 25,000.00

Account : Prepaid Insurance Account No : 140

Date Explanation J.R Debit Credit Balance
1 2021
2 July 1 J-1 16,000.00 16,000.00
3 December 31 Expired J-3 8,000.00 8,000.00
4
5
6
7
8 GRAND TOTAL 16,000.00 8,000.00 8,000.00

Account : Office Supplies Account No : 150

Date Explanation J.R Debit Credit Balance
1 2021
2 October 10 J-2 10,000.00 10,000.00
3 December 31 Used Supplies J-3 8,000.00 2,000.00
4
5
6
7
8 GRAND TOTAL 10,000.00 8,000.00 2,000.00
9

Account : Office Equipment Account No : 160

Date Explanation J.R Debit Credit Balance
1 2021
2 October 1 J-2 35,000.00 35,000.00
3
4
5
6
7
8 GRAND TOTAL 35,000.00 - 35,000.00

Account : Accumulated Depreciation-Office Equipment Account No : 165

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 2,916.67 2,916.67
3
4
5
6
7
8 GRAND TOTAL - 2,916.67 2,916.67

Account : Delivery Equipment Account No : 170

Date Explanation J.R Debit Credit Balance
1 2021
2 June 15 J-1 450,000.00 450,000.00
3 450,000.00
4 450,000.00
5 450,000.00
6
7
8 GRAND TOTAL 450,000.00 - 450,000.00

Account : Accumulated Depreciation-Delivery Equipment Account No : 175

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 51,916.67 51,916.67
3
4
5
6
7
8 GRAND TOTAL - 51,916.67 51,916.67

Account : Accounts Payables Account No : 210

Date Explanation J.R Debit Credit Balance
1 2021
2 June 15 J-1 400,000.00 400,000.00
3 July 6 J-1 3,500.00 403,500.00
4 August 4 J-1 3,500.00 400,000.00
5 October 2 J-2 15,000.00 415,000.00
6 October 10 J-2 10,000.00 425,000.00
7 November 2 J-2 15,000.00 410,000.00
8
9 GRAND TOTAL 18,500.00 428,500.00 410,000.00

Account : Interest Payables Account No : 220

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 9,000.00 9,000.00
3 9,000.00
4 9,000.00
5
6
7
8 GRAND TOTAL - 9,000.00 9,000.00

Account : Notes Payables Account No : 230

Date Explanation J.R Debit Credit Balance
1 2021
2 October 1 J-2 300,000.00 300,000.00
3 300,000.00
4
5
6
7
8 GRAND TOTAL - 300,000.00 300,000.00

Account : Unearned Revenues Account No : 240

Date Explanation J.R Debit Credit Balance
1 2021
2 December 6 J-2 25,000.00 25,000.00
3 '31 Realized Revenue J-3 5,000.00 20,000.00
4
5
6
7
8 GRAND TOTAL 5,000.00 25,000.00 20,000.00

Account : Salaries Payable Account No : 250

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 35,000.00 35,000.00
3 35,000.00
4
5
6
7
8 GRAND TOTAL - 35,000.00 35,000.00

Account : Williams, Capital Account No : 310

Date Explanation J.R Debit Credit Balance
1 2021
2 June 1 J-1 250,000.00 250,000.00
3 December 31 To close income summary J-4 90,633.34 159,366.66
4 '31 To close withdrawal account J-4 25,000.00 134,366.66
5
6
7
8 GRAND TOTAL 115,633.34 250,000.00 134,366.66
9

Account : Williams, Withdrawals Account No : 320

Date Explanation J.R Debit Credit Balance

1 2021
2 September 8 J-1 25,000.00 25,000.00
3 December 31 Closing entries J-4 25,000.00 -
4
5
6
7
8 GRAND TOTAL 25,000.00 25,000.00 -

Account : Income Summary Account No : 330

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 To close expense accounts J-4 165,833.34 - 165,833.34
3 To close income accounts J-4 75,200.00 - 90,633.34
4 To close the income summary J-4 90,633.34 -
5
6
7
8 GRAND TOTAL 165,833.34 165,833.34 -

Account : Delivery Revenues Account No : 410

Date Explanation J.R Debit Credit Balance

1 2021
2 June 20 J-1 25,000.00 25,000.00
3 July 17 J-1 6,200.00 31,200.00
4 August 11 J-1 39,000.00 70,200.00
5 December 31 J-3 5,000.00 75,200.00
6 '31 Closing entries J-4 75,200.00 -
7
8 GRAND TOTAL 75,200.00 75,200.00 -

Account : Salaries Expense Account No : 510

Date Explanation J.R Debit Credit Balance

1 2021
2 September 29 J-2 10,000.00 10,000.00
3 December 31 Unpaid Salaries J-3 35,000.00 45,000.00
4 '31 Closing entries J-4 45,000.00 -
5
6
7
8 GRAND TOTAL 45,000.00 45,000.00 -

Account : Rent Expense Account No : 520

Date Explanation J.R Debit Credit Balance

1 2021
2 December 31 J-3 35,000.00 35,000.00
3 '31 Closing entries J-4 35,000.00 -
4
5
6
7
8 GRAND TOTAL 35,000.00 35,000.00 -

Account : Telephone Expense Account No : 530

Date Explanation J.R Debit Credit Balance
1 2021
2 July 29 J-1 1,000.00 1,000.00
3 '31 Closing entries J-4 1,000.00 -
4
5
6
7
8 GRAND TOTAL 1,000.00 1,000.00 -

Account : Advertising Expense Account No : 540

Date Explanation J.R Debit Credit Balance
1 2021
2 July 6 J-1 3,500.00 3,500.00
3 '31 Closing entries J-4 3,500.00 -
4
5
6
7
8 GRAND TOTAL 3,500.00 3,500.00 -

Account : Fuel Expense Account No : 550

Date Explanation J.R Debit Credit Balance
1 2021
2 August 2 J-1 1,500.00 1,500.00
3 '31 Closing entries J-4 1,500.00 -
4 -
5
6
7
8 GRAND TOTAL 1,500.00 1,500.00 -

Account : Office Supplies Expense Account No : 560

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 8,000.00 8,000.00
3 '31 Closing entries J-4 8,000.00 -
4
5
6
7
8 GRAND TOTAL 8,000.00 8,000.00 -

Account : Insurance Expense Account No : 570

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 8,000.00 8,000.00
3 '31 Closing entries J-4 8,000.00 -
4
5
6
7
8 GRAND TOTAL 8,000.00 8,000.00 -

Account : Interest Expense Account No : 580

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 9,000.00 9,000.00
3 '31 Closing entries J-4 9,000.00 -
4
5
6
7
8 GRAND TOTAL 9,000.00 9,000.00 -

Account : Depreciation Expense – Office Equipment Account No : 590

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 2,916.67 2,916.67
3 '31 Closing entries J-4 2,916.67 - 0.00
4
5
6
7
8 GRAND TOTAL 2,916.67 2,916.67 - 0.00

Account : Depreciation Expense – Delivery Equipment Account No : 592

Date Explanation J.R Debit Credit Balance
1 2021
2 December 31 J-3 51,916.67 51,916.67
3 '31 Closing entries J-4 51,916.67 -
4
5
6
7
8 GRAND TOTAL 51,916.67 51,916.67 -
Williams D
Wo
For the Year End

Unadjusted Trial Balance Adjustme

No Account Title Debit Credit

110 Cash 441,000.00

120 Accounts Receivables 2,200.00
130 Prepaid Rent 60,000.00
140 Prepaid Insurance 16,000.00
150 Office Supplies 10,000.00
160 Office Equipment 35,000.00
165 Accumulated Depreciation-Office Equipment -
170 Delivery Equipment; 450,000.00
175 Accumulated Depreciation-Delivery Equipment
210 Accounts Payable 410,000.00
220 Interest Payables
230 Notes Payables 300,000.00
240 Unearned Revenues 25,000.00 e
250 Salaries Payable
310 Williams, Capital 250,000.00
320 Williams, Withdrawals 25,000.00
410 Delivery Revenues 70,200.00
510 Salaries Expense 10,000.00 f
520 Rent Expense b
530 Telephone Expense 1,000.00
540 Advertising Expense 3,500.00
550 Fuel Expense 1,500.00
560 Office Supplies Expense g
570 Insurance Expense
580 Interest Expense d
590 Depreciation Expense -Office Equipment a&c
592 Depreciation Expense -Delivery Equipment a&c
1,055,200.00 1,055,200.00
Net Loss
Williams Delivery Service
Worksheet
For the Year Ended December 31,2021

Adjustments Adjusted Trial Balance Income Statement

Debit Credit Debit Credit Debit Credit

441,000.00
2,200.00
b 35,000.00 25,000.00
8,000.00 8,000.00
g 8,000.00 2,000.00
35,000.00 -
a&c 2,916.67 2,916.67
450,000.00 -
a&c 51,916.67 51,916.67
410,000.00
d 9,000.00 9,000.00
- 300,000.00
5,000.00 20,000.00
f 35,000.00 35,000.00
- 250,000.00
25,000.00
e 5,000.00 - 75,200.00 75,200.00
35,000.00 45,000.00 45,000.00
35,000.00 35,000.00 35,000.00
1,000.00 1,000.00
3,500.00 3,500.00
1,500.00 1,500.00
8,000.00 8,000.00 8,000.00
8,000.00 8,000.00 8,000.00
9,000.00 9,000.00 9,000.00
2,916.67 2,916.67 2,916.67
51,916.67 51,916.67 51,916.67
154,833.34 154,833.34 1,154,033.34 1,154,033.34 165,833.34 75,200.00
90,633.34
165,833.34 165,833.34
Balance Sheet
Debit Credit

441,000.00
2,200.00
25,000.00
8,000.00
2,000.00
35,000.00 -
2,916.67
450,000.00 -
51,916.67
410,000.00
9,000.00
- 300,000.00
20,000.00
35,000.00
250,000.00
25,000.00

988,200.00 1,078,833.34
90,633.34
1,078,833.34 1,078,833.34
Williams Delivery Service
Statement of Financial Performance
For the Year Ended December 31, 2021

Revenues
Delivery Revenues P 75,200.00
Total P 75,200.00

Expenses
Salaries Expense P 45,000.00
Rent Expense 35,000.00
Telephone Expense 1,000.00
Advertising Expense 3,500.00
Fuel Expense 1,500.00
Office Supplies Expense 8,000.00
Insurance Expense 8,000.00
Interest Expense 9,000.00
Depreciation Expense -Office Equipment 2,916.67
Depreciation Expense -Delivery Equipmen 51,916.67
Total 165,833.34
Net Loss P (90,633.34)
Williams Delivery Service
Statement of Changes in Equity
For the Year Ended December 31, 2021

Williams, Owner's Equity , 6/1/2021 P 250,000.00

Add : Additional Investment P -
Less : Net Loss (90,633.34) (90,633.34)
Total P 159,366.66
Less : Withdrawals 25,000.00
Williams, Owner's Equity , 12/31/2021 P 134,366.66
Williams Delivery Service
Statement of Financial Position
As of December 31, 2021

Assets

Current Assets
Cash P 441,000.00
Accounts Receivables 2,200.00
Prepaid Rent 25,000.00
Prepaid Insurance 8,000.00
Office Supplies 2,000.00
Total Current Assets P 478,200.00

Property, Plant and Equipment (Net)

Office Equipment P 35,000.00
Less: Accumulated Depreciation-Office Equipment 2,916.67 P 32,083.33
Delivery Equipment 450,000.00
Less : Accumulated Depreciation-Delivery Equipment 51,916.67 398,083.33 430,166.66
Total Assets P 908,366.66

Liabilities and Owner's Equity

Current Liabilities
Accounts Payable P 410,000.00
Interest Payables 9,000.00
Notes Payables 300,000.00
Unearned Revenues 20,000.00
Salaries Payable 35,000.00
Total Current Liabilities P 774,000.00

Owner's Equity
Williams, Capital 134,366.66
Total Liabilities and Owner's Equity P 908,366.66
Williams Delivery Service
Statement of Cash Flows
For the Year Ended December 31, 2021

Cash Flows from Operating Activities :

Cash Received from Client P 93,000.00
Payments to employees (10,000.00)
Payment for office rent (60,000.00)
Payment for insurance (16,000.00)
Payment for utilities (1,000.00)
Payment of fuels (1,500.00)
Payment for advertisements (3,500.00)
Net Cash provided by (used in) operating activities P 1,000.00
Cash Flows from Investing Activities :
Payments to acquire office equipments P (35,000.00)
Payments to acquire delivery equipment (50,000.00)
Net Cash provided by (used in) investing activities (85,000.00)
Cash Flows from Financing Activities :
Cash received as investment of owners P 250,000.00
Cash received from borrowings 300,000.00
Payment for withdrawals by owner (25,000.00)
Net Cash provided by (used in) financing activities 525,000.00
Net Increase (Decrease) in Cash P 441,000.00
Cash balance at the beginning of the period -
Cash balance at the end of the period P 441,000.00
GENERAL JOURNAL

Page 4

Date Account Titles and Explanation P.R Debit Credit

1 2021
2
3 December 31 Income Summary 330 165,833.34
4 Salaries Expense 510 45,000.00
5 Rent Expense 520 35,000.00
6 Telephone Expense 530 1,000.00
7 Advertising Expense 540 3,500.00
8 Fuel Expense 550 1,500.00
9 Office Supplies Expense 560 8,000.00
10 Insurance Expense 570 8,000.00
11 Interest Expense 580 9,000.00
12 Depreciation Expense -Office Equipment 590 2,916.67
13 Depreciation Expense -Delivery Equipment 592 51,916.67
14 To close expense accounts
15
16 Delivery Revenues 410 75,200.00
17 Income Summary 330 75,200.00
18 To close income accounts
19
20 Williams, Capital 310 90,633.34
21 Income Summary 330 90,633.34
22 To close the income summary accounts
23
24 Williams, Capital 310 25,000.00
25 Williams, Withdrawals 320 25,000.00
26 To close withdrawal account
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
SUB-TOTAL 356,666.68 356,666.68
Williams Delivery Service
Post-Closing Trial Balance
December 31, 2021

Acct. No Account Titles Debit Credit

110 Cash P 441,000.00

120 Accounts Receivables 2,200.00
130 Prepaid Rent 25,000.00
140 Prepaid Insurance 8,000.00
150 Office Supplies 2,000.00
160 Office Equipment 35,000.00
165 Accumulated Depreciation-Office Equipment P 2,916.67
170 Delivery Equipment; 450,000.00
175 Accumulated Depreciation-Delivery Equipment 51,916.67
210 Accounts Payable 410,000.00
220 Interest Payables 9,000.00
230 Notes Payables 300,000.00
240 Unearned Revenues 20,000.00
310 Salaries Payable 35,000.00
320 Williams, Capital 134,366.66
Totals P 963,200.00 P 963,200.00