Search & Filtering
when writing out a journal entry, which is Usually the first line of information given?
- the name of the account to be credited
- the name of the account to be debited
- the narrative of the entry
- the name of the person making the journal entry
Problem Solving
BBC Company is closing its books and gathered the following items for its bank reconciliation:
a) Bank statement contains an ending balance of P290,500 on February 28, 2021, whereas the
company’s ledger shows an ending balance of P260,900
b) Bank statement contains a P100 service charge for maintaining the checking account
c) Bank statement contains interest income of P20
d) BBC issued checks of P50,000 that have not yet been cleared by the bank
e) BBC deposited P20,000 but this did not appear on the bank statement
f) BBC issued checks of P30,000 that have been cleared by the bank
g) BBC deposited P40,000 and this deposit appeared on the bank statement
h) A check for the amount of P470 issued to the office supplier was misreported in the cash payments
journal as P370.
i) A note receivable of P9,800 was collected by the bank.
j) A check of P520 deposited by the company has been charged back as NSF.
k) A monthly auto debit loan payment for P10,000 A refund of a previous bank charge P500
l) The bank has erroneously charged ABC company’s check worth P4,500 but was able to correct it
within the day as they balance and close their transactions.
Required:
1. Prepare a bank reconciliation using adjusted balance method.
2. Compute the total credit memo to be reflected on the reconciliation.
3. Compute the total debit memo to be reflected on the reconciliation.
4. Compute the total bank error.
5. Compute the total book error.
6. Compute the total outstanding checks.
7. Compute the total deposits in transit.
8. How much is the adjusted balance per book and per bank.
9. Prepare adjusting entries on the books of BBC company
You have just opened a bakery selling high-end muffins and would like to make $50,000 per year. :
You sell muffins in boxes of a dozen but you price each muffin at $3.00. Each muffin costs $0.30 in ingredients plus a 5¢ paper cup. Each shipping box costs $1.20.
Rent on the bakery is $2,000 per month and utilities are estimated at $700 each month. In addition, there is an annual health inspection fee which last year was $220.
a) With respect to the number of boxes of muffins, what kind of cost is the health inspection fee?
b) What is your contribution margin on each box of yummy tasty muffins?
c) How many boxes of muffins must you sell to reach your target profit?
nrise Limited purchased a helicopter for R4 500 000 at a residual value of R150 000 on 30 June 2015.
The helicopter is depreciated using the straight line method over 8 years.
Sunrise Limited uses the revalution model for its Property, Plant and Equipment. The business
purchased vehicles at the cost of R1 500 000 in 31 March 2014. Vehicles have 12 years useful life at
nil residual value. An independent valuator assessed the value of the helicopter and vehicles to be R4
300 000 and R1 300 000, respectively during the current year. These are the only two assets owned
by the company. The tax authorities account for wear and tear on the helicopter and vehicles of 20%
p.a and 10% p.a respectively, wear and tear is not apportioned.
Financial year-end is 31 December 2016
The tax rate is 30% p.a.
Required: (Show all your workings and round off final answers to the nearst whole number)
A. Use the Balance Sheet Approach to calculate the deferred tax which is applicable to each item from
the date of purchase and in addition prepare the Property, Plant and Equipment Note for Sunrise
Limited for the year ended 31 December 2016.
nrise Limited purchased a helicopter for R4 500 000 at a residual value of R150 000 on 30 June 2015.
The helicopter is depreciated using the straight line method over 8 years.
Sunrise Limited uses the revalution model for its Property, Plant and Equipment. The business
purchased vehicles at the cost of R1 500 000 in 31 March 2014. Vehicles have 12 years useful life at
nil residual value. An independent valuator assessed the value of the helicopter and vehicles to be R4
300 000 and R1 300 000, respectively during the current year. These are the only two assets owned
by the company. The tax authorities account for wear and tear on the helicopter and vehicles of 20%
p.a and 10% p.a respectively, wear and tear is not apportioned.
Financial year-end is 31 December 2016
The tax rate is 30% p.a.
Required: (Show all your workings and round off final answers to the nearst whole number)
A. Use the Balance Sheet Approach to calculate the deferred tax which is applicable to each item from
the date of purchase and in addition prepare the Property, Plant and Equipment Note for Sunrise
Limited for the year ended 31 December 2016.
1. Compute for the interest of a loan of P250,000 dated January 1, 2016 and payable on November 13, 2016 assuming the rate is 12% using the following: (20 points)
a. Actual Time-Exact Interest Method
b. Approximate Time-Exact Interest Method
c. Actual Time-Ordinary Interest Method
d. Approximate Time-Ordinary Interest Method
ABC Ltd acquires 100 per cent of RedCarpet Ltd on 1 July 2021. ABC Ltd pays the shareholders of RedCrpet Ltd the following consideration: There are also legal fees of $95,000 involves in acquiring RedCarpet Ltd.
On July 1 2021 RedCarpet Ltd’s statement of financial position shows total assets of $300,000 and liabilities of $150,000. The fair value of the assets is $400,000.
Has any goodwill been acquired and, if so, how much?
Triple Strike, owned and managed by Mr. Brian, showed owner’s equity as of January 1, 2019 as P120,000. It is estimated that at December 31, 2019, total assets will be P400,000 and total liabilities P200,000. How much should be the 2019 projected profit or loss given the following additional information? Each case is to be considered as independent from the others:
a. Brian did not make any additional investment or withdrawal.
b. Brian made a cash withdrawal of P50,000 but no additional investment.
c. Brian made an additional investment of P125,000 but no cash withdrawal.
d. Brian made an additional investment of P125,000 and a cash withdrawal of P50,000.
Triple Strike, owned and managed by Mr. Brian, showed owner’s equity as of January 1, 2019 as P120,000. It is estimated that at December 31, 2019, total assets will be P400,000 and total liabilities P200,000. How much should be the 2019 projected profit or loss given the following additional information? Each case is to be considered as independent from the others:
a. Brian did not make any additional investment or withdrawal.
b. Brian made a cash withdrawal of P50,000 but no additional investment.
c. Brian made an additional investment of P125,000 but no cash withdrawal.
d. Brian made an additional investment of P125,000 and a cash withdrawal of P50,000.
Demand function for a normal good X is given as Qdx =4–0.4Px –0.2Py +0.3Pz +0.3M
where Qdx is quantity demanded for good X, Px is price of good X, Py and Pz are
prices of related goods, and M is income. Y is good Y and Z is good Z.
