Accounting Answers

I. Directions: Determine whether each of the following activities is operating, financing or

investing in nature.

1. Payments for purchases of inventories

2. Payment for current taxes

3. Sale of land owned by the entity with double revaluation surplus

4. Proceeds from long-term borrowings

5. Revenue from services

6. Payments for machineries bought from supplier

7. Repayment of long-term loans payable

8. Purchase of long-term investment from other company

9. Proceeds from sale of franchise

10. Payment of income tax expenses

A. Choose the letter that corresponds to the correct answer. (Determine the effect of the following transactions on Cash)

1. An increase in the balance of Prepaid Advertising

a. Positive c. No effect

b. Negative d. Adverse Effect

2. A decrease in taxes payable

a. Positive c. No effect

b. Negative d. Adverse effect

3. Initial investment by the owner

a. Positive c. No effect

b. Negative d. Adverse effect

4. Purchase of office equipment

a. Positive c. No effect

b. Negative d. Adverse effect

2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. 4. At the end of June, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a. Insurance expired during June is $200. b. Supplies on hand on June 30 are $650. c. Depreciation of office equipment for June is $250. d. Accrued receptionist salary on June 30 is $220. e. Rent expired during June is $2,000. f. Unearned fees on June 30 are $1,875. 5. Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the spreadsheet. 6. Journalize and post the adjusting entries. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owner’s equity, and a balance sheet. 9. Prepare and post the closing entries. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance.

Directions: a Statement of Comprehensive Income using the following format and calculated values:

The Mirriam Company has the following statement of comprehensive income balances at the end of the year.

Gross Profit = ₱ 2,580,750

Operating Profit = ₱ 1,554,330

Income Tax Expense = 25% of Operating Profit

Comprehensive Income = ₱ 2,000,000

construct a statement of comprehensive income which contains the determination of net income and comprehensive income for the period.

based on the given accounts below:

The Gelo Corporation has the following balances provided for the year 2020:

TOTAL ASSETS = ₱ 3,500,000

TOTAL LIABILITIES = 2,400,000

TOTAL CURRENT ASSETS = ₱ 2,350,000

TOTAL CURRENT LIABILITIES = ₱ 2,400,000

Directions: Construct a Statement of Financial Position in ACCOUNT FORM.

Accounts Receivable

Notes Payable

Unearned Revenue

Income Tax Payable

Comprehensive Income

Building

Land

Intangible Assets

Noncurrent Receivables

Owner’s Capital

Owner’s Withdrawal

Salaries Payable

Prepaid Expenses

Inventories

Interest Payable

Notes Receivable

II. Directions: Based on the following amounts of Lychee Company, prepare a cash flow

statement for the year ended 2020.

Cash balance, January 1, 2020 ₱ 300,000

Decrease in accounts receivable 85,000

Interest expense 55,500

Proceeds from sale of equipment 130,000

Payment of equity financing 65,000

Decrease in accounts payable 54,000

Increase in inventory 118,000

Proceeds from issuance of long-term bonds payable 250,000

Increase in salaries payable 125,000

Income tax expense 49,000

Payment for purchase of equipment 280,000

I. Directions: Determine whether each of the following activities are operating, financing or

investing in nature.

1.Payments for purchases of inventories

2.Payment for current taxes

3.Sale of land owned by the entity with double revaluation surplus

4.Proceeds from long-term borrowings

5. Revenue from services

6. Payments for machineries bought from supplier

7. Repayment of long-term loans payable

8. Purchase of long-term investment from other company

9. Proceeds from sale of franchise

10. Payment of income tax expenses

B. Statement of Comprehensive Income

Directions: Construct and improvise a Statement of Comprehensive Income using the following format and calculated values:

The Mirriam Company has the following SCI (Statement of Comprehensive Income) balances at the end of the year. Prepare an SCI (Statement of Comprehensive Income) which contains the determination of net income and comprehensive income for the period.

Gross Profit = ₱ 2,580,750

Operating Profit = ₱ 1,554,330

Income Tax Expense = 25% of Operating Profit

Comprehensive Income = ₱ 2,000,000

II. PROBLEM

1. Statement of Financial Position (10 points)

Directions: Improvise a Statement of Financial Position based from the given accounts below in ACCOUNT FORM.

The Gelo Corporation has the following balances provided for the year 2020:

TOTAL ASSETS = ₱ 3,500,000

TOTAL LIABILITIES = 2,400,000

TOTAL CURRENT ASSETS = ₱ 2,350,000

TOTAL CURRENT LIABILITIES = ₱ 2,400,000

Accounts Receivable

Notes Payable

Unearned Revenue

Income Tax Payable

Comprehensive Income

Building

Land

Intangible Assets

Noncurrent Receivables

Owner’s Capital

Owner’s Withdrawal

Salaries Payable

Prepaid Expenses

Inventories

Interest Payable

Notes Receivable

Directions: Answer the following questions with the most correct answer whether the selection is in multiple-choice or supply the answer.

Cost of Goods Sold, (COGS), can also be referred to as cost of sales (COS), cost of revenue, or product cost, depending on if it is a product or service. It includes all the costs directly involved in producing a product or delivering a service.

5. Which of the following is the correct formula in finding COGS or COS? (1 point)

a.The COS for manufacturing entities is zero because of its value in deflation.

b.The COS for merchandising entities is goods available for sale minus the ending

amount of inventories.

c.The COS for service entities is service available for sale plus the beginning

service inventories.

d.The COS for service entities is equal to the adjusted market selling price.

6. Explain why the three items you have not chosen above are incorrect.