Quick Notes in Basic SERVICING Accounting by John Leo A.

Grino

A. A review of Insurance policies showed that P6,800 is

unexpired at the year end.
TOPIC: ADJUSTING ENTRIES

Solution;
Use the Asset Method of Adjustment na kung saan
Reynaldo Gulane Cleaners
idedetermine natin kung magkano ang na expired sa ating
Trial Balance asset na Prepaid Insurance, sabi sa adjustment problem
May 31, 2013
P6,800 ang hindi pa na expired sa ating insurance tingan
muna natin ang ating Trial Balance it shows that 34,000
Account Titles Debit Credit yung total cost nung Prepaid Insurance,
Cash P 117,880
Accounts Receivable 264,940 Original Cost of insurance 34000
Prepaid Insurance 34,000
Less: Unexpired Portion 6,800
Cleaning Supplies 73,740
Total Expired Portion 27,200
Land 180,000
Adjustment Entry:
Building 1,850,000
Acc. Depreciation-Building P 456,000 Insurance Expense 27,200
Accounts Payable 204,000 Prepaid Insurance 27,200
Unearned Cleaning Revenues 16,000
Mortgage Payable 1,100,000 (Decrease in OE- Insurance expense recorded in debit, Decrease in
Gulane, Capital 565,000 Asset-Prepaid insurance recorded in credit)
Gulane, Withdrawals 100,000
Cleaning Revenues 1,576,340
Salaries Expense 1,013,300 Ibig sabihin may bagong account na nag exist na Insurance
Cleaning Equipment Rental Expense 60,000 Expense na 27,200 sapagkat ito ang expired portion while
Delivery Truck Expense 43,740 ang ating Prepaid Insurance na 34,000 ay magiging 6,800
Interest Expense 110,000 nalang sapagkat I mininus natin ang credit entry Prepaid
Other Expenses 70,340 Insurance sa debit entry nito
Total P3,917,940 P3,917,940
The following Information Occurred; B. An Inventory of cleaning supplies showed P12, 440 on
hand.
Solution;
Quick Notes in Basic SERVICING Accounting by John Leo A. Grino

Use the Asset Method of Adjustment na kung saan Ang Problem na ito ay patungkol sa na consume nating
idedetermine natin kung magkano ang nagamit natin sa amount sa paggamit ng isang Non-Current Asset.
ating asset na Cleaning Supplies, sabi sa adjustment
Adjustment Entry:
problem P12,440 ang hindi pa nagagamit sa ating Cleaning
Depreciation Expense-Building 128,000
Supplies tingan muna natin ang ating Trial Balance it shows
Accumulated Depreciation- Building 128,000
that 73,740 yung total cost nung Cleaning Supplies,
(Decrease in OE- Depreciation Expense-Building recorded in debit,
Total Cost of Cleaning Supplies 73,740 Decrease in Asset-Accumulated Depreciation-Building recorded in
Less: Unconsumed Portion 12,440 credit)
Total Consumed Portion 61,300
Adjustment Entry: Note: sa problem na ito given na ang depreciated value ng ating
Cleaning Supplies Expense 61,300 Non-Current Asset pero may problem din na kailangan mo mag
Cleaning Supplies 61,300 solve using Depreciation Formula;

(Decrease in OE- Cleaning Supplies Expense recorded in debit, D=C MINUS S DIVIDED BY N
Decrease in Asset-Cleaning Supplies recorded in credit)
Na kung saan

D=Depreciation
Ibig sabihin may bagong account na nag exist na Cleaning
Supplies Expense na 61,300 sapagkat ito ang consumed C= Cost o yung original price nung non-current asset
portion while ang ating Cleaning Supplies na 73,740 ay
magiging 12,440 nalang sapagkat I mininus natin ang credit S= Salvage Value o yung na consume na natin sa non-current asset
entry Cleaning Supplies sa debit entry nito N= Number of Useful Years o yung taon na kapakipakinabang pa ang non-
current asset.

D. Accrued Interest in Mortgage Payable is P10,000.

C. Estimated Depreciation on the building is P128,000

Solution; Solution:
Quick Notes in Basic SERVICING Accounting by John Leo A. Grino

Use the Liability Method of adjustments na kung saan Use the Liability Method of adjustments na kung saan
idedetermine natin kung magkano ba ang na accrued o idedetermine natin kung magkano ba ang na accrued o maari
maari nating ibayad na interest. nating bayaran na salary.

Adjustment Entry:
Adjustment Entry:
Salaries Expense P 16,800
Interest Expense P 10,000
Salaries Payable P 16,800
Interest Payable P 10,000
(Decrease in OE- Salaries Expense recorded in debit, Increase in
(Decrease in OE- Interest Expense recorded in debit, Increase in
Liability- Salaries Payable recorded in credit)
Liability- Interest Payable recorded in credit)

E. P 4000 of Cleaning Revenue was earned.

ACTIVITY 1:
Solution:
Bago tayo mag proceed sa Adjusted Trial Balance ikaw naman mag try
Use the Income Method of adjustments na kung saan mag adjust GAME!!!! Kuha ka nalang kahit anong Papel.
idedetermine natin kung magkano ba ang na earned na ba 1. On November 1 Mr. Santos paid 60,000php for a 3 month
talaga natin sa ating revenue. rental in advance. At the end of the Accounting Period there
is remaining 2 months that is not used.
Adjustment Entry: 2. A P 5000 Service Revenue is still unearned.
Unearned Cleaning Revenue P4000 3. On December 31, five days salary of an employee at P500
Cleaning Revenue P 4000 per day has been accrued.
4. A delivery Truck was purchased P250,000 . Estimated to last
(Decrease in Liability-Unearned Cleaning Revenue recorded in 10 years and have a salvage value of P 50,000.
Credit, Increase in OE- Cleaning Revenue recorded in credit) 5. An Inventory of cleaning supplies showed P23, 450 unused.

F. Salaries have been Accrued P 16,800 Trial Balance after adjustments

Quick Notes in Basic SERVICING Accounting by John Leo A. Grino

Reynaldo Gulane Cleaners

Adjusted Trial Balance The following Information occurred; next page please….

December 31, 2013

Culminating Activity: A. An examination of Insurance policies showed that

P 30,000 is expired at the year end.

Grino Accounting and Auditing Firm B. Office Supplies on hand P 1100.

Trial Balance

May 31, 2013 C. Accrued Auditors wages, P 100,000, and

Account Titles Debit Credit Accountants salaries 95,000.
Cash P 117,880
Account Titles Debit Credit
Accounts Receivable 264,940
Cash P 117,880
Prepaid Insurance 6,800
Accounts Receivable 264,940
Cleaning Supplies 12,440
Prepaid Insurance 34,280
Land 180,000
Building 1,850,000 Prepaid Advertising 20,000
Acc. Depreciation-Building P 584,000 Office Supplies 73,740
Accounts Payable 204,000 Land 180,000
Unearned Cleaning Revenues 12,000 Building 1,850,000
Mortgage Payable 1,100,000 Acc. Depreciation-Building P 456,000
Accounts Payable 204,000
Interest Payable 10,000
Unearned Service Revenues 16,880
Salaries Payable 16,800
Bonds Payable 1,100,000
Gulane, Capital 565,600
Grino, Capital 505,000
Gulane, Withdrawals 100,000
Grino, Withdrawals 100,000
Cleaning Revenues 1,580,340
Salaries Expense
Service Revenues 1,596,340
1,030,100
Salaries Expense 1,013,300
Cleaning Equipment Rental Expense 60,000
Delivery Truck Expense 43,740
Delivery Truck Expense 43,740
Insurance Expense 110,000
Interest Expense 120,000
Other Expenses 70,340
Other Expenses 70,340
Depreciation Expense-Building 128,000 Total P3,878,220 P3,878,220
Insurance Expense 27,200
Cleaning Supplies Expense 61,300
Total P4,072,740 P4,072,740
Quick Notes in Basic SERVICING Accounting by John Leo A. Grino

3. Salaries Expense 500

D. Estimated Depreciation Rate of Building 10%. Salaries Payable 500
4. Depreciation Expense-Delivery Truck 20,000
Accumulated Depreciation- Delivery Truck 20,000
E. Interest of 5% was accrued on Bonds Payable. 5. Cleaning Supplies Expense 23,450
Cleaning Supplies 23,450
Required: Prepare an Adjusting Jornal Entries and Adjusted
Trial Balance
Word of God:
Using the same Adjusted Trial Balance another set of data
incurred.
James 1:5’’ Ngunit kung nagkukulang
a. P 10,000 of Unearned Service Revenue have been earned. ng karunungan ang sinoman sa inyo,
ay humingi sa Dios, na nagbibigay ng
b. The building was originally purchased P 1, 850,000 . sagana sa lahat at hindi nanunumbat;
Estimated to last 10 years and have a salvage value of P100,000. at itoy ibibigay sa kaniya.’’
c. 60% of Prepaid Advertising is unexpired.

d. Salaries have been Accrued P 26,800

Required: Prepare an Adjusting Jornal Entries and Adjusted Statement of Cash Flows
Trial Balance
Ang statement of cash flows ay ginagamit para malaman at
maipaliwanag natin ang cash ledger natin na kung ano ba
ANSWER KEY FOR ACTIVITY 1 yung pumasok (INFLOW)at lumabas(OUTFLOW) na pera from
the business.Ating tandaan na gagamitin natin dito ang journal
1. Rent Expense 20,000 entries para Makita natin na para saan yung ating na entrada
Prepaid Rent 20,000 At ang lahat ng debit side ay inflow at credit side naman ng
2. Service Revenue 5,000 cash ang outflow, Kadalasang ginagamit ang indirect method
Unearned Service Revenue 5,000 ng cashflow na kinapapalooban ng tatlong activities
Quick Notes in Basic SERVICING Accounting by John Leo A. Grino

1. OPERATING ACTIVITIES FINANCING ACTIVITIES

2. INVESTING ACTIVITIES
3. FINANCING ACTIVITIES INFLOW

OPERATING ACTIVITIES - Cash na natanggap mo mula sa investment at sa loans

mo sa bank.
INFLOW(DEBIT)
OUTFLOW
- Cash na nakuha natin sa accounts receivable
- Cash na nakuha natin sa revenue dahil sa service na - Cash na nawala sayo due to withdrawal by the owner
ibinigay natin sa customers. at ipinambayad sa loans.

OUTFLOW(CREDIT)

- Cash na binayad sa suppliers dahil sa biniling supplies

- Cash na binayad sa mga operating expenses For request of handouts in other topics approach niyo lang
- Cash na binayad sa creditors ako, mas mabuti kasi ang mag impart ng knowledge sa iba
- Cash na binayad sa empleyado kaysa naman itago at ipagkait ito.

INVESTING ACTIVITIES

INFLOW
- Cash na natanggap mo sa pagpapabili ng mga ari arian
- Cash na natanggap mo from equity securities
- Cash na nakolekta mo sa notes receivable

OUTFLOW

- Cash na binayad mo sa pagbili ng iyong ari arian o nn

current assets.
- Cash na binayad mo sa equity security
 Quick Notes in Basic SERVICING Accounting by John Leo A. Grino

Sample Statement of Cash Flows FINANCIAL STATEMENTS MAPPING

ABM and GAS CASH INFLOW (Dr.) Account Titles Debit Credit
Cash
LESS (OUTFLOW)(Cr.) P 117,880 CASH FLOW
Statement of Cash Flows Accounts Receivable 264,940
Prepaid Insurance 34,000
For the month ended March 31,2018
Cleaning
ASSETS= LIABILITIES + Supplies 73,740
Cash Flows from Operating Activities EXPLANATION
OWNERS Land
EQUITY ORIGINAL ENTRY STATEMENT OF
180,000
Cash received from clients P 20 Building
CASH RECEIVED FROM CLIENTS CASH 1,850,000
FINANCIAL POSITION
Payment to Operating Expenses ( 5) Acc. Depreciation-Building ACCOUNTS RECEIVABLE P 456,000
Payment to creditors ( 3) Kung iisipin mong
Accounts Payable CASH
madali ang accounting at may tiwala 204,000
kang Unearned
tutulungan
BEGINNING CAPITAL LESS Cleaning
ka n Revenues
gating Diyos SERVICE INCOME
madadalian ka stay 16,000
Net Cash Provided by Operating Activities P 12 STATEMENT OF CHANGES
PAYMENT TO OPERATING
Mortgage EXPENSE
Payable NAME OF EXPENSE 1,100,000
Cash Flows from Investing Activities positive
WITHDRAWAL AND NET lang at iwasan ang kompetisyon di
CASH IN EQUITY
kasi
Cash received from selling of equipment P5 LOSS Gulane,
pagalingan
ADD ADDITIONAL
PAYMENT TO
Capital
CREDITORSang accounting patatagan
ACCOUNTS ito.
PAYABLE
565,000
Cash received from notes receivable 5 Gulane, Withdrawals CASH 100,000
INVESTMENT AND NET
Payment to Acquire Cars (2) Cleaning Revenues NOTE: KAPAG WALANG KAKONEK 1,576,340
PROFIT = ENDING CAPITAL
Salaries Expense
Net Cash Provided by Investing Activities 8 SA PRESENT 1,013,300
TRANSACTION.
Cash Flows from Financing Activities Cleaning
CASH RECEIVED FROM Equipment RentalCASH
SELLING OF Expense 60,000
STATEMENT OF
EQUIPMENT
REVENUE LESSDelivery
EXPENSES=Truck Expense EQUIPMENT43,740
Cash received from owners investment P8 FINANCIAL
CASH RECEIVED FROM
Interest NOTES
Expense CASH 110,000
Cash received from loans in bank 2 NET PROFIT( REVENUE IS
Payment to owners withdrawal ( 9) 1
RECEIVABLEOther Expenses
GREATER THAN 70,340PERFORMANCE
NOTES RECEIVABLE
PAYMENT TO EXPENSE)
ACQUIRED CARS CARS
Net Increase in Cash P21 Total CASH P3,917,940 P3,917,940
Cash balance, March 1, 2018 1 (NETCASH
LOSS) ( EXPENSE
RECEIVED FROMISOWNERS CASH
Cash balance, March 31, 2018 P22 GREATER THAN REVENUE)
INVESTMENT CAPITAL
CASH RECEIVED FROM LOANS IN CASH
NOTE: ANG CASH BALANCE SA UMPISA BANK LOANS PAYABLE
PAYMENT TO OWNERS WITHDRAWAL
NA MARCH 1, 2018 AY MAKUKUHA SA WITHDRAWAL CASH
BEGINNING BALANCE NG LEDGER.
TRIVIA IN IDENTIFYING THE ACCOUNTS INVOLVE IN DIFFERENT
FINANCIAL STATEMENTS.