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Bong Lee, owner of Champion Forwarders, follows the calendar year for reporting the results of his
operations. The following adjustments are to be made on December 31 of the current year prior to
the preparation of his financial statements:
1. The Supplies Expense in the trial balance showed a balance of P 12,160. On this date, P 3,160
worth of supplies remain unused.
2. The Advertising Expense of P 18,000 reported in the trial balance was paid on November 1 of the
current year. The amount represents the advertisement for 3 months in the newspaper.
3. A one year fire insurance was taken on August 1 of the current year in the amount of P 12,000.
It was charged to Insurance Expense.
4. A 30-day 6% note for P 2,400 was received from a customer dated December 15 of the current
year.
5. Salaries of the employees are paid every 15 days. Unpaid salaries on December 31 amounted to
P 15,650.
6. The Office Equipment showed a balance of P 164,000 with accumulated depreciation of P 7,000.
On July 1, an equipment costing P 24,000 was acquired. The equipment is depreciated at 5% per
annum.
7. There is an outstanding 60-day 6% Note Payable amounting to P 14,000 dated December 1.
8. Furniture & fixtures having an estimated useful life of 10 years with no salvage value showed a
balance of P 48,000 with accumulated depreciation of P 4,800.
9. A tenant pays his monthly rental of P 3,000 on the 15th of each month. Rent income is credited.
10. The accounts receivable showed a balance of P 26,000 with Allowance for Impairment Loss of P
800. It is estimated that 4% of the accounts receivable are uncollectible.
11. The office rental is P 24,000 per month payable in advance every 15th day of the month. Rent
Expense is debited.
12. P 10,000 of the Service Income reported in the trial balance is still unearned.
13. The Delivery Van acquired 2 years ago costing P 800,000 with accumulated depreciation of P
80,000 is to be depreciated at the rate 5% per annum.
14. The loan with the bank amounting to P 120,000 taken on October 2 of the current year is
payable in 6 months with interest at 15% P.A.
15. On December 31, the bank statement showed a service charge of P 125. This has not yet been
recorded.
REQUIRED: Prepare the adjusting entries

8.6 Based on the following data, prepare the necessary adjusting entries, in general journal form,
at the end of the current calendar year. Each entry must have a date and a brief explanation.
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a. Salaries already earned by the employees but not yet paid as of December 31, P12,750.
b. Commission already earned but not yet collected as of December 31, P11,400.
c. Rent due and uncollected from the tenants for the month of December, P15,000.
d. Interest on notes payable, accrued and not yet paid, P1,250.
e. Interest on notes receivable, accrued and not yet collected, P2,200.
f. A 60-day, 12% note payable for P150,000, dated November 21, is outstanding as of December
31. Interest on the note is payable upon maturity.
g. A 30-day, 15% note receivable for P120,000, dated December 11, is outstanding as of December
31. Interest is collectible upon maturity of the note.
h. Service income that is significantly earned as of December 31, but not yet billed to the clients,
P45,500.
i. Fee for the services of a private consultant, not yet paid and recorded in the books, P10,000
j. Utilities already incurred but not yet billed and paid, estimated at P4,520.

F. Cesar Cifra operates an accounting firm. Shown below are selected accounts which appear in the
preliminary trial balance as of December 31, 200C and require adjustments:
Accounts Receivable P 22,500
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Allow. for Impairment Loss 1,200

Notes Receivable 20,000
Office Equipment 92,000
Accumulated Depreciation 4,500
Rental Income 12,000
Service Income 450,000
Supplies Expense 6,250
Insurance Expense 7,200
Salaries Expense 120,000
The following adjustments are to be made:
a. Unused office supplies at the end, P 320.
b. One-year insurance was paid on April 1 of the current year.
c. Office equipment has a useful life of 10 years with salvage value of P 2,000. It was acquired July
1, 200B.
d. Unearned rental income is 1/3 of the amount collected.
e. Service income not yet collected, P 3,000.
f. The 60-day 6% note was received on December 1.
g. Estimated bad debts, 10% of the accounts receivable.
h. Accrued salaries, P 12,000.
REQUIRED: Prepare the adjusting entries

9.11 The unadjusted trial balance of Rosales Brokerage, as of December 31 of the current year,
shows the following account balances:
Allowance for doubtful accounts, P4,000
Accumulated depreciation — Furniture, P24,800
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Unexpired insurance, P12,000

Office supplies expense, P5,220
Rent expense, P140,000
Advertising expense, P18,000
Salaries expense, P155,600
Interest expense, P1,500
Interest income, P2,400
Unearned commission income, P8,300
Additional information gathered as of December 31, before the preparation of the financial
statements, is shown as follows:
a. The allowance for doubtful accounts should have a balance of P7,500.
b. Depreciation of the furniture during the year is computed at P12,400.
c. Unexpired insurance as of December 31 is P7,500.
d. Office supplies used during the year amounted to P4,550
e. Rent for January and February of the following year was paid during the current year.
f Prepaid advertising as of the end of the current year is P3,000.
g. Salaries incurred but still unpaid is P4,400.
h. Interest paid in advance, pertaining to the following year is P300.
i. Interest accrued on the notes payable is P250.
j. Interest collected in advance but not yet earned is P450.

9.13 Based on the following data, prepare the necessary adjusting entries (in general journal form)
at the end of the current calendar year. Each must have a date and a brief explanation.
a. Interest paid on a bank loan, debited to interest expense account, for the period of 90 days from
December 11, amounted to P900.
b. Interest collected and credited to interest income account, for the period of 45 days from
December 16, P1,800.
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c. Store supplies debited to the store supplies expense account during the year, P28,750. As of
December 31, P11,500 is unused.
d. Store supplies debited to the prepaid store supplies account during the year, P28,750. As of
December 31, P17,250 is used.
e. Of the P12,000 balance of the insurance expense account, P9,000 expired during the current
year.
f. Of the P12,000 balance of the unexpired insurance account, P9,000 expired during the current
year.
g. Of the P7,550 balance of the royalty income account, P2,800 is earned during the current year.
h. Of the P7,550 balance of the unearned royalty income account, P2,800 is earned during the
current year.
i. Rent for six months from October 16 was paid and recorded under the rent expense account,
P90,000.
j. Rent for six months from August 1 was collected and recorded under the rent income account,
P60,000.
k. Rent for three months from December 1 was collected and recorded under the unearned rent
income account, P60,000.
l. Doubtful accounts receivable is estimated at 2 ½ % of income earned. Total income earned
during the year amounted to P1,400,400.
m. Doubtful accounts receivable is estimated at 1 ½ % of the balance of accounts receivable. As of
December 31 of the current year, the trial balance of the enterprise reflects: accounts receivable,
P225,000 and allowance for doubtful accounts, P1,500.
n. Furniture costing P24,800 was acquired on April 1 of the current year. It has an estimated scrap
value of P4,800 at the end of its useful life of 5 years.
o. Office equipment costing P46,000 what's acquired on January 5 of the current year. The
equipment was placed in actual use in the early part of April of the current year. The equipment
has an estimated scrap value of P4,000 at the end of its useful life of 7 years.