Actbas1 Answer Key.docx

True or False 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

False – No effect to equity. False – Temporary withdrawal, not permanent. True False – Recorded at gross. False – Switch endorser and endorsee. True False – Liquidity False – Credit on income summary. True False – Not always. False False False False False False True False False True

Problem Solving 1. Principal (80,000 x .70) Interest (56,000 x .12 x 90/360) Maturity value

Maturity value Discount (SQUEEZE) Net proceeds

Maturity value Discount period Discount rate (SQUEEZE) Discount

₱56,000 1,680 ₱57,680

₱57,680 (1081.50) ₱56,598.50

₱57,680 45/360 .15 ₱1081.50

2. Basic pay (8 x 400 x 20) Overtime pay (2 x 4 x 400 x 1.3) Gross pay

₱64,000 4,160 ₱68,160

3. Gross pay (68,160/2) SSS Philhealth Pag-ibig Withholding Tax (SQUEEZE) Net pay

₱34,080 (350) (275) (100) (10,006.50) ₱23,348.50

4. Capital, beg. (100,500 – 42,700) Additional investment Net Income Withdrawals (SQUEEZE)

₱57,800 20,000 30,000 (24,120)

Capital, end. (100,500 x 1.3 – 42,700 x 1.1)

₱83,680

Allowance for doubtful accounts (146,400 – 5,800) Divided by: Accounts receivable % uncollectible % collectible (1 – 0.2)

₱140,600

Note Receivable Add: Interest Maturity Value Multiply by: Period Discount rate Discount

P 75000 2125 77125 40/360 0.15 P 1285.42

5.

703,000 0.20 0.80

6.

7. Maturity Value Interest Expense Proceeds

P 77125 1285.42 P 75839.58

8. Total revenues Total expenses Net income

P 319000 (235364) P 83636

9. Office Equipment Less: Accumulated Depreciation Furnitures and Fixtures Less: Accumulated Depreciation TOTAL 10. Balance of inventory Total inventory Amount of adjustment 11. Units delivered Units on hand Units sold Multiply by selling price Multiply by commission rate Commission Income 12. Depreciation of the old asset Equipment Depreciation ((150000-6000)/10)*6/12 Total depreciation for the fiscal year

P 250000 48000

P 202000

120000 14000

106000 P308000

P 5280 2520 P 2760

5000 (3500) 1500 P 350 0.2 P 105000

P 36000 7200 P 43200

13. Required rate of bad debts Required allowance Credit balance Additional allowance for bad debts

0.05 26000 (2000) P 24000

14. Customer One Two Three Four

Amount 50,000 90,000 35,000 100,000

% Doubtful 0.15 0.1 0.2 0.05

Total P 7,500 9,000 7,000 5,000

Req. Allowance for doubtful accounts, Dec. 31 Less: Allowance for doubtful accounts, Jan. 1

P 28,500 15,500

Doubtful Accounts Expense

P 13,000

15. Equipment A B C D

Partial Solutions whole CV to be expensed on its last year gain on sale = (2,400,000 x 2) - 2,400,000 annual depreciation = 4,800,000 / 4 annual depreciation = 8,000,000 / 8

Increase (Decrease) (1,600,000.00) 2,400,000.00 (1,200,000.00) (1,000,000.00)

Net Effect

(1,400,000.00)

16-17. Additional Investment Repayment of Loan Owner’s Drawing Cash Flow from Financing Activities Cash paid for purchase of equipment Cash from sale of land Cash flow from Investing Activities

P 10,000 (5,000) (2,000) P 3,000 P (22,000) 12,000 P (10,000)

18. Equity, end Net Income Withdrawals Equity, beg Assets, beg Liabilities, beg Multiply by: Ratio (75,000/150,000) Current Liabilities

Service Income Other Income Total Income

P 110,000 (40,000) 5,000 P 75,000 (150,000) P 75,000 0.50 P 37,500

Martha Repair Service Center Income Statement For the Year Ending December 31, 2013 Note P 970,000 1 46,500 P

1,016,500

Expenses Salaries Expense Depreciation Expense

P

162,000 66,000

SSS and Philhealth Premiums Expense 65,000 Supplies Expense 44,000 Utilities Expense 34,000 Doubtful Accounts Expense 23,000 Interest Expense 12,000 Net Income

(406,000) P

610,500

Martha Repair Service Center Statement of Changes in Owner's Equity For the Year Ending December 31, 2013 Martha, Capital - January 1 P 480,000 Add: Net income 610,500 Sub-total P 1,090,500 Less: Martha, Drawing (50,000) Martha, Capital - December 31 Php 1,040,500

Martha Repair Service Center Statement of Financial Position December 31, 2013 ASSETS Note Current Assets Cash Trade and Other Receivables Prepaid Expenses Total Current Assets Non-Current Assets Property, Plant and Equipment

P 2 3

686,750 290,200 110,000 P

4

990,000

TOTAL ASSETS LIABILITIES AND OWNER'S EQUITY Current Liabilities Trade and Other Payables Non-Current Liabilities Mortgage Payable Notes Payable (due after 4 years) Total Non-Current Liabilities

1,086,950

5

P

P

2,076,950

P

316,450

400,000 320,000 720,000

Total Liabilities

P

Owner's Equity Martha, Capital

1,040,500

TOTAL LIABILITIES AND OWNER'S EQUITY

P

Martha Repair Service Center Statement of Cash Flows For the Year Ending December 31, 2013 Cash flows from operating activites Receipts Cash collections from customers P 630,000 Interest income 16,000 Dividends income 13,000 Rent income 16,000 Payments For operating expenses (375,000) Interest expense (12,000) Net cash from operating activities Cash flows from investing activites Receipt From sale of furniture Payment For purchase of office equipment Net cash used by investing activities Cash flows from financing activites Receipt Proceeds from bank loan Payments For principal of loan Cash withdrawal by owner Net cash from financing activities Net increase/decrease in cash Cash balance - January 1 Cash balance - December 31

Note 1

Other Income Dividends Income Gain on Sale of Equipment Interest Income Rent Income Total Other Income

1,036,450

P

P

2,076,950

288,000

3,500 (42,000) (38,500)

P

468,000 (266,000) (50,000) 152,000 P

401,500 285,250 686,750

P

P

P

13,000 1,500 16,000 16,000 46,500

Note 2

Note 3

Note 4

Note 5

Trade and Other Receivables Accounts Receivable Allowance for Doubtful Accounts Notes Receivable Advances to Employees Accrued Rent Income Total Trade and Other Receivables

P

130,000 (34,000)

P

Prepaid Expenses Prepaid Insurace Prepaid Interest Supplies Total Prepaid Expenses Property, Plant and Equipment Buildings Less: Accumulated Depreciation Furniture and Fixtures Less: Accumulated Depreciation Office Equipment Less: Accumulated Depreciation Total Property, Plant and Equipment Trade and Other Payables Accounts Payable SSS and Philhealth Premiums Payable Pag-ibig Contributions Payable Unearned Interest Income Withholding Taxes Payable Total Trade and Other Payables

P

P

670,000 (65,000) 90,000 (15,000) 340,000 (30,000)

96,000 190,000 2,500 1,700 290,200

P

28,000 24,000 58,000 110,000

P

605,000 75,000

P

P

P

310,000 990,000

150,450 54,000 38,000 32,000 42,000 316,450