I.
The books of Bernardino Floral Décor Services showed among others the following accounts and
their balances as at December 31, 2018:
Cash 40,000
Accounts Receivable 75,000
Allowance for Bad Debts 2,500
Notes Receivable 17,500
Prepaid Insurance 3,750
Delivery Truck 325,000
Accumulated Depreciation 22,500
Accounts Payable 125,000
Notes Payable 75,000
Bernardino, Capital 175,000
Bernardino, Drawings 7,500
Service Income 1,400,000
Interest Income 6,250
Rent Expense 192,500
Salary Expense 1,128,000
Gas & Oil Expense 7,500
Supplies Expense 5,000
Interest Expense 4,500
The following additional information was given for you.
a. P500 worth of supplies are still unused at the end of the year.
b. The delivery truck was purchased March 31 of the previous year with an estimated life of 10 years
and salvage value of P25,000.
c. Prepaid insurance represents the balance of a 1-year premium expiring March 1, 2019.
d. The note was received from a customer on November 16, 2018 for` 90 days at 18% interest.
e. Semi-monthly payroll is payable on the 19th day of the month and 4th day of the following month.
Payroll for the period December 16 to 31 amounted to P98,000.
f. Service income represents floral arrangement for the church and the wedding reception. A couple
to be married early January gave an advance payment of P15,000, which was included in the service
income account.
g. The company estimates that 5% of accounts receivable may prove uncollectible.
h. The rent expense balance covers the 11-month period from January to November 2018.
i. The notes payable represents a 30-day P15,000 non-interest bearing note issued to a regular
supplier on December 16, 2018 and a six-month 10% note with a face value of P60,000 issued to
UCPB on September 1, 2018.
Required:
1) 10-column worksheet
2) Financial Statements (including Notes)
II. The bookkeeper of Raphael’s Bicycle Shop presented the following ledger accounts and their
balances as of December 31, 2018:
Cash in Bank 2,700,000
Cash on Hand 50,000
Accounts Receivable 3,000,000
Allowance for Bad Debts 150,000
Notes Receivable 900,000
Merchandise Inventory, 1/1 2,250,000
Prepaid Insurance 157,500
Store Furniture & Fixtures 4,000,000
Accumulated Depreciation – Store Furniture & Fixtures 125,000
Office Furniture & Fixtures 4,500,000
Accumulated Depreciation – Office Furniture & Fixtures 225,000
Accounts Payable 1,000,000
Notes Payable 450,000
Unearned Commissions 60,000
Mortel, Capital 10,697,500
Mortel, Drawings 75,000
Sales 17,800,000
Sales Returns & Allowances 130,000
Sales Discount 70,000
Purchases 10,500,000
Interest Income 25,000
Freight In 150,000
Purchase Returns & Allowances 75,000
Purchase Discounts 50,000
Advertising Expense 225,000
Rent Expense 1,050,000
Salaries Expense 850,000
Utilities Expense 35,000
Interest Expense 15,000
The following additional information for adjustments was given.
j. The allowance for bad debts should be increased to P250,000.
k. The notes received from customers consist of a 30-day 9% note for P700,000 dated December 10,
2018 and a 60-day P200,000 note dated December 5, 2018. No interest has been collected on
these notes.
l. The company has paid on July 1, 2018 insurance premium for a two-year policy effective on that
date.
m.The store furniture & fixtures are depreciated over a useful life of 5 years. Of those on hand as of
December 31, furniture costing P1,500,000 were acquired only on December 1, 2018. The office
furniture and fixtures are to be depreciated at a rate of 20% per annum.
n. Salaries of P137,500 have accrued as of December 31, 2018.
o. The enterprise has paid for a three-month advertising contract on November 1, 2018 for P225,000.
p. The notes payable represents a 60-day 18% note dated December 10, 2018 for which no interest
has yet been paid.
q. The company received commission amounting to P60,000 but only 1/3 of this has been earned.
r. Unsold merchandise, per physical count of December 31, 2018, amounted to 1/4 of the beginning
merchandise inventory.
Required:
1) 10-column worksheet
2) Financial Statements (including Notes)
“Whether you turn to the right or to the left, your ears will hear a voice behind you, saying,
‘This is the way; walk in it.”
Isaiah 30:21
