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Solution Manual Intermediate Accounting

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192 views231 pages

Solution Manual Intermediate Accounting

Uploaded by

Soo Miya
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SOLUTION MANUAL, Intermediate Accounting Valix Peralta Valix VOLUME ONE - 2019 Edition CHAPTER 1 Problem Io Requirement 1 1, Accounts recivable 200,000 ‘Cashin bank 200000 1, Cashin bak 250,000 “Accounts payable 250000 Cash in bank 100.000 “Accounts payable 100.000 4. Accounts reccivable 450,000 Cash 450,000 ‘Requirement 2 ‘Cashin bank pr book 5,000,000 ‘Casemer check outstanding fr 18 months 200000 Undelivered check 250000 Ponda check delivered 100.000 Collection on January 2020 recorded on December 31, 2019 (430.000) “Adjusted cash in bank 700,000 ‘Tame deposit 30 ys 100.000 Petty cash fund TS “otal cash and cath equivalent am Requirement 3 “The money market placement of P2,000,000 duc on June 30,2020 should be separately shown as cument asset. The sinking fund of PI,$00,000 is presented as noncuerent asst. Problem 1-2 Requirement 1 4 Accounts receivable 130,000 (Cash on hand 130,000 . Expenses 10,00 Reverable from employee $000 Paty ash fund 15.000 "The BSP 120day tena bil 3,00, 000i separately shown as current ast. "The overeat in BDO current acount of P2000 shown as current Kai ‘The BPI Time deposit of P2000,000 i shown as nonce investment Bocuse itis esto for land sequin, Problem 1-3 Requirement 1 1 Accounts receivable (100,000 + 150,000) (Cash on band bi, Advances to employees Cash short or over Pest cash fund «Cash in bank (200,000 + 300,000) Accounts payable Requirement 2 Cash on hand [NSF ewstomer chock Pantated cuntorer check ‘Adjusted on hand Currency and coins ‘Check drawn payable to petty cashier ‘Adjusted pty cash Cash in bank Undtivered company check Postated company check delivered Adjusted cash in Bank Cash on hand ett cash fund (Cash in bank Saving deposit Taal cash 20,000 10,000 250,000 1.000 1,000,000 (100,000) Fee? exe KE 750,000 35,000) 4,500,000 Problem 1-4 Requirement 1 (Cath on band [NSF customer check Pontdated custome check ‘Adjusted cash on hand Petty cas fn: ‘Currency and coins Philippine Hank curent account Undelivered company check Pondated company check delivered ‘Adjusted balance ‘Cash on hand Petty cash fund Philippine Bank curent City Bunk curent accoust No. | City Bunk curent account No. 2 ‘Asst Bank saving deposit ‘Asia Bank time deposit ‘Tena cash and cash equivalent Requirement 2 1. Accounts receivable ‘Cash on hand 2, Receivable from officer Expenses Cath short or over Pty cash 3. Philippine Bank current ‘Accounts payable 4. City Bank curent Bank overdratt Problem 1-5 Procantng Pend Syste 1 ey cath fad 000 ‘Co inant 2 Posage Series S500 rape 200 Mosel epee ro} Peay cath 5. Pee et fin ‘Cah ink, 900 1300 1000 14000 $0,000 2.000 1.000 1,000 70,000 100,000 1. ay ah fd ‘Cahn ak 2 Neomy " (38.000) EEE $000,000 Es 130,000 3.000 5,070,000 4,000,000 100,000) 250,000 $0,000 15,000 100,000 ni i a8 1 Pty a fit 10900 ‘Cain ak 10,00 2 Nocmy 3 Neomy 4 rey ca ft 0000 "cua 900" Pestuge 1300 pony 300 eamgertaoe ‘00 Acres anal 3500 Can 19.0 Problem 1-7 ‘Pectuating Pond Sytem imprest Fund Sytem May 2 Rey cath in 0900 May 2 Pay cat find 1.000 ‘Cah in 0.000 ‘Cashak 10,00 2 Pasage 1.0 29 Postage 100 Sentcs 00 Sept 3000 Tenet | 20 Trasperaion 2500 Macetiowar epee 1500, Meccano epee 300) ey eas nd son yesh ond 0 Pay cat and 000 ‘Cah ak 00 June 30 Sapies 2000 ee Seppe 2000 Aah abe ‘0 ‘Acne pa {00 ‘Tramponason 00 ‘Tagore 00 ey anh ind som eyes od 000 aby 1 Pty a and 4000 “Sie 2.00 Pause {0 Tagen ‘0 “To reese the ade made en 30 ly 1S Sappen 1300 oes ‘oo ‘ranpraton| soo Niece soo ‘een and 00 ‘Coin ak Row Problem 1-8 2019 Now, 2. Petty cash fund Cast nba 30 Postage Sopplies Pty cash fund 1 Reveivabe fom employes 15 Noentry 31 Distribution costs 10.000, 2.000 5.000 10.000 3,000 ‘4.000 2.000 9,000 10,000 .000 i 5 1.500 50) 2.000 1,500 1200 11,000 17,000 9.000 3.000 4.000 2.000 19,000 9.000 670 Requirement 2 Petty cash Les: Pety cash expenses from December 21,2019 to January 31,2020: Distribution costs (1,500 + $00) Administrative expenses “Transportation (S00 + 1,000) Purchases Pent cash before replenishment Problem 1-10 Answer © Undelivered company check ‘Cash on hand (Change fund Adjusted balance Question? Answer © “Treasury bill Maney market placement Tosa cash equivalents Problem 1-17 (Question 1 Answer A Question 2 Answer A Coins and currency Accommodation cbeck Toval Problem 1-19 Answer © (Coins and currency Replenishment check Tol 2,000 2.000 11500 Eb EEE EES Problem 2-1 Balance per book ‘Add: CM for ate collected Toa Less: DM for service charge Adjusted book balance Balance per bank ‘Add: Deposit in transit ‘Tora Less: Outstanding checks: No. 102 105 107 Aaijusting entries: 1. Cash in bak Note recenable 2. Bank service charge ‘Cashin bank Problem 2-2 Balance per book ‘Add: CM for note collected ‘Taal Les: DM for service charge NSF check Book eror (52,000 - 25,000) Adjusted book balance Balance per bank ‘Add: Deposit in transit Erroneous bank debt ‘Toul Less: Outstanding checks: No. 770 7 ™ ‘Adjusted bank balance Adjusting entries: 1, Cash in bank ‘Note receivable 2. Bank service charge ‘Accounts payable ‘Cash in bank 5,000 10,000 60,000 20,000 30,000 45,000 '.000 5,000 10,000 27,000 EP REEE: Tss,000 30,000 2.000 155.000 135,000 30,000 Problem2-3 Balance per book ‘Add: CM For pote collected Toul Less: DM for service charge Adjusted book balance lance per bank ‘Add: Deposit in transit Total Les: Outstanding checks: ‘No. 116 oa 124 as Adjusted bank balance Adjusting entries 1.Cash in bank ‘Bank service charge Note receivable Irictest income 2. Bank service charge ‘Cash in bank Problem 2-4 Book balance ‘Add: Collection of note Anerest on note Blok eror on check no, 175 Total ‘Les: Bank service charge Payment for ight and water NSF check Adjusted book balance Bank balance ‘Add: Deposit in transit Total ‘Less: Bank er (Outstanding checks Adjusted bank balance Adjusting entries 1. Cash in bank ‘Note receivable Invsrest come ‘Accounts payable 2. Bank service charge Light and water Accounts rexcwable ‘Cashin bank 60,000 180,000 120.000 270,000 10,000 000 2.500.000 150.000 5.000 248,000 1,100,000 2,695,000 5,000 245,000 220,000 2,840,000 moe Teo 3.266.000 715.000 250,000 5,000 1.405.000 $100,000 2,500,000 130,000 45.000 470,000 Problem 2-5 | Balance per book ~ Apel 30 Credit memo for note collected ‘Outstanding chesks No. 1331 1332 133 1335 Tora! Less: Bank serve charge NSF check Undeposted collections Balance pet bank = April 30 ». Adjusting entries 1. Cash in bank ‘Note receivable 2. Bank sevice charge Accounts ecewable ‘Cash in bake «Balance per book - April 30, (CM for not collected ‘Bank service charge NSF check ‘Adjusted cash in bank 40,000 S000 25,000 60,900 5,000 25.000 380.000 $000 650,000 480,000 $.000 125,000 10 1,100,000 tone 7300.00 1,100,000 (5.000 3.500,000 ue T3000 270.000 180,000 2. Bank service charge ‘Accounts receivable ‘Cash in bake Problem 2-8 Balance per book ‘Add: Proceeds of bank lan Toval ‘Less: Understatement of checkin payment of account (20,0 20,0) Petty cash fund Adjusted book balance be 10,000 475,000 90,000 130,000 600,000 1378.00 ‘3.000 10,000 30,000 10.000 180,000 W 3:130,000 270,000 —isaoun Tssn,000 2,700,000 aso 475,000 4,000,000 —os000 Fais.000 1,000,000 “400,000 seo Ts14000 Balance per bank ‘Add: Undcposited collections Erroncous hank charge eas Mt mie oan semen Les: Erroneous bank eet checks Adjusted bank balance Adjusting entry (Cash in bank Interest expense (84,000 x 1/12) Prepaid increst expense ‘Accounts payable Petty cash fund Supplics ‘Transporation ‘Loan payable ($16,000386%%) Problem 2-9 Balance per book ‘Add: Overstatement of check number 765 ‘Check number $55 stopped for payment Tota Leas: Service charge NSF check Adjusted book balance Balance per bank ‘Add: Undcposited collections Tora Less: Outstandi Adjusted bank balance Adjusting entries 1. Cash in bank ‘Accounts payable “Miscellansous income 2. Bank service charge Accounts rccwable ‘Cashin bank 3. Receivable from cashier “Accounts receivable Sales discounts Problem 2-10 Answer A. Problem 2-11 Answer B 300,000 $0,000 130,000 326.000 7.000 7.00 180,000 4,000 2.000 3.000 Eee $5,000 40,000 25,000 65.000 30,000 5,000 85,000 12 5,500,000 so0.000 [00.000 1,300,000 ee T10.000 1,200,000 iso TA75.000 20,000 10,000 30,000 10,000 Problem 2-12, Question | Answer © Question 2 Answer C Balance per book ‘Note collected by bank ‘Book error (200,000 ~ 20,000) NSF check Bank srvice charge Adjusted book balance Problem 2-13, Question 1 Answer A Balance per book (SQUEEZE) ‘Add: Proccods of bank lon | Proceeds of note colleted ‘Total Lest: Bank service charge DAIF check Adjusted book balance Question 2 Answer B Balance por tank (SQUEEZE) ‘Add: Deposit ansit, ‘Bank eror (200,000 - 20,000) Total Less: Outstanding checks (750,000 $0,000) Adjusted bank balance Problem 2-14 Question 1 Answer A ‘Balance per hank statement ‘Deposit in twansit ‘Outstanding checks (1,500,000 - 200,000) Bank eror ‘Adjusted bank balance Question 2 Answer A Balance per ledger (SQUEEZE) ‘Note collected by bank Service charge NSF checks Book error Adjusted book balance Question 3 Answer A Cash in bank (Currency and coins on hand est cash fund ‘Tal cash 450,000 13 500,000 ‘930,000 « 180,000), « 250,000) 20.000) ‘eine 2,120,000 —aisoMe 30ss.000 3,070,000 $700,000 5,000,000 1.200.000 «1300,000), 7,070,000 1.100.000 «© 20,000) 500,000), 7,780,000 ‘900,000 Question 3 Answer € Balance per leg - July 31 (SQUEEZE) Service charge NSF check Book eror - understatement of collection ‘Monthly lan payment Adjusted book balance Correct amount of accounts receivable colleted Recorded by depositor Book error ~ understatement of collection 4 1,800,000 (400,900) 30,000) (120,000) 700,000 100.000 (150,000) 990,000 (30,000) (120,000) (100,000), Problem $1 Hank reconciliation - June 30 Book balance [Add: Credit memo for not collected Total Less: NSF check 160,000 Servi charge 000 ‘Adjusted book balance Bank balance ‘Add: Deposit in transit Teta Less: Outstanding checks ‘Adjusted bank balance ‘Bank reconciliation ~ July 31 Book balance ‘Add: Credit memo for bank oan Tora Less: Service charge Adjusted book balance ‘Bank balance ‘Add: Deposit in ansit Tota Leas: Outstanding checks ‘Adjusted baok balance Adjusting entries, July 31 1. Cashin bank 300,000 Bank lon payable 2. Bank service charge 1.000 ‘Cash in bank ‘Computation of deposit in transit ~ July 31 Deposit in transit June 30 ‘Add: Deposits during July: ‘Book debits 4,000,000 ‘Less: June ret mem for note collected om Total Less: Deposits rete by bank during July ‘Bank cris 3,500,000 Less: July credit memo for bank loan tm Depositin transit Joly 31 1s ‘Computation of outstanding checks — July 31 Outstanding checks, Je 30 ‘Ad: Checks drawn by company during July: Book ers Less Jone debit memos for NSF check 100.000 Service charge 108 ‘eat ‘Less: Checks paid by bank during July: ‘Bank debits Less: July service charge ‘Outstanding checks July 31 Problem 3-2 Reconciliation - October 31 Adjusted book balance ank balance ‘Add: Deposit in transit Toa Less: Outstanding checks ‘Adjusted bark balance Reconciliation ~ November 30 Book balance ‘Add, Understatement of collet from eustomer Toa Less: Understatement of check disbursement Aajused book balance Bank balance ‘Add: Deposit in wansit ‘Check of Susan Company charged in error Total Less: Outstanding checks Deposit of Susan Company eroncously crite Adjusted bank balance Adjusting entries ~ November 30 3,600,000 2.300.000 EE EE LE it g z Ha E EEEIE) BRIERE i 270,000 ‘Computation of outstanding checks ~ October 31 Oxstandng checks - October 3 (SQUEEZE) ‘Add: Checks iauod by depositor: Hook dahurtements Understatement of eck paid ‘Total ‘Less: Checks pid by bank: ‘Bank disbursements Check of Susan Company charged in eror Outstanding checks ~ November 30 ‘Computation of deposit in transit - November 30 Deposit in transit ~ October 31 ‘Ada: Cash receips deposited dating November: Book receipts ea UNE of olen fm cus otal ‘Les: Deposits credited by bank during November: Bank receipes Deposit of Susan Company erroneously credited Deposit n wansit~ November 30 Problem 3-3 4 Reconciliation on July 1 Adjusted book balance Bank balance ‘Add: Deposit in transit Toul Lee: Outstanding checks ‘Adjusted bank balance Reconciliation on July 31 Book balance ‘Add: Note collected by bank Tout Less: Bank service charge Aajused book balance Bank balance ‘Add: Deposit in transit Tout ‘Less: Outstanding checks: Check #107 108 Adjusted bank balance Adjusting entries on July 31 1 Cash in bank ‘Nate receivable 2. Bank service charge ‘Cash in bank 22000000 2,500,000 FE 7 100,000 oreo 170,000 1,720,000 soo T2000 470,000 stone 970,000 2:700,000 T1on000 Computation of deposit in transit - July 1 Deposit in transit —July 1 (SQUEEZE) Cath cepts per book Total ‘Les: Deposits credited by bank Deposit in transit July 31 Computation of outstanding checks July 1 Ouestanding checks ~ lly 1 (SQUEEZE) Checks drawn by depositor Total ‘Less: Checks pid by bank (Ouestanding checks July 31 Problem 34 ‘Balance per book ~ November 30 Less: Service charge NSF check Customer's note erroneously recoded as cash receipt Adjusted book balance ‘Balance per bank ~ November 30 ‘Add: Deposit in ans. Total Les: Outstanding checks ‘Adjusted bank balance Deposit in transit -Octobor 31 (Cash receipts deposited: ‘Book debits ‘October colcctons record ta November ‘Customer's note recorded as cash receipt Tol Les: Deposits credited by bank: Bank credits ‘Correction of bank ero Deposit in transit - November 30 Oustanding checks ~ October 31 Checks issued by depositor: ‘Book credits (October hank service charge Total (Checks pid by tanks ‘Hank debits November bank service charge [November NSF chock Ouestanding checks ~ November 30 Adjusting entry Bank service charge Accounts ecewable [Note recevable ‘Cash in bank 1.000 50,000 710,000 45.000) $00,000 1,200,000 1.000.000 (10,000) 1.000 0,000 100,000 ‘900,000 950,000 4200000 $150,000 600,000 720,000 45,000 ‘10,000 125,000 disso 1320.00, 19 Problem 3-5 March 31 Receipes Disbursements April 10 Book balance 20,900 $09,000 720.90 280,000 Nee ccleted by hank March 00 (00) 100.900 0000 Service charge ‘March 000) © 000) Apel 2.000, (2.900) NS check March 20,000) 29.000) Apel 500 (30900) epost in rant ‘March 80.000) 80.000 ‘pail 30 230,000) (220000) checks ‘March 31 175.000 174.00 Apa 30 a ps am so Hank tance i aoe oe ‘Adjusting entry unk service charge 10.000 ‘Accounts receivable 50,000 ‘Nowe receivable 100,000 ‘Cash in bank 160,000 Problem 3-6 July3t——-Reveipes Disbursements August 31 ‘Bank tance 800900 $000,000 3.940.000 1.86a.00 ok ero o collection 180,000), 180,000), ‘Book ero on payment «40.00 $40.00 ‘Bank err on deposit, (200900) « 200.000), ‘Bank eto on penn 4 400,000) 40.000 NSF check ‘aly 100,000 10q000 Aupest «50.000 $000 Nat woeted by hank “uly 200000) 300,000 Aust 300,000) « 300,000), epost in amit: “ly 20.900 00,000) ‘Nope 480.000 Osstanding checks ‘ly « 100,00) « 100.000) Problem 3-7 Nov.30 Book balance 2932000 Bank service charge ‘November 30| © 2000) December 31 Clleeson of mote ‘November 30 «200.000 December 31 oan Adj ok lance =z Bank balance 19.000 Receipes Disbursements 1440000 C2000) ‘400 1.08000 189.000) $73.00 4.000 300,000 ‘ Dee. 3,160,000 4.00) 2,900,000 ($92,000) EE 304,000 Sept.30 Receipts Disbursements Oct. 31 Book talance 1908000 140,000 400,000 Oniber 31 *40.00 Bak tance 2100000 1,200,000, 2500.00 ‘September 30 30.000 (130.000) Over 240,00" 1. Accounts receivable 40,000 2. Cashin bank 170,000 ‘Cheeks outstanding - June 30 ‘Adjusted bank balance 979000 © $9900) 40,000 $0,000 120,000 2,100,000 ($0,000) $50,000 a 3,600,000, ssc S100.00 sao 4.700,0, 700.060 30,000 fxd) Total cost Category I * 2,625,000 a Laman Subtotal soo Category 2: Ce 2,000,000 D Leso.o00 Sebtoa ‘Tas0.000 Grand total azisomg 1. LENRV ~ individual bh LONRV by category Total cost Category 1 4.325.000 Category 2 3,980,000 © Total cost Total NRV LCNRV ~ by total Problem 12-5 1. September 30 (40,000 x 75) December 31 (10,000 x 90) ‘otal FIFO cost RV (50,000. 72) Required allowance for mventory wrtedoun Inventory January 1 Purchases Purchase discount Goods available forsale ‘Les: inventory - December 31 Cost of goods sold before reveral of inventory wrtedowa Gain on reversal of inventory writedown Cost of goods sold afer inventory writedown, 2. Inventory December 31 Tacome sommary Allowance for inventory writedown (00,000 300,000) Gain on reversal of inventory wrtedown om) Unit cost 10s ss “s (axe NRV NRV 4.475.000 3,400,000 3,900,000 100,000 4.325.000 8.275.000 775,000 71875,000 3,900,000 100,000 88 ‘Problem 12-6 No adjustment is necessary because the market price is higher than the agreed price. Any gain on purchase commitment not revognized sally b. No adjustment is necessary because the market price has not declined as of December 31, 2019. The market decline is ony a possible loss. ‘& Loss on purchase commitment (10,000 x 30) 300,000 Estimated habit for purchase commmsiment 300,000 ‘4. December 31, 2019 ‘Loss on purchase commitment 300,000 Estimated lablty for purchase commitment 300,000 January 31, 2020 Purchases (100,000 x 150) 1,500,000 ‘Loss on purchase commitment 200,000 Estimated liability for purchase commitment 300,000 ‘Accounts payable (10,000 x 200) 2,000,000 ‘& December 31,2019 ‘Loss on purchase commitment 300,000 Estimated lability for purchase commitment 300,000 January 31, 2020 Purchases 2,000,000 Estimated lability for purchase commitment 300,000 ‘Accounts payable 2,000,000 Gain on purchase commitment 300,000 Problem 12-7 123172019 Loss on purchase commitment 500,000 Estimated lability for PC 500,000 (03/31/2020 Purchase (100,000 x $4) 5,400,000 Estimate liability for PC ‘300,000 “Accounts payable 5,500,000 Gain on purchase commitment “400,000 Problem 12:8 Answer B Estimated sales pice 4,000,000 Cost wo complexe 200.000 Net realizable value za FIFO cost lower than NRV) 2s. Problem 12-9 Question 1 Answer B Question 2 Answer A Product X Product ¥ Problem 12-10 Answer A. (1,040,000) Problem 12-11 Answer A Markers Pens Highlighters Problem 12-12 Question 1 Answer A (10,000 x 40) Question 2 Answer B (10,000 30) Question 3 Answer A Question 4 Answer B Ending on February 15, 2020 Purchases (10, Fstumated labilty ‘Accounts payable (10,000 x 310) Gain on purchase commitment 3300) Cost 1,500,000 240,000 188,000 300,000 NRV 1,400,000 NRY 312,000 200,000 29,000 3,000,000 Valve 240,000 18,000 3,100,000 300,000 CHAPTER 13 Problem 13:1 Amwer A lnventary — January 1 $30,000 Purchases 33.200,000 Freight in Sau Tota Ts0,000 Less: Purchase returns am ae (Goods wvalbl forsale 325,00 Les: Cont of good sold (4,500,000 x 66) 2a evento ~ March 31 ihsae Problem 13-2 Answer A Sates $400,000 Sales returns 000) Net sles Tina ‘The ales discounts are ignored fr purpons of estimating inventory nde he gross profit method leventory— January 1 $50,000 Purchases 2.300000 Purchase reams Csa000) Freight im tee Goods availble or sale F320,000 Cont of gods sold (70% x 3,370,000) 2am Inventory Decerber 31 571.0 Physical inventory — December 31 aa Cost of missing inventory RSET Problem 13-3 Answer © Sates 00,000 ‘Sales returns, tua) Netsales mae ‘Coat of goods sold (75% x 5,200,000) amon Like sales discounts, sales allowances are ignored in dctrmining net sales under the gross profit method, Problem 13-4 Answer B ventory — January 1 1,100,000 [Net purchases 000.090 Goods available forsale 7,100,000 Cost of goods sold (7.280,000/ 130%) 50.090) ventory ~ September 30 7,500,000 Realizale value of damaged goods

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