Test bank of Advanced Accounting by Guerrero & Peralta CHAPTER 21
CHAPTER 21
MULTIPLE CHOICE
21-1
b
21-2
a
21-3
a
21-4
b
21-5
b
21-6
a
21-7
c
21-8
a
21-9
a
21-10 c
21-11 d
21-12 b
21-13 b
21-14 a
21-15 a
Excess of income over expenses
Depreciation
Increase in due from national government agencies
Increase in prepaid rent
Increase in accounts payable
Cash provided by operating activities
P 200
70
( 10)
( 15)
30
P 275
142
PROBLEMS
Problem 21-1
1.
Memo entry in the RAOPS, RAOMO, RAOCO and RAOFE.
2.
Cash – National Treasury – MDS
Subsidy Income from National Government
2,000,000
2,000,000
3.
Memo entry in the RAOPS, RAOMO, RAOCO and RAOFE.
4.
Office equipment
Accounts payable
50,000
Cash – Disbursing Officer
Cash – National Treasury – MDS
40,000
Salaries and wages – Regular
Personal economic relief allowance (PERA)
Additional compensation
Due to BIR
Due to GSIS
Due to Pag-ibig
Due to Philhealth
Cash – Disbursing Officer
44,000
3,000
3,000
Due to GSIS
Due to Pag-ibig
Due to Philhealth
Cash – National Treasury – MDS
5,500
400
600
Life and retirement contribution
Pag-ibig contribution
Philhealth contribution
Cash – National Treasury – MDS
5,500
400
600
Electricity
Telephone expense – Landline
Accounts payable
Due to BIR
Cash – National Treasury – MDS
5,000
4,000
50,000
Due to BIR
Subsidy income from national government
4,500
5.
6.
7.
8.
9.
10.
11.
12.
50,000
40,000
3,500
5,500
400
600
40,000
6,500
6,500
5,000
54,000
4,500
Cash – Collecting Officer
Sales revenue
Permit fees
Miscellaneous income
90,000
Cash in Bank – Local currency – Current account
Cash – Collecting Officer
90,000
40,000
30,000
20,000
90,000
143
Problem 21-2
Building
1.
Memo entry in RAOCO.
2.
Advances to contractor
Cash – National Treasury – MDS
240
Construction in progress – Other Public Infrastructure
Advances to contractor
Accounts payable
400
Accounts payable
Due to BIR
Cash – National Treasury – MDS
160
Construction in progress – Other Public Infrastructure
Accounts payable
400
Accounts payable
Due to BIR
Cash – National Treasury
400
3.
4.
5.
6.
7.
8.
Due to BIR
Subsidy income from national government
Office Building
Construction in progress – OPI
240
240
160
40
120
400
40
360
80
80
800
800
Repairs of Building
1.
Memo entry in RAOCO.
2.
Construction materials inventory
Accounts payable
70
Accounts payable
Due to BIR
Cash – National Treasury – MDS
70
Construction in progress – Other Public Infrastructure
Construction materials inventory
60
3.
4.
5.
70
7
63
60
Memo entry in the RAOCO
144
6.
7.
8.
9.
Cash – Disbursing Officer
Cash – National Treasury – MDS
36
Construction in progress – Other Public Infrastructure
Due to BIR
Cash – Disbursing Officer
40
Due to BIR
Cash – National Treasury – MDS
47
Office building
Construction in progress – OPI
36
4
36
47
100
100
Land:
1.
Memo entry in the RAOCO, P100.
2.
Land
100
Accounts payable
3.
Accounts payable
Due to BIR
Cash – National Treasury – MDS
100
100
10
90
145
Problem 21-3
(a)
Journal Entries:
1.
Memo entry in the Registry of Obligations and Allotments.
2.
Cash – National Treasury – MDS
Subsidy income from national government
2,500
2,500
3.
Memo entry in Registry of Obligations and Allotments.
4.
Office equipment
Accounts payable
120
IT equipment and software
Accounts payable
30
Prepaid rent
Cash – National Treasury – MDS
60
Electricity expense
Cash – National Treasury – MDS
50
Telephone expense – Landline
Cash – National Treasury – MDS
40
Petty cash fund
Cash – National Treasury – MDS
45
Accounts payable
Due to BIR
Cash – National Treasury – MDS
120
Accounts payable
Cash – National Treasury – MDS
30
Due to BIR
Subsidy income from national government
12
Cash – Collecting Officer
Other service income
Sales revenue
50
Cash in bank – LCCA
Cash – Collecting Officer
50
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
120
30
60
50
40
45
12
108
30
12
10
40
50
146
(b)
Pre-closing Trial Balance
Petty cash fund
Cash – National Treasury – MDS
Cash in Bank – Local Currency – Current Account
Prepaid rent
Office equipment
IT equipment and software
Other service income
Sales revenue
Subsidy income from national government
Electricity expense
Telephone expense – landline
Total
45
2,167
50
60
120
30
10
40
2,512
50
40
2,562
2,562
© Adjusting Entries
(1)
(2)
Depreciation – Office equipment & software
Depreciation – IT equipment
Accumulated depreciation – Office equipment
Accumulated depreciation – IT equip & software
20
5
Rent expense
Prepaid rent
30
20
5
30
Closing Entries:
(1)
Unused National Clearing Account (NCA)
Subsidy income from national government
Cash – National Treasury – MDS
NCA received during the year
Less: MDS check issued
Unused NCA
(2)
(3)
(4)
(5)
Income accounts:
Other service income
Sales revenue
Subsidy income from national government
Income and expense summary
Expense accounts:
Income and expense summary
Electricity expense
Telephone expense – landline
2,167
2,167
2,500
333
2,167
10
40
345
395
90
50
40
Income and expense summary
Retained operating surplus
305
Retained operating surplus
305
Government equity
305
305
147
Problem 21-4
Agency VV
Statement of Income and Expenses
Year Ended December 31, 2008
Income:
Subsidy income from national government
Less: Reversion of unused NCA
Less: Expenses
Salaries and wages – Regular
Personnel Economic Relief Allowance
Additional compensation
Life and retirement insurance contribution
Pag-ibig contribution
Philhealth contgribution
Traveling expense – Local
Office supplies expense
Electricity expense
Telephone expense – landline
Janitorial services
Security services
Repairs and maintenance – Office building
Depreciation – Office building
Depreciation – office equipment
Depreciation – furniture and fixtures
Depreciation – IT equipment and software
Net income over expenses
P1,700
800
P 320
40
40
60
10
10
35
60
75
45
30
35
65
15
10
5
5
P900
860
P 40
148
Agency VV
Balance Sheet
As of December 31, 2008
ASSETS
Current Assets
Cash:
Cash in vault
Cash – collecting officer
Cash – disbursing officer
Petty cash fund
Cash in bank – LCCA
Receivables:
Accounts receivable
Less: Allowance for doubtful accounts
Inventories:
Office supplies inventory
Other current assets
Long-term investment:
Investment in stock
Property, Plant and Equipment:
Land
Office building
Less: accumulated depreciation
Office equipment
Less: accumulated depreciation
Furniture and fixtures
Less: accumulated depreciation
IT equipment and software
Less: accumulated depreciation
Total assets
LIABILITIES AND EQUITY
Liabilities
Current liabilities
Accounts payable
Due to BIR
Due to GSIS
Due to Pag-ibig
Due to Philhealth
Other payables
Equity:
Government equity
Total liabilities and equity
P 200
500
1,000
150
350
P2,200
P 120
20
100
30
15
400
600
650
50
250
20
110
10
190
25
600
230
100
165
185
50
30
25
25
15
1,695
4,440
330
4,110
4,440
149
MULTIPLE CHOICE
21-1
b
21-2
a
21-3
a
21-4
b
21-5
b
21-6
a
21-7
c
21-8
a
21-9
a
21-10 c
21-11 d
21-12 b
21-13 b
21-14 a
21-15 a
Excess of income over expenses
Depreciation
Increase in due from national government agencies
Increase in prepaid rent
Increase in accounts payable
Cash provided by operating activities
P 200
70
( 10)
( 15)
30
P 275
142
PROBLEMS
Problem 21-1
1.
Memo entry in the RAOPS, RAOMO, RAOCO and RAOFE.
2.
Cash – National Treasury – MDS
Subsidy Income from National Government
2,000,000
2,000,000
3.
Memo entry in the RAOPS, RAOMO, RAOCO and RAOFE.
4.
Office equipment
Accounts payable
50,000
Cash – Disbursing Officer
Cash – National Treasury – MDS
40,000
Salaries and wages – Regular
Personal economic relief allowance (PERA)
Additional compensation
Due to BIR
Due to GSIS
Due to Pag-ibig
Due to Philhealth
Cash – Disbursing Officer
44,000
3,000
3,000
Due to GSIS
Due to Pag-ibig
Due to Philhealth
Cash – National Treasury – MDS
5,500
400
600
Life and retirement contribution
Pag-ibig contribution
Philhealth contribution
Cash – National Treasury – MDS
5,500
400
600
Electricity
Telephone expense – Landline
Accounts payable
Due to BIR
Cash – National Treasury – MDS
5,000
4,000
50,000
Due to BIR
Subsidy income from national government
4,500
5.
6.
7.
8.
9.
10.
11.
12.
50,000
40,000
3,500
5,500
400
600
40,000
6,500
6,500
5,000
54,000
4,500
Cash – Collecting Officer
Sales revenue
Permit fees
Miscellaneous income
90,000
Cash in Bank – Local currency – Current account
Cash – Collecting Officer
90,000
40,000
30,000
20,000
90,000
143
Problem 21-2
Building
1.
Memo entry in RAOCO.
2.
Advances to contractor
Cash – National Treasury – MDS
240
Construction in progress – Other Public Infrastructure
Advances to contractor
Accounts payable
400
Accounts payable
Due to BIR
Cash – National Treasury – MDS
160
Construction in progress – Other Public Infrastructure
Accounts payable
400
Accounts payable
Due to BIR
Cash – National Treasury
400
3.
4.
5.
6.
7.
8.
Due to BIR
Subsidy income from national government
Office Building
Construction in progress – OPI
240
240
160
40
120
400
40
360
80
80
800
800
Repairs of Building
1.
Memo entry in RAOCO.
2.
Construction materials inventory
Accounts payable
70
Accounts payable
Due to BIR
Cash – National Treasury – MDS
70
Construction in progress – Other Public Infrastructure
Construction materials inventory
60
3.
4.
5.
70
7
63
60
Memo entry in the RAOCO
144
6.
7.
8.
9.
Cash – Disbursing Officer
Cash – National Treasury – MDS
36
Construction in progress – Other Public Infrastructure
Due to BIR
Cash – Disbursing Officer
40
Due to BIR
Cash – National Treasury – MDS
47
Office building
Construction in progress – OPI
36
4
36
47
100
100
Land:
1.
Memo entry in the RAOCO, P100.
2.
Land
100
Accounts payable
3.
Accounts payable
Due to BIR
Cash – National Treasury – MDS
100
100
10
90
145
Problem 21-3
(a)
Journal Entries:
1.
Memo entry in the Registry of Obligations and Allotments.
2.
Cash – National Treasury – MDS
Subsidy income from national government
2,500
2,500
3.
Memo entry in Registry of Obligations and Allotments.
4.
Office equipment
Accounts payable
120
IT equipment and software
Accounts payable
30
Prepaid rent
Cash – National Treasury – MDS
60
Electricity expense
Cash – National Treasury – MDS
50
Telephone expense – Landline
Cash – National Treasury – MDS
40
Petty cash fund
Cash – National Treasury – MDS
45
Accounts payable
Due to BIR
Cash – National Treasury – MDS
120
Accounts payable
Cash – National Treasury – MDS
30
Due to BIR
Subsidy income from national government
12
Cash – Collecting Officer
Other service income
Sales revenue
50
Cash in bank – LCCA
Cash – Collecting Officer
50
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
120
30
60
50
40
45
12
108
30
12
10
40
50
146
(b)
Pre-closing Trial Balance
Petty cash fund
Cash – National Treasury – MDS
Cash in Bank – Local Currency – Current Account
Prepaid rent
Office equipment
IT equipment and software
Other service income
Sales revenue
Subsidy income from national government
Electricity expense
Telephone expense – landline
Total
45
2,167
50
60
120
30
10
40
2,512
50
40
2,562
2,562
© Adjusting Entries
(1)
(2)
Depreciation – Office equipment & software
Depreciation – IT equipment
Accumulated depreciation – Office equipment
Accumulated depreciation – IT equip & software
20
5
Rent expense
Prepaid rent
30
20
5
30
Closing Entries:
(1)
Unused National Clearing Account (NCA)
Subsidy income from national government
Cash – National Treasury – MDS
NCA received during the year
Less: MDS check issued
Unused NCA
(2)
(3)
(4)
(5)
Income accounts:
Other service income
Sales revenue
Subsidy income from national government
Income and expense summary
Expense accounts:
Income and expense summary
Electricity expense
Telephone expense – landline
2,167
2,167
2,500
333
2,167
10
40
345
395
90
50
40
Income and expense summary
Retained operating surplus
305
Retained operating surplus
305
Government equity
305
305
147
Problem 21-4
Agency VV
Statement of Income and Expenses
Year Ended December 31, 2008
Income:
Subsidy income from national government
Less: Reversion of unused NCA
Less: Expenses
Salaries and wages – Regular
Personnel Economic Relief Allowance
Additional compensation
Life and retirement insurance contribution
Pag-ibig contribution
Philhealth contgribution
Traveling expense – Local
Office supplies expense
Electricity expense
Telephone expense – landline
Janitorial services
Security services
Repairs and maintenance – Office building
Depreciation – Office building
Depreciation – office equipment
Depreciation – furniture and fixtures
Depreciation – IT equipment and software
Net income over expenses
P1,700
800
P 320
40
40
60
10
10
35
60
75
45
30
35
65
15
10
5
5
P900
860
P 40
148
Agency VV
Balance Sheet
As of December 31, 2008
ASSETS
Current Assets
Cash:
Cash in vault
Cash – collecting officer
Cash – disbursing officer
Petty cash fund
Cash in bank – LCCA
Receivables:
Accounts receivable
Less: Allowance for doubtful accounts
Inventories:
Office supplies inventory
Other current assets
Long-term investment:
Investment in stock
Property, Plant and Equipment:
Land
Office building
Less: accumulated depreciation
Office equipment
Less: accumulated depreciation
Furniture and fixtures
Less: accumulated depreciation
IT equipment and software
Less: accumulated depreciation
Total assets
LIABILITIES AND EQUITY
Liabilities
Current liabilities
Accounts payable
Due to BIR
Due to GSIS
Due to Pag-ibig
Due to Philhealth
Other payables
Equity:
Government equity
Total liabilities and equity
P 200
500
1,000
150
350
P2,200
P 120
20
100
30
15
400
600
650
50
250
20
110
10
190
25
600
230
100
165
185
50
30
25
25
15
1,695
4,440
330
4,110
4,440
149