Problem 1. ASHTA Company has the following transactions. 18 1.

15 11 Manufacturing equipment, installed 254,000 Machinery

Feb 2 The company purchased goods from Happy Corp. for P150,000 12.29.17 & Equip
subject to cash discount germs of 2/10, n/30. The company 19 1.15 12 Dividend declared 1.15.18 160,000 Div Payable
records purchases and accounts payable at net amounts after
cash discounts. The invoice was paid on February 25. Accrued liabilities as of December 31, 2017 were as follows:
April 1 The company purchased a truck for P120,000 from Broom Motors Accrued payroll P 48,000
Corp., paying P12,000 in cash and signing a one-year, 12% note Accrued interest payable 26,666
for the balance of the purchase price. Dividends payable 160,000
May 1 The company borrowed P240,000 from Manila Bank by signing a The accrued payroll and accrued interest payable were reversed effective 1.1.8.
P276,000 noninterest-bearing note due one year form May 1
Aug 1 The company’s board of directors declared a P900,000 cash Requirements:
dividend that was payable on September 10 to shareholders of Review the data given above and prepare journal entries to adjust the
record on August 31. accounts on December 31, 2017. Assume that the company follows FOB
Requirements: terms for recording inventory purchases.
1. Prepare all journal entries necessary to record the transactions described
about. Problem 3. The shareholder’s equity section of RAIN Company’s statement of
2. Assume that ASHTA’s financial statement ends on December 31 and that financial position as of December 31, 2016 is as follows:
no adjusting entries relative to the transactions above been recorded.
Prepare any adjusting journal entries concerning interest that are Ordinary share capital (P5 par, 250,000 shares
necessary to present fair financial statements at December 31. Authorized, 17,500 issued and outstanding P 687,500
Share premium 275,000
Problem 2. In conjunction with your firm’s examination of the financial Total Paid-in Capital P962,500
statements of BATUR as of December 31, 2017, you obtained the information Unappropriated retained earnings P 667,500
from the company’s voucher register shown in the work paper below. Appropriated retained earnings 250,000
Total retained earnings 917,500
No Date Ref Description Amount Charged Total shareholders’ equity P 1,880,000
1 12.18 200 Supplies, shipped FOB destination P 15,000 Supplies
12.15.17; received 12.17.17 Rain had the following equity transactions in 2017:
2 12.18 203 Auto insurance, 12.15.17 - 12.15.18 22,000 Prepaid Ins Jan 15 Completed the building renovation for which P250,000 of retained
3 12.21 209 Repairs services; received 12.20.17 19,000 Repairs earnings had been restricted. Paid the contractor P242,500 all of
4 12.26 212 Merchandise, shipped FOB shipping 123,000 Inventory which is capitalized.
point, 12.20.17; received 12.24.17 Mar 3 Issued 50,000 additional ordinary shares for P8 per share.
5 12.21 210 Payroll, 12.07.17 – 12.21.17 (12 days) 69,000 Salaries May 18 Declared a dividend of P1,50 per share to be paid on July 31,
6 12.21 234 Subscription to magazine for 2018 5,000 Subs. Exp 2017 to shareholders of record on June 30, 2017.
7 12.28 236 Utilities for December 2017 24,000 Utilities Exp
June 19 Approved additional building renovation to be funded internally.
8 12.28 241 Merchandise, shipped FOB 111,500 Inventory
The estimated cost of the project is P200,000 and retained
destination, 12.24.17; received 1.2.18
9 12.28 242 Merchandise, shipped FOB 84,000 Inventory earnings are to be restricted for that amount.
destination, 12.24.17; received 1.2.18 July 31 Paid the dividend.
10 1.2 1 Legal services; received 12.28.17 46,000 Legal Exp Dec 31 Declared a property dividend to be paid on January 10, 2018, to
11 1.2 2 Medical services for employees for 25,000 Medical Exp shareholders of record on Jan 5, 2018. The dividend is to consist
December 2017 of equipment with a carrying value of P150,000. The equipment’s
12 1.5 3 Merchandise shipped FOB shipping 55,000 Inventory fair value at December 31, 2017 is P157,500.
point, 12.29.17 received 1.4.18 Dec 31 Reported P442,500 of net income on December 31, 2017 income
13 1.10 4 Payroll 12.21.17-1.5.13 (12 days 72,000 Salaries statement.
total, 4 days in January 2018)
14 1.10 6 Merchandise, shipped FOB shipping 64,000 Inventory
Requirements: What is the balance of the following account at December 31,
point 1.2.18 received 1.6.18
15 1.12 8 Merchandise, shipped FOB 38,000 Inventory
2017?
destination 1.3.18 received 1.10.18 1. Ordinary Share Capital
16 1.13 9 Maintenance services received 1.9.18 9,000 Repairs 2. Share Premium
17 1.14 10 Interest on bank loan, 10.10.17- 30,000 Interest Exp 3. Unappropriated Retained Earnings
1.10.18 4. Shareholder’s Equity