EXERCISEAC 518

Hereunder is the Unadjusted Trial Balance of the Department of Public Works andHighways as of December 31, 2015:

Account Title Acct Code Debit Credit

Cash – Treasury/Agency Deposit, Reg 10104010 100,000Cash - MDS, Regular 10104040 180,000Cash – TRA 10104070 70,000Due from Officers and Employees 10305020 20,000Office Supplies Inventory 10404010 450,000Prepaid rent 19902020 360,000Prepaid insurance 19902050 120,000Building 10604010 11,000,000Office equipment 10605020 4,000,000Accum. Dep’n – Building 10604011 1,500,000Accum. Dep’n – Equipment 10605021 450,000Accounts Payable 20101010 1,500,000Guaranteed/Deposit Payable 20401040 350,000Accumulated Surplus/Deficit 30101010 7,640,000Other Business Income 40202990 300,000Rent income 40202050 200,000Subsidy from National Government 40301010 8,000,000Salaries and wages – Regular 50101010 2,670,000 PERA 50102010 220,000Travelling expenses 50201010 200,000Fuel, oil and lubricants 50203090 200,000Electricity 50204020 350,000 ------------ -------------- Total P19,940,000 P19,940,000

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Adjustments:1. A collection per OR#1032 amounting to P345 was recorded as P435 in the books. But the

deposit was correctly recorded. 2. Prepaid Rent covered the period June 1, 2015 to May 31,2016. 3. Uncollected Rent Income – P25,000. 4. An immediate investigation was conducted by the auditor to a collecting officer of DOT

since the office was ransacked and resulted to loss of cash from its collection totaling P150,000. Immediately the officer reported to a nearby police station and blotter the incident. During the investigation, the collecting officer was questioned why did he not deposit his collections. The said officer requested for relief from cash accountability. But the investigation noted that there is negligence committed and left the office with his collections just put inside his unlocked drawer justifying that he always do that practice and no same incident happened. So the request was denied.

a. Give the journal entry for the amount lost upon receipt of the decision in order to establish the receivable account from the collecting officer.

b. The journal entries when his request was denied. It was already final and executory. He settled his accountability.

5. Transportation expenses charged to the petty cash fund in the amount of P2,000 was obligated but erroneously recorded to Fuel, oil and lublicants..

6. Liquidation of travel cash advance of P12,000 was erroneously credited to Guaranteed Deposit Payable account.

7. Remittance to BIR was erroneously recorded to Cash – Treasury/Agency Deposit, Reg amounting to P70,000.

8. Accounts Payable includes P15,000 which has been in books for over two years. This pertains to repairs.and maintenance of IT equipment.

9. Total office supplies used in operation amounted to P125,000.

10. Insurance paid during the period was effective, October 1, 2015 until September 30, 2016 or for one year period.

11. A seminar fee of P20,000 was included in the cash advance for travel however, the liquidation should that the seminar fee was recorded all to travelling expnses..

Required:1. Prepare the adjusting and closing entries2. Prepare the following:

2.1 Statement of Operation 2.2 Statement of Changes in Net Assets

2.3 Statement of Financial Position

Instructions:

1. Refer below to the format of the Working Trial Balance to be used especially the columns:

Name of the Co. Working Trial Balance For the period ending Dec. 31_

Acct Account Unadjusted T/B Adustments Adjusted T/B Closing Post-closingCode Title Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr

2. Copy the Unadjusted T/B given to the 1st 2 cols.3. Prepare and summarize the adjusting entries in a separate sheet.4. Post the adjusting entries to the next two cols of the worksheet.5. Extend the balances to the next two cols (Adjusted T/B).6. Summarize the closing entries in a separate sheet. (Refer to the hand-outs regarding the steps in

closing the accounts involved.7. Post to the next 2 cols the closing entries.8. Extend the balances to the next 2 clos, the post-closing T/B.9. Prepare the required Financial Statements10. Submit the output on Monday for MW and Tues for TTh.

Thank you. This is your output for AC 518 and will be graded and part of your Final Exam…

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