CHAPTER 21

MULTIPLE CHOICE 21-1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 21.9 21.10 21.11 21.12 21.13 21.14 21.15 b a a b b a c a a c d b b a 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

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PROBLEMS
Problem 21-1 1. 2. 3. 4. 5. 6. Memo entry in the RAOPS, RAOMO, RAOCO and RAOFE. Cash National Treasury MDS Subsidy Income from National Government 2,000,000 2,000,000

Memo entry in the RAOPS, RAOMO, RAOCO and RAOFE. Office equipment Accounts payable Cash Disbursing Officer Cash National Treasury MDS 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 Due to GSIS Due to Pag-ibig Due to Philhealth Cash National Treasury MDS Life and retirement contribution Pag-ibig contribution Philhealth contribution Cash National Treasury MDS Electricity Telephone expense Landline Accounts payable Due to BIR Cash National Treasury MDS Due to BIR Subsidy income from national government Cash Collecting Officer Sales revenue Permit fees Miscellaneous income Cash in Bank Local currency Current account Cash Collecting Officer 50,000 50,000 40,000 40,000 44,000 3,000 3,000 3,500 5,500 400 600 40,000 5,500 400 600 6,500 5,500 400 600 6,500 5,000 4,000 50,000 5,000 54,000 4,500 4,500 90,000 40,000 30,000 20,000 90,000 90,000

7.

8.

9.

10. 11.

12.

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Problem 21-2 Building 1. 2. 3. Memo entry in RAOCO. Advances to contractor Cash National Treasury MDS Construction in progress Other Public Infrastructure Advances to contractor Accounts payable Accounts payable Due to BIR Cash National Treasury MDS Construction in progress Other Public Infrastructure Accounts payable Accounts payable Due to BIR Cash National Treasury Due to BIR Subsidy income from national government Office Building Construction in progress OPI 240 240 400 240 160 160 40 120 400 400 400 40 360 80 80 800 800

4.

5. 6.

7. 8.

Repairs of Building 1. 2. 3. Memo entry in RAOCO. Construction materials inventory Accounts payable Accounts payable Due to BIR Cash National Treasury MDS Construction in progress Other Public Infrastructure Construction materials inventory Memo entry in the RAOCO 70 70 70 7 63 60 60

4. 5.

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6. 7.

Cash Disbursing Officer Cash National Treasury MDS Construction in progress Other Public Infrastructure Due to BIR Cash Disbursing Officer Due to BIR Cash National Treasury MDS Office building Construction in progress OPI

36 36 40 4 36 47 47 100 100

8. 9. Land: 1. 2. 3.

Memo entry in the RAOCO, P100. Land Accounts payable Accounts payable Due to BIR Cash National Treasury MDS 100 10 90 100 100

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Problem 21-3 (a) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Journal Entries: Memo entry in the Registry of Obligations and Allotments. Cash National Treasury MDS Subsidy income from national government Memo entry in Registry of Obligations and Allotments. Office equipment Accounts payable IT equipment and software Accounts payable Prepaid rent Cash National Treasury MDS Electricity expense Cash National Treasury MDS Telephone expense Landline Cash National Treasury MDS Petty cash fund Cash National Treasury MDS Accounts payable Due to BIR Cash National Treasury MDS Accounts payable Cash National Treasury MDS Due to BIR Subsidy income from national government Cash Collecting Officer Other service income Sales revenue Cash in bank LCCA Cash Collecting Officer 120 120 30 30 60 60 50 50 40 40 45 45 120 12 108 30 30 12 12 50 10 40 50 50 2,500 2,500

11. 12. 13.

14.

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(b)

Pre-closing Trial Balance

45 2,167 50 60 120 30 10 40 2,512 50 40 2,562 2,562

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

Adjusting Entries
(1) Depreciation Office equipment & software Depreciation IT equipment Accumulated depreciation Office equipment Accumulated depreciation IT equip & software Rent expense Prepaid rent 20 5 20 5 30 30

(2)

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) 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 Income and expense summary Retained operating surplus Retained operating surplus 2,500 333 2,167 10 40 345 395 90 50 40 305 305 305 2,167 2,167

(3)

(4) (5)

Government equity

305

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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

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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 P 120 20

P2,200 100 30 15 400

600 650 50 250 20 110 10 190 25 600 230 100 165 1,695 4,440

185 50 30 25 25 15

330 4,110 4,440

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