Professional Documents
Culture Documents
Exercises
Exercise 1
a. The error will overstate the debits by P4,500 or understate the credits by
P4,500.
b. The total debits will still be equal to the total credits. But accounts payable
will be overstated by P2,000 while accounts receivable will be overstated by
P2,000.
c. The total debits will still be equal to the total credits but both totals will be
understated by P5,040.
d. The total debits will still be equal to the total credits. However, equipment will
be understated by P6,000 while supplies will be overstated by P6,000.
Exercise 2
Exercise 3
Exercise 4
1. asset 7. asset
2. asset 8. asset
3. liability 9. liability
4. revenue 10. revenue
5. expense 11. expense
6. expense 12. asset
Exercise 5
a. 8 f. 7
b. 1 g. 5
c. 9 h. 2
d. 10 i. 4
e. 6 j. 3
Exercise 6
a. 4 e. 1
b. 6 f. 2
c. 5 g. 3
d. 7
Measuring Business Income: The Adjusting Process 3
Exercise 7
Exercise 8
Exercise 9
Exercise 10
Errors
Assets
Current Assets
Cash P 51,700
Accounts receivable 53,900
Supplies 5,900
Prepaid insurance 16,000
Total current assets P127,500
Property, Plant and Equipment
Land P750,000
Building P555,000
Less: Accumulated depreciation 230,000 325,000
Equipment 282,500
Less: Accumulated depreciation 160,000 122,500
Total PPE 1,197,500
Total Assets P1,325,000
Current Liabilities
Accounts payable P 43,900
Wages payable 9,750
Total current liabilities P 53,650
Owners Equity
P. Candelaria, Capital, January 1 1,271,350
Less: Net loss 155,000
P. Candelaria, Capital, December 31 1,116,350
Total Liabilities and Owners Equity P1,170,000
There is a difference between the total assets and total liabilities and owners
equity of P155,000. One possible explanation is since the net loss account has
a credit balance of P155,000 and just erroneously included in the current
liabilities section, then this could in reality be net income which should be added
to the capital account.
Measuring Business Income: The Adjusting Process 7
Exercise 11
(e) 2,100
1. c 6. d 11. c
2. c 7. b 12. b
3. c 8. c 13. a
4. a 9. c 14. c
5. c 10. b 15. d
Test Material
Supplies Equipment
Dec. 5 3,000 Adj. 2,000 Dec. 3 30,000
Bal. 1,000
Requirement (1)
_____
* P8,000 4 = P2,000
** P30,000 5 = P6,000 12 = P500
*** P4,000 5 = P800
Requirement (2)
10 Chapter 9
Requirement (1)
_____
* P7,200 4 = P1,800
** P33,600 4 = P8,400 12 = P700
*** P2,000 5 = P400
Requirement (2)
12 Chapter 9