Show the Solution/Explanation for my Guidance

The next 6 questions pertain to this problem. Jose Carpio decided to invest P1,000,000 excess cash in a bank at 3% annual interest rate on March 1, 2019. Interest is paid on a monthly basis every 1st of the month.

1.What amount of income will be recognized for the year ending, December 31, 2019?

2.What amount of cash will be collected for interest revenue in 2019?

3.What is the amount of interest receivable as of Dec. 31, 2019?

4.What amount of cash will be collected for Interest revenue in 2020?

5.What amount of interest revenue will be recognized in 2020?

6.What is the amount of interest receivable in 2020?

7.Ace received a 6% 90-day P120,000 note from a customer on Dec. 1, 2019 in settlement of accounts receivable. What is the adjusting entry?

8.On Oct 1, 2019, Ace borrowed P150,000 from a multi-purpose cooperative on a 6-month, 12% per annum note payable. The principal and interest are payable at the end of 6-months. What is the adjusting entry?

Fill in the Blanks: Please provide explanation in each item.

1. Income summary is by the end of the period.

2. Revenue, Expenses, and Withdrawals are examples .

3. in temporary accounts will not be carried over to the next accounting period.

4. After closing entries are posted, owner's Capital in the ledger will contain the .

5. Revenue is closed to Income Summary by a to each revenue account and a to Income Summary.

6. Expenses is closed to Income Summary by the individual expenses and Income Summary.

7. If the balance of Withdrawals is a credit, it will be closed by Income Summary and owner's Capital.

8. The balance of Withdrawals is closed by a and the amount transferred to owner's Capital by a .

9. At the end of the closing process, all temporary accounts in the ledger will have a. balance.

10. The contains a list of permanent accounts after the adjusting and closing entries have been posted to the ledger from a journal.

11. Closing entries can be prepared from a .

12. After closing entries are posted, Income Summary will have balance.

13. Journalizing adjustments can be done from the .

14. Cash, Equipment, and Supplies are not part of the process.

15. Income Summary is a account.

True or False: Please provide an explanation for my guidance

1. There Is sufficient information on a post-closing trial balance to create a balance sheet.

2. There is sufficient information on a post-closing trial balance to formulate a statement of changes in equity.

3. If the post-closing trial balance does not balance, then the error(s) definitely occurred at some point during the closing process.

4. The adjusting entries involving Rent Receivable and Salaries Payable could be reversed.

5. The adjusting entries involving Depreciation Expense-Building and Supplies Expense could be reversed.

6. All nominal accounts must be closed before the Income Summary account can be closed.

7. The post-closing trial balance will have fewer accounts than the adjusted trial balance.

8. The balances of all the accounts that appear on a balance sheet are the same on the adjusted trial balance as they are on a post-closing trial balance.

9. There is sufficient information on a post-closing trial balance to provide an income statement.

10. The post-closing trial balance will contain only real accounts.

11. The Summary account will appear on the post-closing trial balance.

12. The post-closing trial balance contains asset, liability, withdrawal and capital accounts.

13 The final trial balance is called a post-closing trial balance.

14. A reversing entry is a journal entry which is the exact opposite of a related adjusting entry made at the end of the period.

1. To simplify the recording of regular transactions in the next accounting period, journal entries are reversed.

2.Post-closing trial balance tests the equality of the accounts after the adjustments and the closing entries are posted.

3 Supplies Expense is a temporary account.

4. A revenue account is closed with a credit to the revenue account and a debit to Income Summary.

5. An expense account is closed with a debit to the expense account and a credit to Income Summary.

6. Income Summary is closed with a debit to Income Summary and a credit to theOwner's Withdrawals account.

7. When profit or loss is exactly zero, one of the usual closing entries will be avoided.

8. The Income Summary account appears in the income statement.

9. Temporary accounts are also known as real accounts.

10. During the closing process, revenues are transferred to the credit side of the Income Summary account.

11. During the closing process, expenses are transferred to the credit side of the Income Summary.

12. A reversing entry will include either a debit to a revenue account or a credit to an expense account.

13. Reversing entries are never required.

14. Reversing entries can be made for deferrals but not for accruals.

15. Reversing entries are made to correct errors in the accounts.

16. The purpose of reversing entries is to simplify the bookkeeping process.

17. Adjusting entries are all dated as at the first day of the new accounting period.

18. Closing entries can be prepared by referring solely to the Income Statement columns of the worksheet.

19. After the adjusting and closing entries have been recorded and posted, the general ledger accounts that appear on the balance sheet have no balances.

20. General ledger account balances agree with those in the financial statements even before adjusting and closing entries are recorded and posted.

21. The incom summary account is used to close the income and expense accounts.

22. The balance of the owner's capital account represents the cumulative net result of income, expense and withdrawal transactions.

23. Closing entries clear income and expense accounts at the end of the period.

24. Trial balances are prepared primarily to ensure that no entries have been omitted.

25. In the accounting cycle, closing entries are prepared before adjusting entries.

26. In the accounting cycle, information from source documents is initially recorded the journal.

27, Nominal account balances are reduced to zero by closing entries.

28. Closing entries deal primarily with the balances of real accounts.

29. The only accounts that are closed are income statement accounts.

30. Closing entries result in the transfer of profit or loss into the owner's Capital account.

31. After all closing entries have been entered and posted, the balance of the Income Summary account will be zero.

32. Depreciation Expense-Building IS a permanent account

Multiple Choice: Please provide explanation for my guidance

1. Some entities adjust their accounts and close their books only on an annual basis.For these firms,

a. worksheets may be prepared on an interim basis.

b. worksheets are not needed.

C. worksheets are prepared only on an annual basis.

d. worksheets are not prepared.

2. Closing entries reduce the following type of accounts to a zero balance at the end of the period.

a. income and expenses

b. income summary

C. withdrawals

d. all of the above

3. The closing entry for Salaries Expense, with a balance of P240,000 is

a. Salaries Expense 240,000

Income Summary 240,000

b. Salaries Expense 240,000

Salaries Payable 240,000

C. Income Summary 240,000

Salaries Expense 240,000

d. Salaries Payable 240,000

Salaries Expense 240,000

4 The purpose of the post-closing trial balance is to

a. provide the account balances for the preparation of the balance sheet.

b. ensure that the ledger is in balance for completion of the worksheet.

C.aid the journalizing and posting of the closing entries.

d. ensure that the ledger is in balance Tor the start of the next period.

5. Which of the following accounts will appear on the post-closing trial balance?

a. building

b. depreciation expense-building

C. owner withdrawals

d. service revenues

6. A final check on the adjusting and closing process is provided by the

a. worksheet. C. post-closing trial balance.

b. financial statements. d. adjusted trial balance.

7. if the last item on a trial balance reads "Owner's Equity", this must be the

a. post-closing trial balance. C. adjusted trial balance.

b. unadjusted trial balance. d. reversed trial balance.

8. If a trial balance were to be prepared on the first day of the new year, and the account Salaries Expense had a credit balance, you would know that

a. the trial balance is a post-closing trial balance.

b. the adjusting entries have been recorded.

C. the trial balance is an adjusted trial balance.

d. a reversing entry has been made.

9. Reversing entries are

a. optional.

b. made to record a change in corporate objectivees.

C. required by generally accepted accounting principles.

d. made prior to preparing a post-closing trial balance.

10. Which of the following comes last in the accounting process?

a. preparation of a post-closing trial balance

b. preparation of an adjusted trial balance

C. worksheet preparation

d. journalizing external transactions

Multiple Choice

Which of the following accounts could appear in an adjusting entry, closing entry and reversing entry?

a. Interest Income

b. Salaries Payable

c.Depreciation Expense-Buildings

d. Accumulated Depreciation-Buildings

2.When an entity has earned a profit, the profit amount is entered on the work sheet on the

a. debit side of the Income Statement columns and the credit side of the Balance Sheet columns.

b. credit side of the Income Statement columns and the debit side of the Balance Sheet columns.

c. debit side of both the Income Statement and the Balance Sheet columns.

d. credit side of both the Income Statement and the Balance Sheet columns.

3. Probably the last account to be listed on a post-closing trial balance would be

a. Salaries Payable.

b. Salaries Expense.

C. Owner's Capital.

d. Income Summary.

4 When there is a loss, the entry to close the Income Summary account is

a. debit Loss and credit Income Summary.

b. debit Owner's Capital and credit Income Summary.

C. debit Income Summary and credit Loss.

d. debit Income Summary and credit Owner's Capital.

5. On the completed work sheet, which set of columns usually should be out of balance after the initial footing?

a. Balance Sheet columns only

b. Adjusted Trial Balance columns only

c. Income Statement columns only

d Both Income Statement and Balance Sheet columns

6 The post-closing trial balance contains

a. real accounts only.

b. nominal accounts only.

C.both real accounts and nominal accouns

d. neither real accounts nor nominal accounts.

7. Which financial statement does Income Summary apped?

a. Income statement

b. Statement of changes in equity

C. Balance sheet

d. It does not appear in any financial statement.

8. When an entity has suffered a loss, the loss amount is entered on the worksheet sheet on the

a. debit side of the Income Statement columns and the credit side of the Balance Sheet columns.

b. credit side of the Income Statement columns and the debit side of the Balance Sheet columns.

C. debit side of both the Income Statement and the Balance Sheet columns.

d. credit side of both the Income Statement and the Balance Sheet columns.

9. An important purpose of closing entries is to

a. adjust the accounts in the ledger.

b. set nominal account balances to zero at the start of the next period.

C.set real account balances to zero at the start of the next period.

d. help in preparing financial statements.

10. Which of the following sequences of documents or records describes the proper sequence in the accounting cycle?

a. Source documents, ledger, journal, financial statements

b. Journal, source documents, ledger, financial statements

C. Source documents, journal, ledger, financial statements

d. Ledger, source documents, journal, financial statements

11. Closing entries will

a. increase the Owner's Capital balance.

b. decrease the Owner's Capital balance.

C. not affect the Owner's Capital balance.

d. either increase or decrease the Owner's Capital balance.

12. Which of the following accounting cycle steps comes before the othersjQuery2240798723834917866_1607872408519

a. The financial statements are prepared.

b. Closing entries are recorded and posted.

C. Source documents are analyzed.

d. Adjusting entries are recorded and posted.

13. Closing entries ultimately will affect

a. total liabilities.

b. the Cash account.

C. total assets.

d. the Owner's Capital account.

14. If no adjustments are needed for a particular entity, its

a. post-closing trial balance will be identical to its trial balance.

b. adjusted trial balance will be identical to its post-closing trial balance

c. trial balance will be identical to its adjusted trial balance.

d. trial balance, adjusted trial balance, and post-closing trial balance will be identical.

15. Which of the following accounts is not closed during the closing process?

a. Income Summary

b. Owner's Capital

c. Commissions Revenues

d. Owner's Withdrawals

16. Which of the following could not possibly be a closing entry?

a. Debit Income Summary and credit Owner's Capital

b. Debit Owner's Capital and credit Owner's Withdrawals

C. Debit Income Summary and credit Owner's Withdrawals

d.Debit Owner's Capital and credit Income Summary

17. In preparing closing entries, which of the following columns of the work sheet are the most helpful?

a. Adjustments columns

b. Adjusted Trial Balance columns

C.Income Statement columns

d. Balance Sheet columns

18. The primary objective of reversing entries is to

a. correct errors.

b. Simplify the bookkeeping associated with accruals from the prior period.

b. transfer the balance of the expense accounts to the c. Owner's Capital account and set the accounts equal to zero.

d. place the expenses for the current period in the proper accounts.