Test 1Determining the Effects of Omissions of Adjusting Entries

Using the following table, indicate the effect of the following errors of omission on the financial statements classifications listed. If as a result of the omission a classification is overstated, place a (+) in the appropriate space. An understatement is to be indicated by a (-). If the omission has no effect on the classification, place a (0) in the appropriate space.

Effect of Omission

Classification

a

B

C

d

e

f

g

Revenues

Expenses

Profit

Total Assets

Total Liabilities

Owner's Equity

a.Payment for repairs erroneously debited to Building Account.

b.Recorded collection of an account receivable by debiting Cash and crediting a revenue account.

c.Depreciation for the month was omitted.

d.Recorded twice an acquisition of office equipment on account.

e.Recorded the acquisition of office equipment for cash as a debit to Office Equipment and a credit to Depreciation expense.

f.Recorded cash payment for advertising by debiting Repairs Expense and crediting Cash.

g.Rendered services for cash but made no record of the transaction.

Test IIAdjusting Entries and Errors

At the end of June 2020, the first month of operations, the following selected data were taken from the financial statements of Janet Selim, CPA:

Profit for JuneP 39,750

Total Assets at June 30189, 700

Total Liabilities at June 3020,200

Total Owner's Equity at June 30169,500

In preparing the financial statements, adjustments for the following were overlooked:

a.Supplies used during June, P 1,750.

b.Unbilled fees earned at June 30, P 2,900.

c.Depreciation equipment for June, P 2,500.

d.Accrued salaries at June 30, P 1,500.

Required:

1.Journalize the entries to record the omitted adjustments.

2.Determine the correct amount of profit for June and the total assets, liabilities and owner's equity at June 30. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing the columnar table below.

ProfitTotal AssetsTotal LiabilitiesOwner's Equity

Reported AmountsP 39,750P 189,700P 20,200P 169,500

Corrections:

Adjustment (a)___________________________________________________________________

(b)___________________________________________________________________

(c)_____________________________________________________________________-

(d)_____________________________________________________________________

Corrected Amounts _____________________________________________________________________

Test IIIPreparing the Reversing Entries

Some of the adjusting entries of the Sherwin Mark de Oro Apartments on Dec. 31, 2020 is presented below:

2020

Dec. 31Prepaid InsuranceP 25,000

Insurance ExpenseP 25,000

To record unexpired insurance at year-end.

31Interest Receivable17,000

Interest Income17,000

To record accrued at year-end.

31Office Supplies Expense50,000

Office Supplies50,000

To record office supplies used during the period.

31Depreciation expense125,000

Accumulated Depreciation125,000

To record depreciation for the year.

31Salaries expense35,000

Salaries payable35,000

To record salaries at year-end.

31Rent revenues80,000

Unearned Rent revenues80,000

To record liability of unearned rent

Revenue at year-end.

Required: Prepare the reversing entries.

Test IV

Presented below are the Balance Sheet and Income Statement accounts of M. Poliran Allied Services for the quarter ending March 31, 20B:

Balance Sheet Accounts

Cash in BankP 810,000

Accounts Receivable60,000

Estimated Uncollectible Accounts1,000

Prepaid Rent15,000

Unused Supplies10,000

Equipment250,000

Accumulated Depreciation85,000

Accounts Payable72,000

Accrued Advertising18,000

M. Poliran, Capital974,850

M. Poliran, Drawing25,000

Income Statement Accounts

Service Income150,000

Miscellaneous Income15,000

Uncollectible Account850

Depreciation Expense50,000

Rent Expense20,000

Supplies Expense30,000

Taxes and Licenses15,000

Advertising Expense18,000

Utilities Expense12,000

Required:

1.Income Statement

2.Statement of Changes in Owner's Equity

3.Balance Sheet

4.Closing Entries

5.Post-Closing Trial Balance