Reference no: EM132768170
Questions -
Q1. On January 1, 2016, Jupiter Company acquired the copyright to a book owned by Garner for royalties of 15% of future book sales. Royalties are payable on September 30 for sales in January through June of the same year, and on March 31 for sales in July through December of the preceding year. During 2016 and 2017, Jupiter remitted royalty checks to Garner as follows: March 31 September 30 2016 P - P250,000 2017 220,000 400,000
Jupiter sales of the Garner book totaled P3,000,000 for the last half of 2017. How much Royalty Expense should Jupiter report in its 2017 income statement?
Q2. At December 31, 2017, the unadjusted trial balance shows Office Supplies of P60,000 and Office Supplies Expense of P101,000. The December 31, adjusting entry debited Office Supplies Expense of P17,000. After the December adjusting entries have been posted , what is the correct balance in the Office Supplies account on December 31, 2017?
Q3. Milkmaid, Inc. maintains its accounting records on the cash basis but restates its financial statements to the accrual method of accounting. Milkmaid had P600,000 cash basis pretax income for 2014. The following information pertains to Milkmaid for the years ended December 31, 2014 and 2013:
2014 2013
Accounts Receivable P400,000 P200,000
Accounts Payable 150,000 300,000
Under the accrual method, what should Milkmaid report in its December 31, 2014 income statement as pretax income?
Q4. On November 1, 2017, Pluto Company paid P36,000 to renew its insurance policy for three years. At December 31, 2017, Pluto's unadjusted trial balance showed a balance of P900 for Prepaid Insurance and P44,100 for Insurance Expense. What amount should be reported for Prepaid Insurance and Insurance Expense, respectively in Pluto's December 31, 2017 financial statements?
Q5. The accrual income statement of Carnation, Inc. included the following expenses for 2017: Depreciation Expense - P65,000; Salaries and Wages - P189,000; Interest Expense - P36,000.
The comparative balance sheets reported the following related accounts:
12/31/17 12/31/16
Accumulated Depreciation P96,000 P154,000
Accrued Salaries and Wages 8,000 12,000
Accrued Interest Payable 10,500 7,000
Considering only the data above, what is a pure cash basis income statement would report expenses for 2017?
Q6. Bannister Inc.'s fiscal year ended on November 30, 2009. The balance in the prepaid insurance account as of November 30, 2009, was P35,200 (before adjustment) and consisted of the following policies:
Policy Date of Date of Balance in Number Purchase Expiration Account 279248 7/1/2009 6/30/2010 P14,400 694421 12/1/2007 11/30/2009 9,600 800616 4/1/2008 3/31/2009 11,200 P35,200 The adjusting entry required on November 30, 2009, would be
Q8. Sky Company collected P12,350 in interest during 2009. Sky showed P1,850 in interest receivable on its December 31, 2009, balance sheet and P5,300 on December 31, 2008. What is the interest revenue on the income statement for 2009?
Q9. At December 31, 2017, the Mars Company had a P990,000 balance in its Advertising Expense account before any year-end adjustments relating to the following: ·
Radio advertising spots broadcast during December 2017 were billed to Mars on January 4, 2018. The invoice cost of P50,000 was paid on January 15, 2018. ·
Included in the P990,000 is P60,000 for newspaper advertising for a January 2018 sales promotional campaign. What should be Mars advertising expense for year ended December 31, 2017?
Q10. Under GAAP Company's accounting system, all insurance premiums paid are debited to Prepaid Insurance. For interim financial reports, GAAP makes monthly estimated charges to insurance expense with credits to Prepaid Insurance. Additional information for the year ended December 31, 2017, is as follows: Prepaid Insurance at December 31, 2016 P105,000 Charges to insurance expense during 2017 (including a year-end adjustment of P27,500) 437,500 Prepaid Insurance at December 31, 2017 122,500 What was the total amount of insurance premiums paid by GAAP during 2017?