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1) Find the Cost of Goods Sold, Gross Profit, and Net Sales Merchandise Inventory, beginning Merchandise Inventory,

end Purchases Purchase Discount Purchase Returns Freight out Freight in Notes Receivable Sales Sales returns and allowance Sales Salaries 10,000 15,000 250,000 10,000 3,000 15,000 5,000 70,000 500,000 35,000 50,000

2) Find Accounts receivable, end ,Allowance for Doubtful Accounts, end, Doubtful Accounts Expense and Net realizable value beginning and end Accounts receivable beginning Allowance for Doubtful Accounts, beginning Sales for the year Cash Sales 25,000 750 800,000 75% of the sales

25% of the credit sales were paid within this year Accounts written off 500 11,000 90,000

Collection from customers last year, excluding recovery Collection of accounts written off in prior years

Bad Debts were estimated to increased to 5% of the Account Receivable

3) On Sept. 1, 2009, Animo Corporation issued a note payable to Land Bank in the amount of P
2,100,000, bearing interest at 12%, and payable in three equal annual principal payments of P700,000. To date, the bank's prime rate was 9%. The first interest and principal payment was made on Sept. 1,

2010. On Dec. 31, 2010, how should be recorded as interest payable? How much is interest expense for 2009?

4) A machine cost a company 154,000. It has a salvage value of 12,000. It was bought last April 1, 2005. It has an estimated useful life of 11 years. How much is the depreciation expense for the year ended December 31, 2009? How much would be the Accumulated depreciation to be reported? How much is the carrying value of the machine? 5) A machine has a carrying value of 100,000 as of December 31, 2009. The machinery was bought for 144,000 on December 31, 2005. Its residual value is 4,000. What is the estimated useful life of the machine? Answers: 1) Merchandise Inventory, beginning Purchases Add: Freight in Less: Purchase Discount Purchase Returns Total Less: Merchandise end Cost of Goods Sold 10,000 3,000__ 13,000 242,000 250,000 5,000 10,000

252,000 15,000 P237,000

Sales Less: Sales returns and allowance Net Sales

500,000 35,000 P 415,000

Net Sales Cost of Goods Sold Gross Profit 2)

415,000 (237,000) 228,000

Accounts Recevable, beg Credit sales, uncollected (800,000*.25*.75) Accounts written off

25,000 150,000 (500) (11,000)

Collection from customers last year, excluding recovery A/R, end P 161,000

A/R, end Percentage for doubtful accounts Allowance for Doubtful Accounts,end

163,500 x .05 P 8,175

Allowance for Doubtful Accounts, end Allowance for Doubtful Accounts, beginning Doubtful Accounts Expense

8,175 (750) P 7,425

A/R, beginning Allowance for Doubtful Accounts, beginning Net realizable value, beginning

25,000 (750) P 24,250

A/R, end Allowance for Doubtful Accounts, end Net realizable value, end

161,000 (8,175) P 152,825

3)

Note payable, Sept 1, 2009 Payment on Sept. 1, 2010 Balance, Sept. 1, 2009 Accrued Interest payable from Sept. 1 to Dec. 31, 2010 (1,400,000 x 12% x 4/12) Jan. 1- Aug. 31, 2010 (2,100,000 x 12% x 8/12) Sept. 1- Dec. 31, 2010 Total Interest Expense for 2009

2,100,000 -700,000 1,400,000

56,000 168,000 56,000 224,000

4) Machine Cost Salvage Value Depreciable Cost Estimated Useful life Depreciation Expense 54, 000 (12,000) 42,000 11

P 3,818.18

Annual Depreciation Expense No. of years which passed Accumulated Depreciation

P 3,818.18 x 4.75

P 18,136.35

5) Depreciable Cost Carrying Value Accumulated Depreciation Years passed Depreciation expense per year Estimated useful life (140,000 10,000) 140,000 (100,000) 40,000 10,000 14 years 4