Chapter 1 Activity 2
Problems
Friendly Convenience Store: Cash
Friendly Convenience Store is managed by Juana Dela Cruz. Juana asked you to determine the balance of
her cash account as of December 31, 20x1. you determine the following:
1. She kept some cash in the store as change fund. The cash count revealed 3 pieces of 100 pesos
bills, 5 pieces of 50 pesos bills, 5 pieces of 20 pesos bills, 5 pieces of 10 peso coins, 10 pieces of 5
pesos coins, 10 pieces of 1 pesos coins and 25 pieces of 25 centavo coins.
2. Two of her regular customers gave Juana the following checks in payment of debts:
a. P 1,540 check dated December 31, 20x1
b. P 2,432 check dated January 2, 20x2
3. There are two banks accounts in the name of the store with the following balances:
a. Balance of the savings account on December 31, 20x1 according to the passbook is P 26, 780
b. A time deposit certificate for P100,000 for 90 days
Report to Juana Dela Cruz the balance of the cash and cash equivalents account of Friendly
Convenience Store.
Hint:
Denomination Number of Bills Peso Amount
Problem 2
Friendly Convenience Store: Accounts Receivable
Juana asked you to compute how much Maria Reyes owed to the store. Juana sells to Maria on credit.
Maria pays every 15th and 30th of the month. Maria’s listings are reproduced below:
Maria Reyes
Balance P 124
September 5 2 bottles of cola (P12 each)
September 15 1 bar of laundry soap (P50)
October 3 1 sachet of fabric softener (P50)
October 8 1 small can of sardines (P25)
October 15 Payment: P200.00
October 25 2 bags of chips (P30 each)
October 30 Payment: P100.00
November 16 1 sachet of laundry soap (P50)
November 22 2 kilo of rice (P44 per kilo)
November 30 Payment: P100.00
December 1 5 sachets of shampoo (P15)
December 15 Payment: P100.00
December 22 1 small cans of sardines (P25)
December 27 2 kilo of rice (P44)
December 28 1 small bar of bath soap (P20)
December 29 5 sachets of shampoo (P15)
December 30 Payment: P100.00
Hint:
Maria Reyes
Balance P 124
September 5 2 bottles of cola (P12 each)
September 15 1 bar of laundry soap (P50)
October 3 1 sachet of fabric softener (P50)
October 8 1 small can of sardines (P25)
October 15 Payment: P200.00
October 25 2 bags of chips (P30 each)
October 30 Payment: P100.00
November 16 1 sachet of laundry soap (P50)
November 22 2 kilo of rice (P44 per kilo)
November 30 Payment: P100.00
December 1 5 sachets of shampoo (P15)
December 15 Payment: P100.00
December 22 1 small cans of sardines (P25)
December 27 2 kilo of rice (P44)
December 28 1 small bar of bath soap (P20)
December 29 5 sachets of shampoo (P15)
December 30 Payment: P100.00
Net Receivables ?
Problem 3
Friendly Convenience Store: Invetory
Before Juana Opened the store on January 1, 20x2 she asked you to help her count the merchandise
inside the store. The result of the count are given below:
Merchandise Cost
2 bags of candy P30 per bag
10 sachets of coffee P6 per sachet
10 sachets of laundry powder P15 per sachet
1 sack of rice (50 kilos) P1,800 per sack
10 cans of sardines P15 per can
10 chocolate bars P20 per can
5 notebooks P25 per notebook
Note:
1. The chocolate bars were on consignment from Tsokolate-Eh
2. Of the 5 notebooks inside the store, one is used for listings of customer credit.
Report to Juana Dela Cruz the balance of the merchandise inventory account of Friendly Convenience
Store.
Problem 4
Friendly Convenience Store: Prepayments
Juana paid premium of P2,500 for one year fire insurance in the name of the store on October 1, 20x1.
How much should prepaid insurance be on December 31, 20x1?
Problem 5
Friendly Convenience Store: Property, Plant, and Equipment
On January 1, 20x0 Juana purchased an electronic cash register to be used in the Friendly Convenience
Store. The cash register was purchased at a cost of P15,000. Juana depreciates the cash register over
five years. Determine the following:
1. Equipment
2. Annual depreciation as of December 31, 20x1
3. Accumulated depreciation as of December 31, 20x1
4. Net book value of Equipment as of December 31, 20x1
Problem 6
Friendly Convenience Store: Accounts Paybale
On November 15, 20x1, Juana Dela Cruz purchased five sacks of rice at P1,800 per sack. The credit term
is 2/10, n/30. Determine how much Juana should pay given the following payment dates:
1. November 25, 20x1
2. December 15, 20x1
Problem 7
Friendly Convenience Store: Notes Payable
Read the excerpt of the Promissory Note below:
Promissory Note
November 1, 20x1
Promise to Pay. For value received, Friendly Convenience Store, represented
by Juana Dela Cruz the manager, (Borrower) promises to pay United Bank
(Lender) P25,000 (Twenty-five thousand pesos) and interest at the yearly rate
of 6% on the unpaid balance as specfified below.
Installments. Borrower will pay five payments of P5,000 each at monthly
intervals on the 30th day of the month. First payment is due on November 30,
20x1.
Application of Payments. Payments will be applied first to interest and then
to principal.
Prepayment. Borrower may prepay all or any part of the principal without
penalty.
Loan Acceleration. If Borrower is more than five days late in making any
payment, Lender may declare that the entire balance of unpaid principal is
due immediately together with the interest that has accrued.
Answer the following questions:
1. Who will record the Notes Payable?
2. Who will record the Notes Receivable?
3. Compute for the payment due on November 30, 20x1 and December 30, 20x1.
4. Determine the balance of Notes Payable as of December 31, 20x1
Problem 8
Friendly Convenience Store: Accrued Expense
Juana hired Elena Reyes as storekeeper with salary of P400 per day. Elena is paid every Saturday for
work rendered during the week. Sunday is her day-off. December 31, 20x1 falls on a Thursday.
Determine the balance of Salaries Payable to be reported on the Store’s SFP as of December 31, 20x1.
Problem 9
Friendly Convenience Store: Unearned Income
Pedro Benitez, a neighbor of Juana, operates a coffee vending machine business. On October 1, 20x1, he
entered in a contract with Juana to rent a small space on the countertop of the Store where he can put
his coffee vending machine. The rent is P500 per month. Pedro paid six months advance rent on October
1, 20x1. How much should be reflected as Unearned Rent Income on the Store’s SFP as of December 31,
20x1.
Problem 10
Friendly Convenience Store: Long-term Liability
In order to construct the store, Juana borrowed P50,000 from Universal Bank and P25,000 from United
Bank. Terms of the loans are as follows:
Universal Bank: the bank requires Juana to pay five monthly installments of P5,000 plus interest on the
unpaid balance, The loan was taken on November 1, 20x1 and first monthly installments is due on
November 30, 20x1
Which of the two loans should be reported as Long-Term Liability on the Store’s calendar year 20x1 SFP?