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Comparison of the balance sheet of outreach at the

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1.Comparison of the balance sheet of OUTREACH at the end of 2016 with itsbalance sheet at the end of 2015 showed a decrease in total assets of P69,000and owner’s equity by P15,000. The change in liabilities during the year wasa.increase of P84,000b.decrease of P84,000c.decrease of P54,000d.increase of P54,000
2.Tung Company had a total assets of P20,000,000 and shareholders’ equity ofP15,000,000 on January 1. During the year, assets increased by P3,000,000 and
PRISM CPA REVIEWliabilities decreased by P1,000,000. Tung Company should report what amount ofshareholder’s equity on December 31?
Page5of11FARUse the following information for the next two questions.For each situation, reconstruction the adjusting entry that was made to arrive at theending balance.Assume that the entity prepares statements and adjusting entriesonly once each year.
3.The following transactions and events relate to Booty Company for the currentaccounting period.a)Sold merchandise costing P450,000 for P100,000 cash and P700,000 on openaccount.A perpetual inventory system is usedb)Purchased land for P1,000,000 cash and a P3,000,000 mortgage.c)Received payment on account, P120,000.d)Estimated that utilities expense for the coming six months will total P80,000.e)Declared a cash dividend totaling P100,000.The dividend will be paid in sixweeks.The foregoing transactions and events increased
4.The trial balance of Mistake Company shown below does not balance. Yourreview of the ledger revealsthe following: (a) Each accounts had a normalbalance.(b) The debit footing in Prepaid Insurance, Accounts Payable, andProperty Tax Expense were each understated by P100. (c) A transposition errorwas made in Accounts Receivable; the correct balances for Accounts Receivableand Service Revenue are P2,750 and P6,690, respectively.(d) A debit posting toAdvertising Expense of P300 was omitted.(e) A P1,500 cash drawing by theowner was debited toMistake Capital, and credited to Cash.Mistake CompanyTrial BalanceDecember 31DebitCreditCashP4,800Accounts Receivable2,570Prepaid Insurance700EquipmentP8,000Accounts Payable4,500Property Tax Payable560Mistake, Capital11,200Service Revenue6,960Salaries Expense4,200Advertising Expense1,100Property Tax Expense800P20,890P24,500The corrected trial balance of the company should show total debits of
PRISM CPA REVIEWPage6of11FAR

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Term
Summer
Professor
N/A
Tags
Balance Sheet, Generally Accepted Accounting Principles, Double entry bookkeeping system, Prism

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