Requirement: Prepare adjusting entries
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
One of the checks returned on January 15, 2022, dated December 31, 2021 for P2,000.00, for a 2021 operating expenses, was actually not written until January 3, 2022. This check appeared as one of the outstanding checks in the company’s bank reconciliation as at December 31, 2021.
Requirement: Prepare
Transcribed Image Text:You have been engaged to audit FAR EASTERN COMPANY, a new client, for the year ended,
December 31, 2021. The company prepared the trial balance set forth below, as of December 31,2021,the
close of its second year of operations.
Account Titles
Unadjusted Trial Balance
Debit
Credit
Cash
112,600.00
Marketable Securities
72,000.00
Allowance for decline in value of securities
Accounts Receivable - Trade
1,758,220.00
Allowance for doubtful accounts
40,000.00
Accounts Receivable - Others
Advances to affiliate
48,000.00
250,000.00
Inventory, December 31, 2021
Property, Plant and Equipment
Accumulated Depreciation
2,770,000.00
Accounts Payable
Income Tax Payable
Long-term Debt
Ordinary Share Capital
Retained Earnings
Revaluation Increment
Sales
Cost of Sales
2,269,604.00
170,622.00
Operating Expenses
Other Charges
100,000.00
Provision for Income Taxes (35%)
80,954.00
Discontinued Operations (Net)
6,500.00
Cumulative Effect of Change in Accounting Principle (Net)
13,000.00
7,691,500.00
20,000.00
68,100.00
1,240,000.00
408,616.00
71,260.00
60,000.00
2,042,000.00
770,000.00
240,000.00
2,771,524.00
7,691,500.00
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