ADJUSTING ENTRIES PART 1 PRACTICE PROBLEMS
Requirement: Provide your solutions and adjusting entries on December 31 for Square Company.
1. Supplies beginning amounted to 7,000. During the year, a purchase of additional supplies worth 5,600 was
made. At year-end 2,100 were left in stock. Show the solutions and adjusting entries under Asset and
Expense Method.
2. Paid rent for 6 months amounting to 60,000 last October 1
3. A six months advertising contract was entered by the company which requires advance payment of P2,400
on November 1 and was debited to advertising expense.
4. The company has a 5-day workweek. Payday is every Friday. Employees A, B, and C have a weekly salary
of P6,000, P6,500, and P7,000 respectively. December 31 falls on a Tuesday.
5. Utilities bill amounting to 5,600 was received on Dec. 27. The company intends to pay it on Jan. 5 of the
following year.
6. Triangle Company lent Square Corp. an amount of P280,000 on Oct.31 in honor of good business
relationships. The loan bears a 12% interest per annum.
7. 20 hours of services remain unbilled which was already rendered to a customer. The company charges 400
per hour.
8. Last July 1, the company lent Circle company P90 000 at 10% per annum.