Financial Accounting Quiz: ABM Company

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Questions and Answers

What is the balance of ABM Company’s Office Supplies account as of January 1, 2023?

P12,540

What are the total purchases of office supplies during the year?

P3,460

What is the total amount of office supplies at the end of the year?

P11,090

How much will be the adjustment to the Office Supplies Expense account on December 31, 2023?

P4,910 Signup and view all the answers

What is the interest rate of Promissory Note No. 1?

15% Signup and view all the answers

What is the term of Promissory Note No. 1?

120 days Signup and view all the answers

What is the amount of Promissory Note No. 1?

P40,000 Signup and view all the answers

How much is the balance of the Interest Expense account in December 31?

To be calculated Signup and view all the answers

What is the rent per month of Tenant No. 1?

P8,000 Signup and view all the answers

What is the lease term of Tenant No. 1?

2 years Signup and view all the answers

How much is the balance of the Accrued Rent Income account as of December 31, 2023?

To be calculated Signup and view all the answers

What is the purchase price of the dental equipment?

P420,000 Signup and view all the answers

What is the estimated useful life of the dental equipment?

5 years Signup and view all the answers

What is the scrap value of the dental equipment?

5% of the acquisition cost Signup and view all the answers

How much is the balance of the Depreciation Expense account on December 31, 2023?

To be calculated Signup and view all the answers

How much is the total accumulated depreciation account on December 31, 2024?

To be calculated Signup and view all the answers

What is the balance of Accounts Receivable?

P1,000,000 Signup and view all the answers

What is the estimated percentage of gross accounts receivable that will become uncollectible?

3% Signup and view all the answers

How much is the required allowance for doubtful accounts for the year?

To be calculated Signup and view all the answers

What is the regular hourly rate of Angelo B. Mahusay?

P100.75 Signup and view all the answers

How many hours did Angelo B. Mahusay work during the two-week period?

80 hours Signup and view all the answers

What are the total deductions of Angelo B. Mahusay?

P1,110 + P533.32 + P124.70 Signup and view all the answers

Study Notes

ABM Company Financial Statements

ABM Company's Office Supplies account had a balance of P12,540 as of January 1, 2023, and purchases during the year amounted to P3,460.
The inventory of supplies at the end of the year revealed a total of P11,090, indicating an adjustment to the Office Supplies Expense account on December 31, 2023.

Promissory Notes

ABM Accounting Services issued two promissory notes:
- Note 1: issued on November 16, 2023, with an interest rate of 15% and a term of 120 days, amounting to P40,000.
- Note 2: issued on September 30, 2023, with an interest rate of 12% and a term of 12 months, amounting to P35,000.
The balance of the Interest Expense account on December 31, 2023, can be calculated based on these promissory notes.

Sub-Leased Portions of Building

ABM Leasing Company sub-leased portions of its building to three tenants:
- Tenant 1: started on October 16, 2023, with a rent of P8,000 per month for a 2-year lease term.
- Tenant 2: started on November 1, 2023, with a rent of P12,000 per month for a 1-year lease term.
- Tenant 3: started on December 1, 2023, with a rent of P10,500 per month for a 6-month lease term.
The balance of the Accrued Rent Income account as of December 31, 2023, is the total rent owed by the tenants, which has not been received yet.

Purchase of Dental Equipment

ABM Company purchased dental equipment on July 16, 2023, for P420,000, paying P100,000 in cash and signing a 90-day note for the balance.
The equipment has an estimated useful life of 5 years and a scrap value of 5% of the acquisition cost.
The balance of the Depreciation Expense account on December 31, 2023, can be calculated based on the equipment's useful life and scrap value.
The total accumulated depreciation account on December 31, 2024, can also be calculated.

ABM Company Trial Balance

ABM Company's trial balance at December 31, 2023, includes:
- Accounts Receivable: debit balance of P1,000,000 and credit balance of P8,000.
The company estimates that 3% of gross accounts receivable outstanding will become uncollectible, so the required allowance for doubtful accounts for the year can be calculated.

Angelo B. Mahusay - Gross Pay

Angelo B. Mahusay has a regular hourly rate of P100.75.
During a two-week period, he worked 80 hours and had deductions of P1,110 for withholding income tax, P533.32 for SSS premium payable, and P124.70 for PhilHealth premium.

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Description

This quiz covers financial statements and accounting concepts related to office supplies and promissory notes of ABM Company. Test your knowledge of financial accounting principles and practices.