1) wnat are business_transactions? __ es "A business transaction is_a_trvode_or_exchonge._of _somerning valuable. between __ ___0_sompany_ond_omomer party, such os selting a _prodwot_to_o Customer ____ ____or_nuying_supplies_trom_o_suppiier- these interactions _are_+ne_\ouilctiag, ____\blocks_of A _companyy's _finoncial_records. , helping to_track wat tne ____ ____iousiness gives _ond_veceives __2.) Extexnal_transactions. internal_tansactions 2 ___* External_transoctions ore olbout_ine__tynde_of goods , services_,or_mamet4,__ ____between_o__ company and external entities like _customers.,.suppliers , —__ ____and creditors .mese include -actions_such_oas__sales, purchases, loans ,___— ——and_payments.On_tne, other hand, internal tronsoctions _tnvolve_tne trons fer ____ ____oF value, within tne company. oeten utilizing campomny's_asset_or involving ___inrerdepartmental_actions, like moving inventory between _woreinouses Or ____ ___yesource, allocation _for_vorious projects. Rotn_external_ond_intemal_ ____tvonsattions_are_vital_ for_over seeing _ond__controlling_o business 'S_fiaancigt _____ond_operotional performance. 2 Bive examples _of _extemoal_ironsostions ——— — ___" An external_transacton might encompass o__retai'l_tpusiness setting its ___ ____gnods_to_customers_ond_receiving_payynent ,tike_o customer purchasing, —__ ____9_\aptnp from an electronic store. Similarly, _manufactucing company ___buying_raw_moteriols _from_o_supplier_and making payments for ____ ___4nose_ materials _ond_tne olor A company signiag—o contract wit a____ ___morkéting agency to_ruv_a_pramational_compmign for_weir new product ____ represents _omother_instonce of on external _tronsactons.4. wnat _is_she_ importance of source dowuments? ——Sourne_documents_bnold_a_eritical_role_in accounting toy offering tHe ___ Primary _Ond_verifiabie _proaf_of o_pusiness's _fnonciol tons actions —_—oudits_ond odherence to ox regulations, trereloy_quavownteeriag ——trons parenciy_ond accountability in _o company's simancial_ope rations. *Source_documenis come in various forms including casi receipts. —_—issued_cnecks, imoices _sent_to_customers for _sexvices rendered, wills —_—eceived_from suppliers _for purchased items, cash register tapes, —_—soies_tickets, ond _exchonged nates - These documents all serve as ——-tnaseasset- It Semves 0S ne comer sione_of double entry accounting, ensuring ¥ne._accuurocy of a company's financial records:—%) umat_is_meont oy equities ____— ———————— Equity. denotes #ne_ounership stakes. in_o_ousiness, encapsulating stares or _st0ckS_ouned_oy, individuals or entities, granting tenn. shoe insta —__compony's_assets_and _profirs. Maese_owmersnip_intenest_can. manifest Qs common stock . preferred _ stock, _or_vord ouS—otver_equiity instru mersts = 9) Explain +ye_two types _of equities ____ > Stockholders’ equity > Me _ownership_interest—retained_touy— Ssvore hoiders. ivy ____ —O._company's assets once its delots are _sulbtrocted » > oumer's_equity, + It is comparable to _stocknolderS’ equity out applies to __ businesses _with_one_oumer_or_a_small_ groups ike _ sole _proprietorsiips —_ ——or_portmerships -___ cnet eo RN 10} How is 4ne accounting equation _offected tay \ousiness_tronsactions? Business transaction s_infiuenice tne accounting equation oy. changing the __ ——volues oF its fundamental elements i assets. tiawilities .anc_equatiy -_ ___For_exarNpie, uiven o compan. obtains view ossets, it mises tne asset aside 06 she equation, necessitating on increase in _eltner liaiiiHes or equity ——i0_upnoid ive equaition's cove loolomce. Converse ily, When o lousiness. = __settles_o._delot, it reduces liabilities , prompting o_tarrespanding. —teduction_ir_asset_or_equitt,to_sustain_equitiorium esentiolty, every ___ accounting fransocton_must_confornn_40_4ne_fundaimerntal_principie_of —__ — Accounting equorion + Assets_+ Liabilities + Equity. N.wWnat_ove te _rules_of devit ord credit’) 7 sy increase _in_Asset___pecxease_iin_ascet —_________Decrease_in_Liatbitities __ — Increase. in_tiatbuiries —__ Debit. Decrease in Capitol __§ .0ifes = increase im Capital 4 Signifies, ines * —__Inerease_in_Drowing -—__—_beere.ase_in_Drowing ___ Decrease in Revenue, Amcredse_in_Revenye —_—_____ntreose_in_Expense_pecrease im expense. __ Also, tne folowing, ove_ine_vules of deoit and credit uiniclh guides tre Sustemof occoums: a ——Hist__-_pevit_winot comes in, Credit what goes auth =f ——Second__-_Devit_oli_expenses _oicl_torses, Credit ali incomes ond qoins __ ——Thipd _"_vevolt ane_recetver, Credit tae giver—hercises_for_understanding — —1 Bawa_Agad Repair _snop_\nod_ been in operation for two uYars. Balances Of te_accoumits OS of July. 201A_ove_ shown inne fom provided -_ The fouowing, tronsactions were compieted oy Gawd AQad Repair Shop — ——for_4ine_mantn_of duty» : wonsactions. 2019 | 3] Mr. aldwin Gawa Invested adatiional cas F 50,000- ard $ Borrowed money from Banco de oro for 7001000 - issuing “four ron= interest - pearing— noie—of 501 090—eecln ——}- payoloie at se end of ave nomi Leginning duly \. 1o| Pougnt additional equipment far ¥ 100, 000 - pouing, £50,000 = cOS\_ anc 42, nolance. on account - 12| Bendered services to a customer on account for {_ 26,090 » fe 13 | Bougns supplies for cash for use in se shop # 15,000 - | \S | Poi we _sotories OF Svop empiouees 712,000 - \@| Remmed #2.000-derective supplies vought on suly 13 20] Collected EO‘fo of He Customers account Crefer to July te owner _witrdraws cash for personal use F15,000- Revdieved services for cosn F101 000 - 21 Supplies used for we montn #51500 Cc Si] Paid the note due today _ Instructions + _____0..For eoch transactions olbove, state in Coluwin A dre accounts offecied of _ _______4re_volve received ond volve given oway- In Column &) He occount _ ~ elassifivation OF tne voWwe received and voWe given oway as 40 Asset, —_Liabitity ond capitol ond in Column 0 tne effect on tre account OF *e vows received and yoive given ow iF it is an increase or _— decrease The fivst_tmmngoction ‘nos een done br you: ___. b: Recordi ne. transactions_ond eval ances _ofer each transactions _using___— ___¥he,_tobular_form provided: __ eee = ees ___¢ -Prepare_sne following financia\_siotements a = —— 1: Income statement __ = er ______2_stotement_oF Oymer's. Equity, ee 4 smatement_o¢ _Financial_Position. —_ es —— —____4._Stoement_of _eagn_Hows ___ —O: Effect on tne accounting Equation (write increase or_decrease)_ — Column & coum & coum © vote, account _perected Account Clossification E¢FeCtS Uincrease [recrease) 1 [_ value Note vaiue Received] given Away [Valve seceived mwa | Vole Received) aoa} 35 July, fasin | _aidwin Gown, | __ Asset gapital—| erence ra) Equipment | Carta’ Asset increase | 3] casn wores Pouaioie | __asser Liatoility Increase 10 | Equipment cosy ___ Asset | Asset |_\nereose, & Awe Uoloitity Accounts: Repair Snop ‘ 12_| ceceivorne | ‘Yncome Asset Revenue Increase 13 | supplies tosh Asset. Asset increase, asset WMerease, \nerease—b- Avalysis_o€ Transactions using accounting equotion in _tatovier fora ____ Adwin rete | -eeae—ascounts_| snop_|eouipment} accounts | _woies__| fave —| — norarions. “eee: eceivaive | Suppies | MPT Poyavie | Pavaioe | Carne Bepoir snop tl 25000 .00 125000.00| _ gevenve fo fas womool [| Salaries | tie |-1.000.c0 {_ 12,000.00] sePENse Total_assets. * (162,500 + 12.500 + 1600 + 110.0901 00 Total Liabilities ond capltal = (50.000 + 150,000 + 67.500) = P2062. 500:90 —C. Prepare. tne falowing Financial statements _._Miincomme_Stotennegi —__Baa_Agad Repair sop Income Statement —_——For_tne_montin_ended_siuly 31,2014 ______ee: | ——_Gawo_Agod Repair Slop Statement of Owmer's cavity For +e month ended July 31.2010 July 21.2010 ASSets - Liabilities: __tosn ,. 00 - __ACCOUMS Poupiole, __P 50,000 -__ ___Arcoumns_Receiuote. 12,500- _wotes payoinie — 180,090 Seop_supnilies 1.500 =Noort, motase. in then s ee P._132.500-00- ogi Boome Stily Ne 9 pasa Bolonce July 2b 201Q td 00100-2. dnswer te following questions by using +” Accounting equation * 2cTe \iabilities and oumer's equity of Greenmeadows Repair service. Amount +0 P5:4601000 and P3.150,000_ respectively. G* How_much is se company's assets 7 A> Te compony's asset omaunt to P 8.600:000, 2:2. We tidbilities OF AWnea's BoKe ond Posiries House are equal tO one-dnird OF #ne total osset-Mhe oumers’ equity is P 2.400,000- —G* what is ne. omount of_liabilities? A> Tne \idbiliHes amount to _P_1.200,000 2.3. Ab Yne_beginning of tne year, Maerysiond Reolty's asset is P10,000,000__ Ond owrers’ equitu_is P4.000,000- During, +e_ygor, Ossets increased toy P2,500,000 1 while tiobilities decreased by P 450.000. = ——G> How mucin is_the_owners’ equity ot the endl of te_upar? A+ The owmers? equity at 4ne_end of tne. yparr_amounts_ +0 _P (.950 009 2-4, The owners’ equity OF Sushi Dugstore is P00,000, and the tiobitities is P2EL500+ G+ what is tne companys asset? A* ne company's assets amount to 2951, 500-2.5. m4 tnt end Of Ye _upor 2010, PLDT company nas total assets. of 10,500,090 Ong. 40rOl Jiobilities of P 2,250,000 . During, the yeor 2019, assets increased. by P'%50.4.000 while loblitties increased ‘4 P.s00, 000. G* wnat is Hae cmount of eapital ot tine veining of 209 1 A? re omaynt of capital at ane_beginning, of 4e_year Solutions. + ly, $$$ a _Bquation.\ Assets.» Violbitities + Capital __P 5,450,000 _Equation.’ Assets.> Lidlbilites + Capital __ Saving for jicboilities + ______— A= fl 9,400,000 v= C21 C4) > _#lp__= 2,400,090 __L. = (113) (2,600,000) __ sil xia 100,000 Lolvitihes > P1200,000 _x|s + 1,400,000 _ & = %A400,000 (312) _Asseis > Lidleilities + Capital K+ $000,000 #001000 = 11200 ,000 * 2-400,000 Assets > 2,(600;000233 ~ _Equatian + Uobitities = Assets - Capital Uabilities = 1010001000 - 4,000,000 4 obittHies * @.000.000 [ern ion —Eqorion 3 Assets = Uobilities + Copia . $ ASSIS 210,000,000 _LiabiliKes = &,800,000 + 2,500,000 -__4§0,000 hssets=012,500 000 _Ligbilities +P 5,550,000 Equation = Capital = 4S - Liobiliti a AssetS = 12,500,000 __Lioiitities=__51550,000 End of sre _yeorr ___Copita| ER G.A5GOCO __ _2A..> Equation + Assets = Liobilities 4+ capital __P 257800 00 ee: re as _____Agsets * 10,800,000 __owinities * 21250009 = __ 50,000 ____> $00,000 _} during ane ysar ___ Equation ' Capital + Asse1s - Lioli\ites .. a Assets * 91459000 Uowivties -/11180.000_ Beginning of we Year cago! 2B70000.000) _ aTe owner tonsferred Wer personal b office EaUIPment| Owner's Equity Purcwn i i ; . © urcMOASed, sonitioral office. oftice es fgets d ae Ponisi oF is Gc supplies casin office supplies e.| Bougins office eupplies for cosn | Office Supplies tas pilled clients for services rendered Accounts 9n_accoun ty Receivowle, g. | Received cosh or services rendered cash service pewenve Paid cash for advertising +e initi Adver visi vy. [opening of eo beciaese ‘nial | Merce? cash Received cagh investment from Rizza- sHne_ouner_OF Salon deluxe Received a check from O customer Paid office vent for +e montin 1. | Patol creditors on account ash m.| purcnosed sop equipment for Cosh n. era NY eee ee eae issuing o prom ore o- | Rid tres satarles and woges oF sotaries + wages Expense, cash notes Payovle |_