Indicate the effects of each given transaction on the balance of the assets, liabilities and equity of the business.
Use parentheses to indicate
deductions. After each transaction, write the new balance of the account. Check the equality of the accounting equations based on the new
balances.
1. The proprietor made initial cash investment of ₱100,000 in his business.
2. Paid for the required permits and licenses before the start of business operations.
3. Bought furniture, on cash basis, ₱12,500.
4. Bought equipment from Imperial Equipment Store, on credit term, ₱24,800.
5. Paid for supplies to be used in the operations, ₱4,500.
6. Paid the rent of the current month, ₱10,000.
7. Rendered services to clients, on cash basis, ₱24,500.
8. Rendered services to clients, on credit term basis, ₱5,000.
9. Made a partial payment on the amount due to Imperial Equipment Store, ₱10,000.
10. Collected from the clients, to apply on account, ₱3,000.
11. Obtained a ₱25,000 loan from an associate.
12. Withdrawals of the proprietor, for his personal use, ₱25,000.
Indicate the effects of each given transaction on the balance of the assets, liabilities, equity, income and expense of the business.
1. Purchased furniture for cash, ₱12,000.
2. Paid the light and water bills of the previous month, ₱4,400.
3. Bought from Times Engineering Company some shop tools, ₱14,400. Paid ₱4,400 in cash, the balance is on credit term.
4. Complained to Times Engineering Company about some defective shop tools. Instead of returning the tools a price reduction (rebate) of
₱1,000 was given by the seller.
5. Received ₱48,400 income from services rendered during the month.
6. Sold an old electric fan for ₱120.
7. Paid the salary of the technician, ₱11,500.
8. Bought shop supplies for cash, ₱2,800.
9. Rendered services to Vicente Castro, ₱6,000. Castro made a partial payment of ₱2,000, balance on credit term.
10. Paid half of the amount owed to Times Engineering Company.
11. Andres Gaerlan, the proprietor, withdrew cash for personal use, ₱6,000.
12. Collected half of the amount due from Vicente Castro.
13. Obtained a ₱50,000 loan from the bank in exchange for a promissory note.
14. Paid one-year fire insurance premium, ₱3,900.
15. Andres Gaerlan, the proprietor, increased his capital by ₱70,000.
16. Signed a contract with Velfast Construction Co., an independent contractor for the construction of a shop, which is expected to cost
₱5,000,000. The building will be used by Andres Gaerla in the early part of the following year.
17. Andres Gaerlan brought home a table valued at ₱1,000 for the use of his child.
18. Settled in full the promissory note payable to the bank. Interest on the loan amounted to ₱1,000.
19. Collected in full the balance of Vicente Castro.
20. Bought additional shop supplies on credit terms, ₱2,800.
For each of the given transaction, indicate the item of value received and the corresponding value given up.
1. Ordered additional shop tools and equipment from Weldone Co., ₱80,000.
2. Purchased for cash some chairs, tables and cabinets, for use in the shop, ₱38,000.
3. Paid for the electric and telephone bills, ₱2,750.
4. Bought shop tools and equipment from Agape Industries, Inc., on account, ₱48,500.
5. Eleazar Sison, the proprietor, increased his investment from ₱200,000 to ₱300,000. Corresponding amount of cash was transferred to the
business.
6. Sold for cash some old furniture with a book value of ₱2,500.
7. Eleazar Sison took home, for his family’s use, an old table with ₱2,750 book value.
8. Paid half of the amount due to Agape Industries, Inc.
9. Services rendered to clients, for cash, ₱45,300.
10. Services rendered to clients, on credit terms, ₱38,600.
11. Signed a contract with Vargas Construction for the construction of a small shop which is expected to cost ₱1,500,000.
12. Applied for a ₱1,000,000 bank loan. This amount will be used partly to finance the construction of the shop.
13. Collected from the clients ₱18,600, to apply to their open accounts.
14. Paid the wages of the shop assistants, ₱28,800.
15. Bought shop supplies from Nueva Ecija Shop, ₱8,750, on cash basis.
16. Returned to Nueva Ecija Shop some supplies that are defective, ₱2,850.
17. The application for a bank loan was approved. Received cash of ₱980,000. The bank deducted service and documentation fees amounting
to ₱20,000.
18. Paid Vargas Construction for the cost of constructing the building, ₱1,470,000.
19. Returned unused building construction materials. Received a cash refund of ₱50,000.
20. Shop tools and equipment ordered from Weldone Co. arrived. Paid cash of ₱80,000, the amount due to the supplier.
21. Paid for miscellaneous expenses incurred during the period, ₱25,450.
22. Collected the full balance due from the clients.
23. Paid the balance due to Agape Industries, Inc.
