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Chapter 1 Assignment 1

This document provides 4 problems related to accounting transactions. Problem 1 lists account balances and asks to identify which has the greatest owner's equity. Problem 2 lists transactions for a delivery service and asks to identify the effect of each on the accounting equation. Problem 3 provides transactions for a cleaning service startup and asks to record the effects and prepare financial statements. Problem 4 lists transactions for a review service and asks to identify the effects on assets, liabilities, and owner's equity for each.

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LADY TEDD PONGOS
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3K views

Chapter 1 Assignment 1

This document provides 4 problems related to accounting transactions. Problem 1 lists account balances and asks to identify which has the greatest owner's equity. Problem 2 lists transactions for a delivery service and asks to identify the effect of each on the accounting equation. Problem 3 provides transactions for a cleaning service startup and asks to record the effects and prepare financial statements. Problem 4 lists transactions for a review service and asks to identify the effects on assets, liabilities, and owner's equity for each.

Uploaded by

LADY TEDD PONGOS
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CHAPTER 1 ASSIGNMENT 1

SHOW YOUR SOLUTION. NO SOLUTION, NO CREDIT.

Problem 1
ASSETS LIABILITIES OWNER’S EQUITY
A. 760,000 360,000 400,00
B. 860,000 268,00 592,000
C. 868,00 108,000 760,000
D. 626,600 376,240 250,360
E. 700,00 800,000 (100,000)

Problem 2
The following selected transactions were completed by Geryl Maglasang
Delivery Service during July 2015:
1. C Cash received from delivery services, P92,700.
2. D Paid creditors on account, P20,000.
3. C Received cash from owner as additional investment,
P600,000.
4. EPaid advertising expense, P5,000.
5. CBilled customers for delivery services on account, P55,200.
6. A Purchased supplies for cash, P6,000.
7. E Paid rent for July, P20,000.
8. A Received cash from customers on account, P25,440.
9. E Determined that cost of supplies on hand was P1,440 so
P4,560 of supplies were used during the month.
10. A Owner withdrew cash for personal use, P20,000.

Indicate the effects of each transaction on the pace provided:

A. Increase in asset, decrease another asset


B. Increase an asset, increase a liability
C. Increase an asset, increase owner’s equity
D. Decrease an asset, decrease a liability
E. Decrease an asset, decrease owner’s equity

Problem 3

Teofisto Arenas recently established a business that will operate as Arenas


Cleaning Service. The transactions for February 2015 are presented below.

Feb. 1 Deposited P62,000 cash in a bank account in the name of the new
entity.
3 Acquired cleaning supplies on account, P21,400.
5 Acquired cleaning equipment on account, P15,600.
6 Acquired an old service vehicle costing P47,000 for the
business, paying P10,000 cash, and financing the remaining
P37,000 by issuing a note payable.
7 Paid rent on office space for the month, P7,300.
9 Received P31,800 cash for cleaning services rendered.
10 Paid for a newspaper advertisement, P1,700.
12 Paid for insurance for the next six months by recording prepaid
insurance, P4,800.
13 Paid P9,000 on account.
14 Paid miscellaneous expenses, P2,200.
15 Billed customers P18,600 for cleaning services rendered.
16 Paid salaries, P8,400.
20 Received P9,800 from customers billed on Feb. 15.
22 Paid amount due on the note payable, P2,400.
25 Paid telephone expense, P900.
28 Paid salaries, P7,900.
CHAPTER 1 ASSIGNMENT 1

28 Billed customers for cleaning services rendered, P22,500.


28 Withdrew P10,000 from the business.

Required:

1) Indicate the effect of each transaction and the balances after each
transaction, in a tabular form.
The following accounts will be needed:

Cash
Accounts Receivable
Cleaning Supplies
Prepaid Insurance
Cleaning Equipment
Service Vehicle
Notes Payable
Accounts Payable
Arenas, Capital
Arenas, Withdrawals
Cleaning Revenues
Salaries Expense
Rent Expense
Advertising Expense
Telephone Expense
Miscellaneous
CHAPTER 1 ASSIGNMENT 1
CHAPTER 1 ASSIGNMENT 1
CHAPTER 1 ASSIGNMENT 1

2) Prepare an income statement, a statement of changes in owner’s equity,


and a balance sheet.
CHAPTER 1 ASSIGNMENT 1
CHAPTER 1 ASSIGNMENT 1
CHAPTER 1 ASSIGNMENT 1

Problem 4
During the month of May, Romeo Pantas Review had the following
transactions:
A L OE
A. Paid salaries for May, P54,000. ______ ___o___ ______
B. Acquired equipment on credit, __+____ ____+__ ____o__
P90,000.
CHAPTER 1 ASSIGNMENT 1

C. Purchased supplies in cash, ______ ____o__ ______


P3,000.
D. Additional investment by owner,
P120,000. ____+__ ____o__ ___+___
E. Received payment for services
rendered, P18,000. ___+___ ____o__ ____+__
F. Made partial payment on equipment
acquired on credit, P30,000. ______ ______ ___o___
G. Billed customers for services
performed, P48,000. ___+___ ___o___ ____+__
H. Withdrew cash for personal use,
P45,000. ______ ___o___ ______
I. Received payment from customers
already billed, P9,000. ___o___ ___o___ ___o___
J. Received bills for utilities to
be paid next month, P2,100. _____o_ ___+__ ______

Required:
For each transaction, indicate whether the assets (A), liabilities (L)
or owner’s equity (OE) increased (+), decreased (-), or did not change
(o) by placing the appropriate sign in the appropriate column.

********** END *********

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