Activity 2

Required: For all problems that follow - With the use of the given expanded accounting equation, show the monetary effects of each given transaction on the specified assets,
liabilities and proprietorship items of the company. Show the final balance for all items after taking into account all transactions. Use parentheses to indicate deductions or
decreases in the balance of each element. Prove the accounting equation.

Problem 1
Andrie Paul Apolonio opened a dormitory locator business near a college campus. He is the owner of the proprietorship which he named Apolonio Dormitory Locator. During the
first owner of the month of operations, July 2018, Apolonio engaged in the following transactions:
Jul 1 Apolonio invested ₱600, 000 of his personal funds to start the business.
2 Purchased on account office supplies from John Aksel Nyborg Supplies costing ₱5, 000.

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2 Apolonio paid ₱400, 000 cash to acquire a parcel lot near an access road to a college campus named Jasub Sear Olmedo College of Technolgy. He intends to use

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the land as future site for his own dormitory.
7 Paid ₱1, 000 on the account payable he created in July 2 transaction.

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17 Paid ₱20, 000 of personal funds for a vacation.

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29 Paid utilities, water and electricity ₱9, 800.

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31 Apolonio pre-qualified and signed-up clients for dormitory owners. He received cash of ₱19, 000.
31 Paid for office rent, ₱4, 000.

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Assets Liabilities Owner’s Equity
Date

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Accounts Apolonio, Apolonio, Utilities
Cash Office Supplies Land Service Income Rent Expense
Payable Capital Drawings Expense

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Problem 2
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Kenth Brillantes opened a law office. During the first month, he completed the following transactions:
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 Activity 2

2018
Jan. 1 Deposited P200, 000 to the business account to be used for the law office only, as his original investment.
1 Hired secretary for P15, 000 a month.
2 Paid two month advanced rent on a room to be used as his office, P14, 000.
3 Purchased office equipment from John Paulo Del Barrio Company for cash, P12, 700.
4 Purchased books from Joel Ryant Icotanim Bookstore for cash, P6, 500.
5 Paid the newspaper advertisement soliciting applications for a stenographis-clerk vacancy, P5, 000.
4 Purchased a second hand automobile for P210, 000 from Asher Peace Intatano Motors on account.
4 Paid P12, 000 for gasoline and oil of the automobile.

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5 Bought additional office equipment for P13, 000, giving a down payment of P3, 000 and a promissory note for the balance.

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5 Collected client’s retainer’s fee of P10, 000.
15 Paid the half month salary of the secretary, P7, 500.

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15 Brillantes transferred some of his personal books valued at P4, 800 for use in the office.

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16 Made partial payment on the promissory note in the amount of P5, 000.

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16 Rendered legal services to client on account basis, P12, 000.
26 Collected the full amount due from client on January 16 transaction.

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27 Bought furniture and fixtures on cash basis, P14, 000.
28 Returned to seller one defective chair and got a cash refund of P2, 000.

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29 Got an electric typewriter for demonstration purposes. No ownership will be acquired until approval is given to the salesmen. Selling price of the typewriter, P6,
000.

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29 Bought for cash additional books for use in the office, P5, 000.
31 Paid electric and telephone bills for the current month, P4, 578.

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 Activity 2

Assets Liabilities Owner’s Equity

Date
Furniture
Accounts Office Prepaid Library Accounts Notes Brillantes, Service Salaries Advertising Fuel and Utilities
Cash Automobile and
Receivable Equipment Rent books Payable Payable Capital Income Expense Expense oil Expense
fixtures

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 Activity 2

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Problem 3
Kevin Karl Andrade withdrew ₱300, 000 from his personal savings account on June 1, 2018 and deposited the cash in an account for newly established company, Andrade Carpet
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Cleaning Service. During the month of June, the following transactions occurred:
Jun 1 Billed clients ₱330, 000 for carpet cleaning services rendered.
2 Acquired cleaning supplies from Razel Barrientos Supplies on account, ₱45, 000.
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5 Acquired a service vehicle for ₱500, 000 by issuing a note payable in that amount, which will be due on May 2019.
6 Received cash in the amount of ₱120, 000 for carpet cleaning services rendered to Paul John Dalida Company.
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9 Paid ₱15, 000 for cleaning supplies acquired on June 2.

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 Activity 2

13 Paid monthly rent for office space, ₱25, 000.

15 Paid utilities bill of ₱12, 000.
16 Paid salaries of ₱64, 000.
20 Received ₱215, 000 cash from clients billed on June 1.
23 Andrade withdrew ₱75, 000 from business.

Assets Liabilities Owner’s Equity

Date Cleaning
Accounts Cleaning Service Accounts Notes Andrade, Andrade, Rent Utilities Salaries
Cash Service

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Receivable Supplies Vehicle Payable Payable Capital Drawings Expense Expense Expense
Income

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Problem 4
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Paz Bobadilla, an architect, opened her own office on March 1, 2018. During the month, she completed the following transactions connected with her professional practice:
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Mar. 1 Transferred cash from a personal bank account to an account to be used for the business, ₱1, 500, 000.
1 Purchased service vehicle for ₱770, 000, paying ₱200, 000 and giving a note payable for the balance.
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2 Purchased office computer on account, ₱250, 000.

5 Paid cash for supplies, ₱8, 000.
6 Received cash from clients for finished plans delivered, ₱190, 000.
8 Paid cash to creditors on account, ₱200, 000.
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10 Paid miscellaneous expenses, ₱3, 120.

15 Paid installment due on notes payable, ₱200, 000.
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18 Paid gasoline and oil on service vehicle, ₱15, 000.

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 Activity 2
20 Recorded fee earned on plans delivered, payment to be received in April, ₱490, 000.
31 Paid March rent for office, ₱25, 000.
31 Paid cash for monthly insurance, ₱1, 000.
31 Paid salary of assistant, ₱18, 000.

Assets Liabilities Owner’s Equity

Date Accounts Insuranc
Office Service Accounts Notes Bobadilla Bobadilla, Rent
Profession Utilities Fuel and Salaries Miscellaneou
Cash Receivabl Supplies Equipmen e s Expense
t Vehicle Payable Payable , Capital Drawings al Fees Expense Expense oil Expense
e Expense

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Problem 5 (Use Seatwork 1 Problem 3 information.) co rc
The following are the transactions of MJA Document Center for the month of April 2017:
Apr. 1 Abaricio, the owner invested P40, 000 cash and a computer (Office Equipment) worth P 40, 000 to start the business.
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2 An airconditioner (Office Equipment) was bought on cash worth P14, 000.
4 Office supplies bought on credit from BookStore, P500. (Use Asset Method.)
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5 Furniture bought on credit from Abris Furniture, P15, 000.

6 Cash received for encoding and printing services, P5, 000.
7 The documents of Agan Law Office were processed for which they were billed for P6, 000.
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7 Received AKELCO electric bill (Utilities Expense) for the month, P 1, 780.
8 Paid telephone (Utilities Expense), P585.
11 Partial collection from Agan Law Office, P3, 000.
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11 Partial payment made to Abris Furniture, P2, 000.

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 Activity 2
12 Returned to BookStore defective supplies worth P200.
13 Abaricio took cash from the business for personal use.
30 Paid office space rent for the month, P 3, 000.

Assets Liabilities Owner’s Equity

Date Accounts Furniture and Abaricio,
Cash Office Supplies Office Equipment Accounts Payable Notes Payable Abaricio, Capital Service Income Rent Expense Utilities Expense
Receivable Fixtures Drawings

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Problem 6 (Use Seatwork 1 Problem 4 information.)

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The following are the first transactions FOR 2017 of Alipis Graphics Design:
Mar.
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1 Alipis started her new business by depositing P400, 000 in a bank account in the name of Alipis Graphics Design at BDO Kalibo.
5 Computer Equipment costing P145, 000 is acquired on cash basis.
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9 Computer supplies in the amount of P25, 000 are purchased on account. (Use Asset Method.)
11 Collected P90, 000 in cash for designing interactive web sites for two exporters based inside the Iloilo PEZA.
16 Paid P 18, 000 to Ambrocio Bills Express, a one-stop bills payment service company, for semi-monthly utilities.
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17 The entity has service agreements with several Netpreneurs to maintain and update their web sites weekly. The entity billed these clients P40, 000 for services already rendered during the month.
19 Made partial payment of P10, 000 for March 9 purchase on account.
20 Checks totaling P25, 000 were received from clients for billings dated March 17.
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21 Alipis withdrew P30, 000 from the business for his personal use.
27 Ambubuyog Publishing submitted a bill to the entity for P9, 000 worth of newspaper advertisements for this month.
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31 Paid the assistant designer salaries of P18, 000 for the month.
Required: By using the format provided below, indicate the effects of the following transactions on the assets, liabilities and owner’s equity of Alipis Graphics Design . Place () sign for minus figure.
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 Activity 2

Assets Liabilities Owner’s Equity

Date Accounts Computer Computer Service Accounts Alipis, Service Salaries Utilities Advertising Miscellaneou
Cash Notes Payable Alipis, Capital
Receivable Supplies Equipment Vehicle Payable Drawings Income Expense Expense Expense s Expense

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