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PT 1 Transaction Analysis

1. The owner invested cash in the business, increasing assets and owner's equity. 2. Items were purchased on account, increasing assets and liabilities. 3. A computer was bought with a down payment decreasing assets and increasing liabilities. 4. Money was borrowed from the bank with a note, increasing assets and liabilities.

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Janela Venice Santos
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94 views3 pages

PT 1 Transaction Analysis

1. The owner invested cash in the business, increasing assets and owner's equity. 2. Items were purchased on account, increasing assets and liabilities. 3. A computer was bought with a down payment decreasing assets and increasing liabilities. 4. Money was borrowed from the bank with a note, increasing assets and liabilities.

Uploaded by

Janela Venice Santos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PERFORMANCE TASK #1

TRANSACTION ANALYSIS

Exercise 1-1 Accounting Equation Analysis

Analyze the effect of the following selected transactions on the three accounting elements by writing
I for increase D for decrease and NE for no effect. Identify the Asset, Liability and Owner’s Equity
account(s) affected by the transactions. Use the format below.

TRANSACTION ASSETS LIABILITIES OWNER’S EQUITY


#1 I Office Equipment NE - I Owner, Capital

TRANSACTIONS:

1. The owner invested cash in the business.


2. Purchased office supplies on account.
3. Bought a computer on account. Terms: 30% down payment, 40% through a 30-day 10% note,
balance on account.
4. Borrowed money from the bank and issued a 120-day 16% note.
5. The owner made additional investment of chairs and tables.
6. Bought automobile for office use. Terms: 20% down payment and balance payable in 5 years
with the automobile given as collateral.
7. Returned some office supplies bought in #2 due to wrong specifications.
8. Paid the personal liability of the owner.
9. The owner withdrew office supplies for his personal use.
10. The owner paid the electricity bill of the firm from his personal money.

Fundamentals of ABM1
DLSU IS Senior High School
Period 3, SY 2020-2021 Page | 1
Exercise 1-2 Analyzing the Effects of Business Transactions on the Income Statement

Analyze the effects of the following business transactions on the income statement of Dr. Puz Tiso
Dental Clinic for the month of April.

1. Received ₱65,000 from various patients for services rendered during April.
2. Received ₱5,000 from a patient for services rendered during March.
3. Received ₱3,000 from a patient for services to be rendered during May.
4. Paid rent for April, ₱9,000.
5. Received the power bill from MERALCO for April, ₱4,000.
6. Paid the salary of the secretary for April, ₱8,000.
7. Paid the water bill from Maynilad for April, ₱500.
8. Received ₱50,000 loan proceeds from ABC Bank.
9. Paid for the repair of one of the computers, ₱2,500.
10. Received additional investment of ₱20,000 from Dr. Puz Tiso during April.

Required:

1. Enter the above transactions with the following column headings:

Transaction # Revenue Expense Net income

2. All income accounts are entered under the revenue column and extended to the net income
column as addition.

3. All expense accounts are entered under the expense column and extended to the net income
column in parentheses to signify deductions.

4. FOOT the three money columns to obtain total revenues, total expenses, and the net income.

Fundamentals of ABM1
DLSU IS Senior High School
Period 3, SY 2020-2021 Page | 2
Exercise 1-3 Expanded Accounting Equation Analysis

Required:

1. Copy the following column headings to show the monetary effects of the transactions below
on each account.
.
Accounts Office Prepaid Prepaid Office
Date Cash Receivable Supplies Insurance Rent Building

Office Furniture & Accounts Mortgage Alpha, Account


Equipment Fixtures Payable Payable Capital Title

2. Use parentheses to indicate decreases or deductions.


3. Indicate the specific Account Title at the right column of the “Alpha, Capital” account if the
account involved is an income, expense, or drawing account.
4. Foot all columns after taking into account all the transactions and double rule all totals.
5. Check the equality of the accounting equation by computing for total assets, total liabilities,
and capital: Assets = Liabilities + Capital (Owner’s Equity)

Transactions for August 2020:

1 Alpha Omega opened an account with BPI under the Alpha & Omega Business Agency’s name
and deposited ₱850,000 cash. He also invested his two personal computers which he acquired
a year ago for ₱20,000 each but with a fair market value of ₱15,000 each.
2 Paid barangay and municipal taxes, ₱3,500.
3 Bought a small office condominium for ₱500,000, giving ₱250,000 cash and signing a
mortgage payable in 10 years for the balance.
4 Hired a secretary with a monthly salary of ₱8,500.
5 Bought office tables and chairs on credit from Mansion, Inc., ₱40,000.
6 Billed a client for services rendered, ₱20,000.
7 Purchased computer ink, coupon bond paper and ball pens to be used in the office; terms:
cash basis, ₱4,500.
8 Paid fifty percent of the amount owed to Mansion, Inc.
9 Francis withdrew cash of ₱50,000 and two reams of bond paper worth ₱1,000 for personal
use.
10 Paid ₱400 for the repair of one of the computers.
11 Received ₱5,000 as payment for the services rendered to one of their clients.
12 Collected one half of the amount due from client of August 6th.
13 Paid one year rent for a special machine to be used in business operations, ₱30,000.
14 Paid one year insurance of the office condominium, ₱25,000.
15 Paid one half of the salary of the secretary

- End -

Fundamentals of ABM1
DLSU IS Senior High School
Period 3, SY 2020-2021 Page | 3

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