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Exercises

The document provides a matching exercise and transaction list for Glorious Company. It details 14 transactions involving investments, purchases, sales, payments, collections, and a withdrawal. A table is provided to record what the company owns and owes for each transaction. Additional questions calculate ending balances and profit. The ending cash balance is $233,000, inventory is $56,000, equipment is $300,000, loans payable are $0, and owner's equity contribution is $440,000 (net of $10,000 withdrawal). Profit after all transactions is $23,000.

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John Daniel Berdos
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42 views

Exercises

The document provides a matching exercise and transaction list for Glorious Company. It details 14 transactions involving investments, purchases, sales, payments, collections, and a withdrawal. A table is provided to record what the company owns and owes for each transaction. Additional questions calculate ending balances and profit. The ending cash balance is $233,000, inventory is $56,000, equipment is $300,000, loans payable are $0, and owner's equity contribution is $440,000 (net of $10,000 withdrawal). Profit after all transactions is $23,000.

Uploaded by

John Daniel Berdos
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Berdos, Daniela M.

FLCF
ACCOUNTING 1

Chapter 1

Exercise 1: Matching Type


Match the Company's role with the appropriate counterparty:

Company as Counterparty

1. Investee A. creditor
2. Investor B. customer
3. Debtor C. debtor
4. Borrower D. depository bank
5. Lessee E. employee
6. Lessor F. investee
7. Principal G. investor
8. Employer H. lender
9. Buyer I. lessee
10. Vendee J. lessor
11. Service-provider K. agent
12. Depositor L. seller
13. Vendor M. society
14. Creditor N. taxing authority
15. Taxpayer O. vendee
16. Corporate Citizen P. vendor

ANSWER:

1. Investee - G. Investor
2. Investor - F. Investee
3. Debtor - A. Creditor
4. Borrower - H. Lender
5. Lessee - J. Lessor
6. Lessor - I. Lessee
7. Principal - K. Agent
8. Employer - E. Employee
9. Buyer - L. Seller
10. Vendee - P. Vendor
11. Service-provider - B. Customer
12. Depositor - D. Depository bank
13. Vendor - O. Vendee
14. Creditor - C. Deptor
15. Taxpayer - N. Taxing authotiry
16. Corporate Citizen - M. Society

Exercise 2: "What the Company Owns, What the Company Owes"

Glorious Company, a business entity and a merchandiser of grocery items, made the following
transactions and exchanges:

1. Mr. Lualhati, the owner, started the business by investing P350,000 to the company, composed of
P250,000 cash and a second-hand delivery van priced at P100,000.

2. Bought merchandise from suppliers, P84,000, giving cash.

3. Bought supplies for P7,000 on the accounting.

4. Paid the breakfast that was bought on account.

5. Received additional investments from Mr. Lualhait, the owner, P100,000, in cash.

6. Granted a loan by Metropolis Bank, P75,000, to be paid within four months with 12% interest per
annum.

7. Bought a new delivery van from Harurot Car Dealers, P300,000, for cash.

8. Sold the old delivery van to Malaya Inc. for P100,000, paid in full.

9. Sold merchandise priced at P40,000 for cash. The cost of the merchandise is 70% of its selling price.

10. Sold merchandise priced at P30,000 on the account. The cost of the merchandise is 60% of its selling
price.

11. Paid the weekly salary of couriers, P12,000.

12. Collection of sales on account, P30,000.

13. Paid the loan from Metro bank on due date plus interest.

14. The owner withdraws P10,000 for personal use.


“What the “What the company
No. Transaction Company Counterparty company owns” owes”
Role Role
Item Amount Item Amount
1 Investment Cash and Owner P350,000 Capital P350,000
Delivery Van Contribution
2 Purchase Merchandise Suppliers P84,000 P84,000
Inventory
3 Purchase Supplies Suppliers P7,000 P7,000
4 Payment Salaries Breakfast P12,000
Expense Supplier
5 Investment Cash Owner P100,000 Capital P100,000
Contribution
6 Loan Cash Metropolis P75,000 Loans P75,000
Bank Payable
7 Purchase Equipment Harurot Car P300,000 P300,000
Dealers
8 Sale Cash Malaya Inc. P100,000
9 Sale Cash P40,000 Merchandise P28,000
Inventory
Owner's P12,000
Equity - Cost
of Sales
10 Sale Accounts P30,000
Receivable
11 Payment Salaries Couriers Cash P12,000
Expenses
12 Collection Cash Accounts P30,000
Receivable
13 Purchase Interest Metropolis Loans P7,000
Expense Bank Payable
14 Withdrawal Owner Owner's P10,000
Equity -
Withdrawal

Additional Questions:
1. How much is the ending balance of the following items:

a. Cash
The ending balance of cash can be computed by adding all the cash inflows and subtracting all the cash
outflows. Based on the transactions given, the ending balance of cash is P233,000.
b. Merchandise Inventory
The ending balance of merchandise inventory can be computed by subtracting the cost of goods sold
from the beginning balance of merchandise inventory and adding the cost of merchandise purchased.
Based on the transactions given, the ending balance of merchandise inventory is P56,000.

c Equipment
The ending balance of equipment can be computed by subtracting the accumulated depreciation from
the beginning balance of equipment and adding the cost of equipment purchased. Based on the
transactions given, the ending balance of equipment is P300,000.

d. Loans Payable
The ending balance of loans payable can be computed by adding the loan amount to the interest
expense and subtracting the loan payment. Based on the transactions given, the ending balance of loans
payable is P0.

e. Owner's Equity-Capital Contribution (net of withdrawals)


The ending balance of owner's equity-capital contribution can be computed by subtracting the total
amount of withdrawals from the total amount of capital contributions. Based on the transactions given,
the ending balance of owner's equity-capital contribution is P440,000 (P450,000 capital contribution -
P10,000 withdrawals).

2. How much is the profit after all the transactions (Revenues less Cost and Expenses)?
The profit after all the transactions can be computed by subtracting the cost of goods sold, salaries
expense, interest expense, and cost of sales from the total revenues. Based on the transactions given,
the profit after all the transactions is P23,000 (P70,000 revenues - P47,000 cost of goods sold - P12,000
salaries expense - P8,000 interest expense - P12,000 cost of sales).

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