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  • Bookkeeping Equation

    Uploaded by

    Jake Galison
    13 views6 pages
    1. Jose Cruz invested PHP 5,000 cash into a barber shop. He then purchased furniture for PHP 3,000 and equipment for PHP 2,500 on credit. 2. Mr. Cruz earned PHP 1,200 in income from his business. 3. He paid PHP 637 in transportation costs, decreasing his cash and income. Double-entry bookkeeping is used to track the business's assets, liabilities, and proprietorship.

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    1. Jose Cruz invested PHP 5,000 cash into a barber shop. He then purchased furniture for PHP 3,000 and equipment for PHP 2,500 on credit. 2. Mr. Cruz earned PHP 1,200 in income from his business. 3. He paid PHP 637 in transportation costs, decreasing his cash and income. Double-entry bookkeeping is used to track the business's assets, liabilities, and proprietorship.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    13 views6 pages

    Bookkeeping Equation

    Uploaded by

    Jake Galison
    1. Jose Cruz invested PHP 5,000 cash into a barber shop. He then purchased furniture for PHP 3,000 and equipment for PHP 2,500 on credit. 2. Mr. Cruz earned PHP 1,200 in income from his business. 3. He paid PHP 637 in transportation costs, decreasing his cash and income. Double-entry bookkeeping is used to track the business's assets, liabilities, and proprietorship.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 6

    Double-entry Bookkeeping

    1. Jose Cruz invested Php 5000 in cash in a barber


    shop.
    Analysis:
    Cash
    Capital
    a. Php 5000

    Assets = Liabilities + Proprietorship


    Jose Cruz
    Php 5000

    2. Mr. Cruz purchase furniture worth Php 3000.


    Analysis:
    Asset =
    Liabilities + Proprietorship
    Cash
    Furniture
    Jose Cruz,
    Capital
    a. Php 5000
    Php 5,000
    =
    b. Php
    Php 3000
    3000
    =
    Balance
    Php 3000
    Php 5000
    Php
    =
    2000

    3. Jose Cruz bought equipment worth Php 2500 on


    credit and promised to pay after 60 days.
    Asset
    =
    Liabilities + Proprietorship

    Cash

    a.
    Php5000
    b.Php3000
    Bal.
    Php
    2000

    Furnitu Equipm
    re
    ent

    Account Jose
    s
    Cruz,
    Payable Capital
    Php
    5000

    Php
    3000
    Php 3
    000

    Bal.
    Php
    Php 2000 3000

    Php
    5000
    Php
    2500
    Php
    2500

    Php
    2500
    Php
    2500

    Php
    5000

    Asset

    Php 7500

    Php

    7500

    4. Mr. Cruz earned Php 1200 income from his


    business.
    Analysis:
    Cash

    Furnitur Equipm
    e
    ent

    Account
    s
    Payable

    a. Php
    5000
    b.
    -Php3000
    Bal.
    Php 3000
    Php 2000
    Php
    2500
    Bal.
    Php 3000 Php
    Php 2000
    2500

    c.

    Jose
    Incom
    Cruz,
    e
    Capita
    l
    Php
    5000

    Php
    5000
    Php 2500
    Php 2500 Php
    2500

    d. Php
    1200
    Bal. Php
    2000

    Php 3000 Php


    2500

    Php 2500 Php


    5000

    Php
    1200
    Php
    1200

    When Jose Cruz earned income, he is increasing


    cash of his business. His asset increased as well as
    proprietorship.
    Asset

    Liabilities

    Cash

    -Php 3200

    Furniture

    -Php 3000

    Equipment

    -Php 2500

    Total Asset

    Php 8700

    and

    Proprietorship
    Accounts Payable - Php
    2500
    Jose Cruz Capital - Php
    5000
    Income
    Php 1200
    Total liabilities and
    proprietorship
    Php 8700

    5. Paid transportation cost Php 637


    Assets
    = Liabilities +
    Proprietorship
    Cash

    a.
    P5000
    b.
    P3000
    Bal.
    P2000
    c.

    Furnit
    ure

    Equipm
    ent

    Accou
    nts
    Payabl
    e

    Jose
    Incom Remark
    Cruz,
    e
    s
    Capita
    l
    Beginning
    P5000
    capital

    P3000

    Furniture

    P3000

    Bal.
    P2000
    d.
    P1200
    Bal.
    3200
    e.
    P637

    P 3000

    Bal.
    P2563

    P3000

    P5000
    P2500

    P 2500

    P2500

    P 2500

    Equipme
    nt on
    Account
    P5000
    P1200

    P 3000

    P2500

    P2500

    P5000

    P1200
    P637

    P2500

    Income
    received

    Transpor
    tation
    expense
    s

    The payment of transportation decreases cash. If it


    decreases cash, it decreases income also. Such
    kind of payment is called expense.

    Asset
    Cash

    -P2 563

    Furniture

    - P 3000

    Equipment

    -P 2 500

    Total asset

    - P8 063

    Liabilities and
    Proprietorship
    Accounts Payable- P 2
    500
    Jose Cruz Capital P
    5000
    Income P563
    Total Liabilities and
    Proprietorship
    -P8
    063

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