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Problem#l
Accounting Events

Which of the following events would be recognized in the accounting records of Rogelio
Ceradoy HR Consultants on the date indicated?

Feb. 15 Ceradoy HR Consultants offers to purchase a piece of l~nd for

Pl,400,000. There is a high likelihood th~t the offer will be
accepted.
Mar. 2 Ceradoy HR Consultants receives notice that its rentals for an
office space will incre~se from PS0,000 to P60,000 per month
effective April 1.
Apr. 29 Ceradoy HR Consultants receives its electricity bill for the month of
April. The bill is due on May 9.
July 10 Ceradoy HR Consultants places an order for an office equipment
costing Pl0B,000.
Aug. 6 The office equipment erdered on July 10 is delivered. Payment is
not due until Sept. 1.
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Problem#2A
Elements of Financial Statements

Assets Liabilities owner's Equity

a. 760,000 360,000 ?
b. 860,000 ? 592,000
c. ? 108,000 760,000
d. 626,600 376,240 ?
e. ? 800,000 (100,000)

• Required: Fill in the amount ofthe missing element of financial position.

Problem #2B

a. Jimmy Delgado Pest Control has assets of P600,000 and owner's equity of P4So,ooo.
b. Margie Clavano Realtors has liabilities of P530,000 and owner's equity of P410,000.
c. Marko Fuentes Plumbing Contractor has assets of P473,000 and liabilities of
Pl53,700.
d. Ryan Morales Acting Studio has liabilities of P147,000 and owner's equity of
P236,SOO.
e. Fely Monarca Dance has assets of P624,000 and liabiHties of P237,000.

Required: Compute the amount of the missing element of financial position.

Problem#2C

a. At the beginning of the year, the assets of Cleofe Arib Services were P360,000 and
its owner's equity was P200,000. During the year, assets increased by P120,000 and
liabilities increased by P-~0,000. What was the owner's equity at the end of the
year?

b. At the beginning of the year, Cora Gabayan Calling Station had liabilities of Pl00,000
and owner's equity of P96,000. If assets increased by P40,000 and liabilities
,decreased by P30,000, what was the owner's equity at the end of the year?
nd
c. The liabilitie~ of Lenore Loqueloque Stylist equal one-third of the total assets, a
the owner's.equity is P240,000. What is the amount of the liabilities?

Required: Use the accounting equation to answer each of the questions above.
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Problem#3A
Income and Expenses

Income Expenses Profit

(Loss)
a. 840,000 ? 360,000
b. 2,400,000 ? 540,000
C. 1,300,000' 860,000 ?
d. ? 2,000,000 720,000
e. ? 1,800,000 (400,000)

Required: Supply the missing element of performance.

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Problem#3B

a. A small accounting firn:i has income.of P325,000 and expenses of P237,000.

b. · An advertising agency has expen.s~es of P163,000 and profit of P42,000.
c. A computer-training outfit has expenses of P153,000 and loss of P27,500.
d. A medical practitioner has income of.P737,000 and profit of Pl68,000.
e. An environment consultant has income of P362,000 and loss of P20,000.

Required: In each of the preceding five situations, determine the amount of the missirg
element of performance.
Problem#4
Transaction Effects oli the Basic Accounting Model

During the month of May, Galicano Del Mundo Review had the following transactions:

A L OE
a. Paid salaries for May, P54,000.

b·. Acquired equipment on credit, P90,000.

c. Purchased supplies in cash, P3,000.

d. Additional investment by owner, P120,000.

e. Received payment for services rendered,

PlB,000.

f. Made partial payment on equipment

acquired on credit, P30,000.

g. Billed customers for services performed,

P48,000.
h. Withdrew cash for personal use, P45,000.
i. Received payment from customers already
billed, P9,000.
j. Received bills for utilities to be paid next
month, P2,100.

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.
Problem#S
Transaction Effects on the Basic Accounting Model

The following are some transactions of Virginia Yacapin Services:

A L OE

a. Received cash ,as additional investment.

Purchased supplies on account.
b.
Charged customers for services made on
c.
account.
Rendered services to cash customers.
d.
Paid cash for rent on building.
e.
Collected on account receivable in full.
f.
Paid cash for supplies.
g.
Returned supplies purchased on account.
h.
Paid cash to settle accounts.
i.
Paid cash to owner for personal use.
j.

Required:
For each transaction, indicate whether the assets (A), liabilities (L) or owner's equity
(OE) increased(+), decreased(-) or did not change (0) by placing the appropriate sign in
the appropriate column. · '
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problem#8
Transactions In a Completed Worksheet

Asuncion Alcala, to be able to guide the accountancy students in their pursuits for CPA
glory, established the AA Tutorial Services. On May 1, 2015, she contributed P70,000 as
Investment to start the business. During the month, she entered into several
transactions. Note that she made no withdrawals during the month. The following is
the transaction worksheet prepared by her student-assistant:

Accounts Office Accounts Notes Alcala,

Cash + Receivable + Equipment = Payable + Payable + Capital

1. +70,QO0
+70,000
-45,000 +45,000
2.
3. +30,000 +10,000 +20,000
4. +18,000 +11,000
5. -5,000 ·S,000
6.• +7,000 +7,000
7. -10,000 -10,000
8. +15,000 ·15,000
9. -7,000 -7,000

Required:

1. Describe each of the above transactions. ·

2. If these transactions represent the operations of AA Tutorial s ~.es during the
month of May, what was the amount of profit or loss before deprec1at1on?
problem#10
EffedS of Transactions

The following s~lected transactions were completed by Roberto orcajada Delivery

service during July 2015: '

--- 1.
2.
Cash received from delivery services, P92,700.
Paid creditors on account, P20,000.

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3_. Received cash from owner as additional investment, P600,000:
4. Paid advertising expense, PS,000.

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5. Billed customers for delivery services on account, PSS,200.
6. Purchased supplies for cash, P6,000.
7. Paid rent for July, P20,000.

- 8. Received cash from customers on account, P25,440.

9. Determined that the cost of supplies on hand was Pl,440 so
P4,560 of supplies were used durfr)g the !TIOnth.
10. Owner withdrew cash for personal use, P20,000.

Indicate the effects of each transaction on the space provided:

a. Increase an 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 #13 , .
Recording Transactions In a Financial Transaction Worksheet

Nelson Daganta formed the Liceo Signages on Oct. 1, 20-15. He deposited P250,00o.
. D . h in
GE Money Bank under the name of the new· business entity. unng t e month of
October 20~5, the following tra.nsactions occurred:

Oct. 2 Acquired a service vehicle in the amount of P195,000 on account.

3 Acquired supplies for cash, P57,000.
9 Received P87,S00 cash for sign~. painted.
10 Paid the month's rent, P25,000.
11 ·Painted signs for Cagayan Mobile on account, P170,000.
12 Paid PSS,000 on account from Oct. 2.
16 Withdrew P25,000 for personal use.
23 Collected P35,000 from Cagayan Mobile.
27 Paid salaries of P57,000 for the month.
30 Paid BayanTel P7,500 for communication services for the month.
31 Paid a bill from AdAsia for PS;soo of advertising for the month.

Required:
Establish the following accounts in a financial transaction worksheet: Cash; Accounts
Receivable; Supplies; Service Vehicle; Accounts Payable; and Daganta, Capital. Record in
the worksheet the transactions listed above.
problem #22
Entering Initial Balances and Recording Transactions

presented below is th e balance sheet for the Leopoldo Medina Nursing Home:

Leopoldo Medina Nursing Home

Balance Sheet
Dec.31,2015

Assets
Cash P 16,000
Accounts Receivable 165,000
Supplies 21,000
Land 90,000
Nursing Home · 350,000
Nursing Equipment 160,000
• Total Assets P802,000

Liabilities and Owner's Equity

Liabilities
'Notes Payable P350,000
Accounts P.ayable 47,000
Total Liabilities P397,000

Owner's Equity
Medina, Capital 405,000 ·
Total Liabilities and Owner's Equity P802,000
, I
During the month of January 2016, the following transactions took place:
(

Jan. Z ·Acquired.supplies on a.ccount, ~17,500.

6 Collected P82,000 from patients for servifes provided in 2015.
10 Acquired nur~ing equipment on account, P35,000.
11 Billed patien~ P167,000 for nursing fees.
12 Paid P31,000 on accounts. payable.
17 Paid nursing salaries, P24,000.
20 Paid utilities expense, P9,000.
25 Medina withdrew Pl0,000 from the business.
27 Received a bill from the Ryan Morale~ Ad Agency for P12,500 for ·
advertising expense incurred during the month.
31 Paid P15,000 of the notes payable.

Required:
l. Enter the Dec. 31, 2015 balances in a financial transaction worksheet.

2- Record the transactions for the ,month of January 2016.

L
 . Problem #29
Identification of Errors

On Sept. 1, 2015, Helenita Ruiz established Ruiz Delivery Service. During the month, the
entity had the following transactions:

a. Helenita Ruiz invested P240,000 in the business (increase Cash; increase Ruiz,
capital).
b. Bought two used delivery vans from The Van Lot for P200,000 and paid PS0,000 as a
down payment (increase Delivery Equipment, P200,000; decrease Cash, PS0,000·
increase Accounts Payable, PlS0,000). '
c. Received P25,000 in cash for delivery services (increase Cash; increase Delivery
Revenues).
d. Received bill from Bicol News for advertising, P3,500 (increase Advertising Expense;
decrease cash).
e. Billed Naga Surgical Supply for delivery services provided, P6,200 (increase Accounts
Receivable; increase Delivery Revenues). ·
f. Received and paid telepho11e bill, Pl,000 (decrease Cash; decrease Telephone
Expense).
g. Ruiz invested in his business office equipment having a fair market value of P9,600
(increase Office Equipment; decrease Cash).
h. Received and paid bill for gas and oil, Pl,S00 _(decrease cash; increase Maintenance
Expense).
i. Paid P3,500 to Bicol News to pay account in full (increase Advertising Expense;
increase Cash).
j. Received P29,000 cash for delivery services performed (increase Cash; increase
Delivery Revenues).
k. Ruiz withdrew Pll,000 for personal use (decrease Cash; increase Salaries Expense).
I. Received P4,000 from Naga Surgical Supply to apply on account (increase Cash;
increase Delivery Revenues).
m. Paid salaries to part-time employee, PS,000 (increase Salaries Expense; decrease
Cash). ·

Required:

Find six errors that were made in recording the transactions, and state how they ·should
have been recorded.