Assignment 2

NATIONAL UNIVERSITY
Manila, Philippines
College of Business & Accountancy
Department of Accountancy
SY 2021 -2022
BAINTE1X: Integrated Accounting Fundamentals
ASSIGNMENT 2: ACCOUNTING EQUATIONS (ANALYSIS OF BUSINESS

TRANSACTIONS)
13. Angela De Dios, a business graduate student who was working in Think
Computer, a
company selling all kinds of computers, decided to become an entrepreneur
and put up an
internet shop. The following are the transactions for the month of March.
01 Angela started an internet ship called “Playnet.com” by investing her

savings of P50,000
and the proceeds from the sale of her car of P300,000.
05 Angela hired two workers to assist her in the shop for a salary of
P3,000 per week.
10 Mr. Lee, the lessor required Angela to pay for two months rent deposit,
P10,000.
15 Paid P15,000 for building materials to fix the shop, P8,000 for furniture
and fixtures,
P45,000 for one unit of air con and two units of electric fan
20 Purchased supplies for cash, P1,500
25 The shop was ready for the installation of the computer units. Angela
purchased 12 units
of computer hardware from Think PC. She paid 50% in cash for
P150,000 and a note for
the balance payable in 24 monthly installments starting April 20.
Analyze the transactions using the following accounts for the assets and
liabilities: Cash,
Supplies, Rent Deposit, Furniture and Fixtures, Equipment, Leasehold
Improvement, Notes
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Payable, and De Dios Capital
Required: a) Use the format of demonstration Problem 12 but extract the
balances only after the
last transaction. From the balances, prove the accounting equation.
b) Prepare a statement of financial position.
A).
ASSETS
= LIABILITIES CAPITAL
1-Mar Cash 350,000 350,000
5-Mar NONE
Prepaid
10-Mar Rent 10,000
-10,000
15-Mar PPE 68,000
Cash -68,000
20-Mar Supplies 1,500
Cash -1,500
25-Mar PPE 300,000

Cash -150,000 150,000
B)
Playnet.com
Statement of Financial Position
As of March 25
LIABILITIES AND
ASSETS: CAPITAL:
Cash 120,500 N/P 150,000
Supplies 1,500 Capital 350,000
Rent Deposits 10,000
FF 8,000 Total: 500,000
Leasehold Imp. 15,000
Equipment 345,000
Total Assets: 500,000
14. Cely Kalaw started a new business in advertising called the Straight and
True Advertising.
The following are the transactions which you are required to summarize
using the
Copyclear format. Extract the balances only after the last transaction.
Include money
columns for Cash, Art Supplies, Office Supplies, Equipment, Furniture and
Fixtures,
Accounts Payable, Notes Payable and Kalaw, Capital.
Feb. 5 She transferred half of her P300,000 savings to the account

of the business.
Feb. 9 Purchased art supplies and paid P15,000 in cash
Feb. 16 Purchased photo equipment at a cost of P105,000 from Camera
Work. She paid
one third and promised to pay another one third at the end of the
month.
Feb. 20 A friend, Lisa, bought a fac machine a year ago for P10,000. She
sold this to Cely
who promised to pay her P6,000 after thirty days.
Feb. 22 Purchased paper for the fax machine and paid cash, P1,500
Feb. 25 Purchased furniture and fixtures on credit, P8,000
Feb. 28 Paid one half of the account owing to Camera Work and issued a
note promising
to pay the balance within 30 days.
Additional requirement:
a. What amount did you use in recording the cash investment? What concept
supports this?
b. What amount did you use in recording the fax machine? What concept
supports this?
c. Prepare a statement of financial position based on the final balances.
CAPITA
DATE ASSETS = LIABILITIES + L
Februar Cash Art Office Furnitur Equipme Notes Accoun Kalaw'
y Supplie Supplie es & nt Payabl ts s
s s Fixtures e Payable capital
150,00 150,00
5 0 0
-
9 15,000
-
16 35,000 105,000 35,000 35,000
20 15,000 6,000 6,000
22 -1,500 1,500
25 8,000 8,000
-
28 17,500 -17,500
Balanc 15000
e 81000 15,000 1500 8000 111000 41000 25500 0
A) Amount for cash investment = 150,000 ; Concept: Full Disclosure

Principle
B) Amount for fax machine = 6,000 ; Concept: Cost Principle
C)
Straight and True Advertising

As of February 28
LIABILITIES AND
ASSETS: CAPITAL:
Cash 81,000 N/P 41,000
Supplies 16,500 A /P 25,500
FF 8,000 Capital 150,000
Equipment 111,000
Total: 216,500
Total Assets: 216,500
15. The following transactions were entered into by Dr. Jo Valdez for the
month of June:
04 Jo Valdez opened “Jo’s Health Spa” by investing P1,500,000 cash and

half of a lot
inherited by Jo and her sister Ann worth P500,000.
07 Interviewed a nurse and a business graduate to work for her for a
salary of P15,000
08 Valdez bought for cash P900,000 worth of equipment and P15,000
worth of supplies
10 Bought furniture and fixtures from a friend at a cost of P150,000
promising to pay after 7
days. Only P80,000 of this was placed in the clinic. The remaining
P70,000 furniture and
fixtures were placed in her condominium unit.
12 Applied for a P2,500,000 business loan from a bank by mortgaging her
inherited lot. The
money will be used to construct the clinic.
14 Withdrew supplies worth P2,000 for personal use.
15 The loan was approved, and the money deposited for the account of
the health spa.
17 Paid one half of the amount due on the furniture and fixtures
30 A two-story clinic was constructed on the inherited lot. The
construction cost amounted
to P2,400,000. Terms: down payment P500,000, and a note for the
balance.
a) Analyze the transactions in an accounting equation similar to the

Copyclear demonstration
format. Include money columns for Cash, Supplies, Land, Building,
Equipment, Furniture and
Fixtures, Accounts Payable, Loans Payable, Valdez Capital.
b) In recording June 04, 10, 14, 30 what accounting principle/concept did you
apply?
c) Prepare a statement of financial position as at June 30, using the final
balances.
A)
DATE ASSETS = LIABILITIES + CAPITAL

June Cash Supplies Land Building Equipment Furnitures Loans Accounts Valdez's
and Payable Payable Capital
Fixtures
4 1,500,000 500,000 2,000,000
8 -900,000 900,000
-15,000 15,000
10 150,000 150,000
14 -2,000 2,000
15 2,500,000 2,500,000
17 75,000 75,000
30 -500,000 2,400,000 1,900,000
2,000,00
Balance 2,583,000 17,000 500,000 2,400,000 900,000 225,000 2,500,000 2,125,000 0
B) June 04, Accounting Principle: Full Disclosure Principle; June 10,

Accounting Principle: Time Period Principle; June 14, Accounting Principle:
Materiality Principle; June 30, Accounting Principle: Going Concern Principle.
C)
Jo's Health Spa

As of June 30
ASSETS: LIABILITIES AND
CAPITAL:
2,583,00
Cash 0 L/P 2,500,000
Supplies 17,000 A /P 2,125,000
FF 225,000 Capital 2,000,000
Equipment 900,000
Land 500,000 Total: 6,625,000
2,400,00
Building 0
6,625,00
Total Assets: 0
16. Mina Narvaez formed the “Cavite Day Care Center for Kids”. The
following are the
transactions for the month of April to prepare the center in time for the
opening in June.
Analyze the transactions using the Copyclear demo format but extract the
balances only
after the last transaction. Include the following money columns: Cash,
Furniture and
Fixtures, Supplies, Equipment, Car, Accounts Payable, Notes Payable,
Narvaez Capital and
Narvaez Drawing.
April 1 Ms. Narvaez, using her personal savings transferred cash of

P300,000 for the
account of the center.
2 Purchased play equipment for use in the center costing
P100,000. Terms: a down
payment of P50,000 and the balance was evidenced by a note
payable in
installments at the end of the month for five months.
10 She purchased three compute sets, a printer and a fax machine
for the center
amounting to P300,000 by using her own bank express card
15 Hired a carpenters to build chairs, tables and cabinets for the
center and for her
office. Total cash paid amounted to P100,000
20 Purchased school supplies (coloring books and materials)
P15,000 and medical
supplies for cash, P10,000.
23 Bought a slightly used car for the center. A 50% down payment
was made for
P75,000 with the balance due after thirty days.
25 Ms. Narvaez withdrew P500 worth of medical supplies for her
personal use
30 Paid for the first installment on the note
DATE ASSETS = LIABILITIES + CAPITAL DRAWINGS
April Cash Supplies Car Equipment Furnitures Notes Accounts Narvaez Narvaez
and Payable Payable Capital Drawings
Fixtures
1 300,000 300,000
2 -50,000 100,000 50,000
10 300,000 300,000
-
15 100,000 100,000
20 -25,000 25,000
23 -75,000 150,000 75,000
25 -500 500
30 -10,000 10,000
Balanc
e 40,000 24,500 150,000 400,000 100,000 60,000 375,000 300,000 500
a.) Prepare a statement of financial position as at April 30, 2015 using the
final balances.
Cavite Day Care Center for Kids
As of April 30
LIABILITIES AND
ASSETS: CAPITAL:
Cash 40,000 N/P 60,000
Supplies 24,500 A /P 375,000
100,00
FF 0 Capital 300,000
400,00
Equipment 0 Drawings 500
150,00
Car 0
Total: 735,500
714,50
Total Assets: 0
17. In each number cite what quantitative attribute that is violated:

understandability, prudence,
materiality, timeliness, completeness, substance over form, representational
faithfulness.
a. Miss Sanchez, a fresh graduate, was hired as bookkeeper of Skin Care, a

manufacturer of
beauty products. She prepared a statement where total assets amounted to
P2,500,000 including
waste basket P100, broom P150 and dustpan P80.
Violated Quantitative Attribute/s: materiality,
b. Mr. Bo, the bookkeeper of Nature Spa, prepared a statement of the owner
on April 13,
presenting only three items: Cash P50,000, Other Assets P4,500,000 for all
six kinds of assets
and Total Claims of creditors and owner P3,250,000.
Violated Quantitative Attribute/s: completeness, representational
faithfulness.
c. A firm spent P400,000 for cooking wares which was recorded as cooking
expense.
Violated Quantitative Attribute/s: understandability, prudence,
materiality, representational faithfulness.
d. The December 31, 2016 financial reports were submitted to the owner on
April 13, 2017, a
Friday. Deadline for submission to the BIR is April 15, a Sunday.
Violated Quantitative Attribute/s: none
e. The financial reports were presented to the shareholders of Cebu Hospital.

Several issues were
raised by the medical practitioners such as why the cash was down by
P2,500,000. The Chief
Finance Officer had a hard time explaining why profit improved by
P10,000,000 although cash
went down by P2,500,000
Violated Quantitative Attribute/s: understandability, prudence, ,
representational faithfulness.
f. The shareholders had a hard time evaluating the 2016 reports submitted to
them by AJA
Company which showed assets, liabilities and profit for 2016 only. “We can’t
determine trend of
performance nor the improvement in its financial structure.
Violated Quantitative Attribute/s: understandability, timeliness,
completeness, representational faithfulness.
g. Presented as on of the assets in the company’s 2016 statement was a
parcel of land worth
P300,000 but which current market value is P500,000. The Finance Officer
was surprised to see
this account as P500,000 which no additional acquisition was made.
Violated Quantitative Attribute/s: prudence, , representational faithfulness.
h. The company borrowed P500,000 and reported this not as liability but as
revenue.
Violated Quantitative Attribute/s: understandability, prudence, substance
over form, representational faithfulness.
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NATIONAL UNIVERSITY

ASSIGNMENT 2: ACCOUNTING EQUATIONS (ANALYSIS OF BUSINESS

01 Angela started an internet ship called “Playnet.com” by investing her

25-Mar PPE 300,000

Total Assets: 500,000

Feb. 5 She transferred half of her P300,000 savings to the account

A) Amount for cash investment = 150,000 ; Concept: Full Disclosure

Straight and True Advertising

04 Jo Valdez opened “Jo’s Health Spa” by investing P1,500,000 cash and

a) Analyze the transactions in an accounting equation similar to the

DATE ASSETS = LIABILITIES + CAPITAL

B) June 04, Accounting Principle: Full Disclosure Principle; June 10,

Jo's Health Spa

April 1 Ms. Narvaez, using her personal savings transferred cash of

17. In each number cite what quantitative attribute that is violated:

a. Miss Sanchez, a fresh graduate, was hired as bookkeeper of Skin Care, a

e. The financial reports were presented to the shareholders of Cebu Hospital.

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