JUSTINE MARIE A.

BALDERAS
BSA 1

Chapter 6: Business Transactions and their Analysis

ACTIVITY 1: JOURNAL ENTRIES

Instruction: Provide the journal entries to record the transactions described below. You do not need
to provide a short description for the journal entries.
1. Owner contributes ₱600,000 to the business.
2. The business obtains a loan of ₱400,000.
3. Purchase of inventory worth ₱200,000 on cash basis.
4. Purchase of inventory worth ₱500,000 on account.
5. Sale of goods for ₱900,000, on account. The cost of the goods sold is ₱400,000.
6. Payment of ₱400,000 as settlement of accounts payable.
7. Collection of ₱500,000 on accounts receivable.
8. Purchase of equipment worth ₱480,000.
9. Drawings of owner amounting to ₱10,000.
10. Payment for interest expense of ₱5,000.
1. CASH 600,000
OWNER’S EQUITY 600,000
2.CASH 400,000
NOTES PAYABLE 400,000
3. INVENTORY 200,000
CASH 200,000
4. INVENTORY 500,000
ACCOUNTS PAYABLE 500,000
5. ACCOUNTS RECEIVABLE 900,000
SALES 900,000
COST OF SALES 400,000
INVENTORY 400,000
6. ACCOUNTS PAYABLE 400,000
CASH 400,000
7. CASH 500,000
ACCOUNTS RECEIVABLE 500,000
8. EQUIPMENT 480,000
CASH 480,000
9. OWNER’S DRAWING 10,000
CASH 10,000
10. INTEREST EXPENSE 5,000
CASH 5,000

ACTIVITY 2: MULTIPLE CHOICE

Instruction: Record the transactions in the journal provided below. Indicate the dates and provide a
brief description for each journal entry.
Dates Transactions
Nov. 1, 20x1 A business owner provides ₱2,000,000 cash as investment to the business.
Nov. 5, 20x1 The business obtains a ₱500,000 loan and issues a promissory note.
Nov. 8, 20x1 The business acquires equipment costing ₱1,000,000 on cash basis.
Nov. 16, 20x1 The business purchases inventory costing ₱200,000 on cash basis.
Nov. 30, 20x1 The business sells goods costing ₱135,000 for ₱300,000 on cash basis.
Dec. 1, 20x1 The business sells goods costing ₱180,000 for ₱400,000 on account.
Dec. 4, 20x1 The business purchases inventory costing ₱600,000 on account.
Dec. 9, 20x1 The business collects ₱100,000 accounts receivable.
Dec. 17, 20x1 The business pays ₱200,000 accounts payable.
Dec. 28, 20x1 The business owner made temporary withdrawal of ₱120,000 cash from the Business

JOURNAL
DATES ACCOUNT TITLES DEBIT CREDIT
NOV. 1 20x1 CASH 2,000,000
OWNER’S CAPITAL 2,000,000
to record the contribution by the owner
NOV. 5 20x1 CASH 500,000
NOTES PAYABLE 500,000
To record the loan obtained
NOV. 8 20x1 EQUIPMENT 1,000,000
CASH 1,000,000
To record the acquisition of equipment
NOV. 16 20x1 INVENTORY 200,000
CASH 200,000
To record the purchase of inventory
NOV. 30 20x1 CASH 300,000
SALES 300,000
To record sale of goods
COST OF SALES 135,000
INVENTORY 135,000
To charge the cost of goods sold as expense
DEC. 1 20x1 ACCOUNT RECEIVABLE 400,000
SALES 400,000
To record the sale of goods
COST OF SALES 180,000
INVENTORY 180,000
To charge the cost of goods sold as expense
DEC. 4 20x1 INVENTORY 600,000
ACCOUNTS PAYABLE 600,000
DEC. 9 20x1 CASH 100,000
ACCOUNTS RECEIVABLE 100,000
To record the collection of accounts receivable
Dec. 17 20x1 ACCOUNTS PAYABLE 200,000
CASH 200,000
To record the payment of accounts payable
DEC. 28 20x1 OWNER’S DRAWING 120,000
CASH 120,000
To record the drawings of the owner