EXERCISE NO.

1 - ACCOUNTING EQUATIONS AND TRANSACTION

ANALYSIS
EXERCISES: General Instructions:

Please -

1. use Excel for all your answers (for Exercises I - V and Transaction Analysis).
2. for Exercises I - IV, do not copy the given amounts anymore but answer
immediately but must be properly identififed.. Make sure all amounts are with
centavos. (Thus if the missing amount is Assets (?), your answer should be:

1. Assets 1,000.00
1,000.00 - format cell to show 2 decimal places.

3. for Exercise V - show your Solution and Formula, thus -

1. Total Assets 100,000.00
2. Total Liabilities 50,000.00
3. Total Owner's Equity
A-L=OE (End) 50,000.00 (*)
4.OE, End + Expenses -
Income = OE, Beg (initial
capital)
OE, End (*) 50,000.00
Total Expenses 9,000.00
Total Revenue/Income (15,000.00)
OE, Beg. 44,000.00

4. for the Transaction Analysis, use the following format: (Below is the same
using the first transaction.)
No. DEBIT CREDIT ACCOUNT NAME AMOUNT
1 Expense Utility Expense 399.00
Increase
Asset Decrease Cash 399.00
2.
EXERCISE I: BASIC ACCOUNTING EQUATION
ASSETS = LIABILITIES + OWNER'S EQUITY (10 pts.)

ASSETS LIABILITIES OWNER'S EQUITY

₱ 100,000.00 ₱ 50,000.00 ?
? ₱ 210,000.00 ₱ 15,000.00
₱ 68,000.00 ? ₱ 10,000.00
₱ 75,000.00 ? ₱ 75,000.00
? ₱ 12,500.00 ₱ 12,500.00
₱ 45,250.00 ₱ 45,250.00 ?
₱ 8,800.00 ₱ 800.00 ?
₱ 2,500,500.00 ? ₱ 480,000.00
? ₱ 90,000.00 ₱ 7,500.00
? ₱ - ₱ 245,200.00

IDENTIFY THE ELEMENT AND

EXERCISE II : THEIR NORMAL BALANCE (20 pts.)

ACCOUNT NAME ELEMENT NORMAL BALANCE

1. Peters, Capital    
2. Peters, Drawing    
3. Notes Receivable    
4. Gas and Oil Expense    
5. Notes Payable    
6. Loans Payable    
7. Interest Income    
8. Service Income    
9. Income Tax Expense    
10. Est. Uncollectible
Acct.    
 COMPLETE THE TABLE USING THE FORMULA REVENUE OR INCOME LESS
EXERCISE III: EXPENSES=PROFIT/(LOSS)/BREAKEVEN. (12 pts.)
NOTE: Loss should be enclosed in parenthesis or with - or else this will be considered as PROFIT.

PROFIT/(LOSS)/
REVENUE OR INCOME EXPENSES BREAKEVEN
₱ 150,000.00 ₱ 25,000.00 ?
-₱
? ₱ 75,000.00 5,000.00
₱ 99,000.00 ? ₱ -
₱ 11,250.00 ₱ 12,250.00 ?
? 9,105.00 ? 25%
₱
205,000.00 ? 105% ?
₱
? ₱ 66,000.00 6,000.00
-₱
₱ 84,300.00 ? 15,000.00

COMPLETE THE TABLE USING THE FORMULA OE, BEG (OR

EXERCISE IV: CAPITAL, BEG.) + ADDITIONAL INVESTMENT + PROFIT -

DRAWING - LOSS = OE, END (OR CAPITAL, END). (8 pts.)

CAPITAL BEGINNING ADD'L INVEST. PROFIT/LOSS DRAWING CAPITAL, END

₱10,000.00 ₱ - ₱10,000.00 ₱1,000.00 ?

? ₱2,000.00 -₱15,000.00 ₱ - ₱33,000.00

₱250,000.00 ₱30,000.00 ₱35,000.00 ? ₱300,000.00

₱1,500,000.00 ₱ - ? ₱45,500.00 ₱1,505,000.00

₱890,000.00 ? ₱20,000.00 ₱10,000.00 ₱900,000.00

? ₱ - ₱95,200.00 ₱ - ₱95,200.00
 ₱4,350.00 ₱55,000.00 -₱6,000.00 ₱2,350.00 ?

₱31,800.00 ₱2,000.00 ? ₱2,000.00 ₱58,050.00

USING THE EXPANDED ACCOUNTING EQUATION,

EXERCISE V: SOLVE FOR THE OWNER'S EQUITY BEG. AND END.
ACCOUNT NAME AMOUNT ELEMENT
Accounts Receivable ₱10,000.00  
Accrued Salaries 25,000.00  
Accounts Payable 200,000.00  
Cash in Bank 75,100.00  
Computer 25,000.00  
Depreciation Expense 8,000.00  
Furniture & Fixture 17,500.00  
Insurance Expense 10,000.00  
Prepaid Rent 12,000.00  
Rent Expense 2,000.00  
Truck 65,000.00  
Salaries Expense 27,500.00  
Service Revenue 350,000.00  
Utilities Expense 30,000.00  

EXERCISE VI: TRANSACTION ANALYSIS

1. Petra purchased office supplies for Cash, P7,500.00.

2. Juan received the Cash from the approved loan, P100,000.00.
3. Candido invested in a business with Delivery Truck worth P150,000.00
and Cash of P200,000.00 as initial investment.
4. Pedro paid his account with Y2L Enterprise, P80,000.00.
5. Constantina withdraw Cash from her business for emergency use,
P10,000.00.