CITY COLLEGE OF CALAMBA

DEPARTMENT OF BUSINESS EDUCATION

BS ACCOUNTANCY
 
BRIDGE PROGRAM FOR NON ABM STUDENTS
 Accounting Definition
 
It is a service activity. Its function is to provide quantitative information, primarily financial in nature,
about economic entities that is intended to be useful in making economic decisions.

It is a process of identifying, measuring and communicating economic information to permit informed

judgment and decision by users of the information
Assets are economic resources controlled by the enterprise resulting from past events and
from which probable future economic benefits are expected to flow to the enterprise.
 
Liabilities are present obligations resulting from past events and whose settlement will cause
an outflow of the enterprise resources.
 
Owner’s Equity represents the claim of the owner over the assets of the business after the
liabilities have been deducted.
 
Statement of Financial Position (Balance Sheet) is a summary of an entity’s assets, liabilities
and equity and their relationships to each other at a moment in time
 
Business Entity concept assumes that a business enterprise is separate and distinct from the
owner or investor.
Problem 1 Copyclear and Bindery Center situated started its operations in January of the current year. On January 1, the owner Susan Alegre, invested
cash P20,000 and equipment worth P48,000. The following are the additional transactions for January.
January 5 Bought furniture and fixtures worth P6,000 on account
7 Bought a photocopier machine for P20,000. Terms: 50% down, balance on account.
8 Hired another helper on a commission basis of 10% of sales, to operate the machine just recently purchased.
15 Bought supplies costing P3,000 and paid cash.
20 The first account is due. Ms. Alegre paid this from her personal cash.
30 The second account is due. Issued a 60 day promissory note.
Required: Analyze the foregoing transactions in the table below and prepare statement of financial position.

Date Cash Supplies Furniture Equipment Accounts Payable Note Alegre

Payable Capital

January 1              
5              
7              
8              
15              
20              
30              
Total              
 Copyclear and Bindery Center
Statement of Financial Position
January 30, 2020
 
Assets
 
Current Assets:
Cash P
Supplies P
Non Current Assets:
Furniture P
Equipment
Total Assets P
 
Liabilities and Owner’s Equity
Current Liaibilities:
Notes Payable P
Accounts Payable
Total Liabilities P
Owner’s Equity:
Alegre Capital
Total Liabilities and Owner’s Equity P
Problem 2 Listed below are several transactions for Jo’s Health Spa for June of the current year.
 
June 4 Jo Valdez invested P1,500,000 cash and a vacant lot worth P300,000 in the business.
9 Purchased 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
Seven days. Only P80,000 was placed in the clinic, the remaining amount was placed in his
Newly built house.
11 Applied for a P2,500,000 business loan from a bank by mortgaging his farm. He plans to use
This to construct a clinic.
15 The loan was approved and the money was deposited in the name of the business.
20 Paid one half of the account due on the furniture and fixtures.
30 A two storey clinic was constructed on the vacant lot. The construction cost was P1,500,000
Was paid out of the bank loan.
Required: Analyze the foregoing transactions in the table below and prepare statement of financial position.

Date Cash Supplies Land Building Equipment Furniture Accounts Loans Valdez
& Fixtures Payable Payable Capital
                   
                   
                   
                   
                   
                   
                   
                   
Revenue represents the inflow of cash or other assets from clients and customers for service rendered
or for goods delivered. IAS defines it as increase in economic benefits during the period that results in
increase in equity, other than those resulting from the contributions of equity participants (investors).
 
Expenses are the consumption of asset or using up of service to generate revenue. IAS defines it as a
decrease in economic benefit during the accounting period in the form of outflow or depletion of
asset or increase in liabilities that results in a decrease in equity, other than those relating to
distributions to equity participants (in form of personal drawings made by the owner).
 
Statement of Income shows the results of operations within a certain period. It summarizes the
revenues and expenses of the business with in period of time.
 
Problem 3 On April 1 of the current year, Bert Advincula formed the Baguio Driving Institute. The following transactions took place:
 April 1 The owner invest cash of P250,000.
4 Second hand cars worth P240,000 were purchased paying P120,000 down payment and the
Balance payable after a month.
5 Gas and oil paid P2,000.
10 Clients were billed and cash collected from driving lessons, P24,000.
15 Salaries of P3,500 were paid.
20 Fees of P17,000 were billed to various customers
25 The owner made a cash withdrawal for personal use P5,000.
26 Utility bills were paid in the amount of P4,000.
30 Paid rent for P3,000.
 Required: Analyze the above transactions using the table below. Use the following titles to explain the changes in capital account: Driving Fees Revenue, Gas and Oil Expense,
Rent Expense, Salaries Expense, Utilities Expense and Advincula Drawing and Prepare statement of income, statement of Owner’s equity and statement of financial position.

Date Cash Accounts Cars Accounts Advincula Explanation

Receivable Payable Capital

April 1            
4            
5            
10            
15            
20            
25            
26            
30            
Total            
 Baguio Driving Institute
Income Statement
For the month ended, April 30, 2020
 
Revenue:
Driving Fees Revenue P
Less: Expenses
Utilities Expense P
Salaries Expense
Rent Expense
Gas and Oil Expense
Net income P
 
 Baguio Driving Institute
Statement of Owner’s Equity
For the month ended, April 30, 2020
 
Advincula Capital, April 1, 2020 P
Add: Net Income
P
Less: Drawings
Advincula Capital, April 30, 2020 P
 
 
Baguio Driving Institute
Statement of Financial Position
April 30, 2020
Assets
 
Current Assets:
Cash P
Accounts Receivable P
Non Current Assets:
Furniture
Total Asset P
 
Liabilities and Owner’s Equity
Current Liaibilities:
Accounts Payable P

Owner’s Equity:
Advincula Capital
Total Liabilities and Owner’s Equity P
 
Problem 4 Zuniga started her own business. She completed the following transactions for June of the current year.
 
June 1 Deposited P90,000 in the bank and contributed a system library value at P40,000 to start the
business.
4 Paid the office rent for the month P3,600.
7 Acquired computer equipment for cash P70,000.
9 Purchased computer supplies on credit P15,000.
13 Received P50,000 cash from client for programming done
15 Billed a client on completion of a programming project, P75,000.
15 Paid salaries P20,000.
18 Received 50% payment from client billed on June 15.
20 Withdrew P10,000 for personal expense
25 Made a partial payment for P5,000 for supplies purchased on June 9.
30 Paid electricity and water P15,000
30 Supplies used P5,000
Analyze the above transactions using the table below. (a) Use the following titles to explain the changes in capital account: Professional Fees, Rent Expense, Salaries Expense, Utilities
Expense, Supplies Expense and Zuniga Drawing. (b) Prepare statement of income, statement of Owner’s equity and statement of financial position.
Date Cash Accounts Computer Computer System Accounts Zuniga Explanation
Receivable Supplies Equipment Library Payable Capital
June1                
4                
7                
9                
13                
15                
15                
18                
20                
25                
30                
30                
Total                
 ACCOUNTING EQUATION
 
Assets = Liabilities + Capital
 
Assets = Liabilities + Capital + Revenues – Expenses – Drawing
 
Assets + Expenses + Drawing = Liabilities + Capital + Revenues
 
DEBIT CREDIT
Left side of the equation Right side of the equation

Assets/Expenses/Drawing Liabilities/Capital/Revenue

+ - - +
Increase Decrease Decrease Increase
Problem 5 Indicate the normal balance of the following accounts
 
1. Cash ______________
2. Accounts Payable ______________
3. Rent Expense ______________
4. Ace Capital ______________
5. Ace Drawing ______________
6. Mortgage Payable ______________
7. Sales ______________
8. Service Income ______________
9. Salaries Expense ______________
10. Equipment ______________
11. Accounts Receivable ______________
12. Utilities Expense ______________
13. Land ______________
14. Interest Revenue ______________
15. Prepaid Insurance ______________
 
 
 
Problem 6 Indicate if the following accounts are to be debited or credited
 
1. Cash increased ______________
2. Accounts Payable decreased ______________
3. Rent Expense increased ______________
4. Ace Capital increased ______________
5. Ace Drawing increased ______________
6. Mortgage Payable increased ______________
7. Sales increased ______________
8. Service Income increased ______________
9. Salaries Expense increased ______________
10. Equipment increased ______________
11. Accounts Receivable decreased ______________
12. Utilities Expense increased ______________
13. Land increased ______________
14. Interest Revenue increased ______________
Problem 7 On April 1 of the current year, Bert Advincula formed the Baguio Driving Institute. The following transactions took place:
 April 1 The owner invest cash of P250,000.
4 Second hand cars worth P240,000 were purchased paying P120,000 down payment and the
Balance payable after a month.
5 Gas and oil paid P2,000.
10 Clients were billed and cash collected from driving lessons, P24,000.
15 Salaries of P3,500 were paid.
20 Fees of P17,000 were billed to various customers
25 The owner made a cash withdrawal for personal use P5,000.
26 Utility bills were paid in the amount of P4,000.
30 Paid rent for P3,000.
Using the data of problem 3 (a) indicate what accounts should be debited or credited and its corresponding amounts in the column provided below and record in the general
journal .
Date Debit Credit

April 1

10

15

20

25

26

30
 General Journal page 1

Date Accounts and Explanation PR Debit Credit

         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
Thank you very much!!!!
 
God bless you!!!!!