NATIONAL UNIVERSITY

Manila, Philippines
College of Business & Accountancy
Department of Accountancy
SY 2021 -2022
BAINTE1X: Integrated Accounting

Fundamentals ACTIVITY 3: ANALYZING

TRANSACTIONS

1. Using the accounting equation, compute the missing amounts for each of the following
companies, stated in billions of dollars reported in their 2016 financial reports:

Company Assets = Liabilities + Equity

Coca-cola $87.27 $64.05 $23.22
PepsiCo. $74.13 $62.93 $11.20
Dr. Pepper $9.79 $7.66 $2.13
Carlsberg $18.86 57.74% $18.28

Which company has the highest net worth? Coca-cola

2. Refer to Problem 1. Which is most solvent? Carlsberg (Formula: Equity/Assets x 100

=96.92%)

3. Refer to Problem 1. Compare the data found in the 2015 financial reports with the data
given in Problem 1. Whose solvency improved the most just over a period of one year?

Company Assets = Liabilities + Equity

Coca-cola $90.09 $64.33 $25.76
PepsiCo. $69.67 $57.74 $11.93
Dr. Pepper $8.70 $6.69 $2.01
Carlsberg $18.89 61.2% $18.28

4. Jackson is the owner of a business consulting business. At the end of its accounting period
December 31, 2016, Go and Change has assets of P1,325,000 and liabilities of P1,142,000.
Using the accounting equation, determine Jackson Capital, as of December 31, 2016.
P183,000
How much is Jackson, Capital as of December 31, 2017, assuming that assets increased by
P84,000 and liabilities increased by P37,000 during 2017?
P230,000
 5. Complete the statement of financial position of Mr. Blu and prepare the capital statement. He
started the Wash Ur Car business with a cash capital of P150,000.

Assets Liabilities and Owner’s Equity

Cash P60,000 Accounts Payable P170,000
Accounts Receivable 10,000 Notes Payable 250,000
Car 120,000 Blu, Capital 150,000
Equipment 380,000 Total Liabilities &Owner’s
Total Assets P570,000 Equity P570,000

Determine the missing figures based on the following information and give the total assets, total
liabilities and owner’s equity two months after Blu started the business.
a. Financial records show that the business has a P10,000 receivable from customers.
b. The car costs a friend P360,000 but Blu got if from him for only 1/3 of its cost.
c. Mr. Blu signed a note payable to the bank for P500,000 which he used to by the car and
equipment.
d. Only half of the note in C outstanding
e. Blu Capital should represent the missing amount required to show a balanced structure of the
assets against the liabilities and owner’s equity.

6. Refer to Problem 5. There is some missing information. Compare the initial amount invested
and the ending capital balance.
a. How much was the change in the capital of Blu? What caused the change in Capital? P10,000
increase change
b. Assume the business has not started operation yet, what would the change mean? Increase in
investment
c. Ignore b. Assume the business has already started operation and there are no additional
investments nor personal drawings made, what would the change mean? Bank Loan

7. The following items were found in the statement of financial position on Mane’s Sports Club:
Cash P120,000 Accounts Receivable P280,000
Bank Loan Payable 400,000 Accounts Payable 360,000
Supplies 10,000 Car 890,000
Equipment 500,000 Office Furniture 150,000

a) Group the items into assets and liabilities

ASSETS LIABILITIES
Cash Bank Loan Payable
Supplies Accounts Payable
Equipment
Office Furniture
Car
Accounts Receivable
b. Determine the club’s net worth by means of an accounting equation
(A) = 1,950,000 = (L) 760,000 + (E) 1,190,000
8. Using Problem 7, explain what will happen to the accounting equation if additional equipment
were purchased on account for P50,000?
Equipment = P550,000
Accounts Payable = P410,000
Assets = P2,000,000
Liabilities = P810,000
Equity = P1,190,000

9. Refer to Problem 7 and ignore Problem 8, explain what will happen to the accounting equation
if the first out of ten installments of the bank loan was paid in cash?
Bank Loan Payable = P360,000
Cash = P80,000
Assets = P1,910,000
Liabilities = P770,000
Equity = P1,140,000

10. Refer to Problem 7 and ignore Problem 8 and 9, explain what will happen to the accounting
equation if the owner made a cash withdrawal of P50,000.

11. A list of transactions appears below. Indicate which accounting elements of the business are
affected by placing in the respective columns the amount and the + (increase) or – (decrease)
sign if NA, if the element is not affected. April is the owner-manager of April Pizza. Unless
otherwise stated, the transactions are all for the business.

Owner’s
Transactions Assets Liabilities
Equity
a) April received a retirement pay of + NA +
P1,000,000 cash and invested half of this
to put up his business
b) From the remaining pension of NA NA NA
P500,000, she got a car for her own use,
P750,000 and issued a note for the
balance
c) She hired a cook, a cashier and a NA NA NA
server for a monthly salary of P10,000
each worker
d) She bought cooking equipment and +- NA NA
paid P350,000
e) She bought office equipment from + + NA
Best Shop for P120,000 on credit
f) She bought office equipment from + + NA
Best Shop for P120,000 on credit
g) She took P5,000 cash and bought -+ NA NA
supplies

12. The following table shows the effect of five transactions (a through e) on the assets,
liabilities, and equity of Vera’s Boutique. Fill out the table for the missing items (?) and describe
the transactions that took place.

Furniture
Office Office Accounts Notes Vera,
Cash &
Supplies Equipment Payable Payable Capital
Fixtures
A P105,000 P+15,000 +95,000 P+215,0
00
B -25,000 +50,000 P-25,000
C -1,500 +1,500
D -750 -750
E -15,000 -15,000
F +100,000 +100,000
P163,500 P750 P65,000 P95,000 P10,000 P100,000 P214,250

Extract the total and prove the relationship of the accounting elements.
TRANSACTION DESCRIPTION
A Invested P105,000 cash, P15,000 equipment, and P95,000
Furniture & Fixtures
B Purchased office equipment one half in cash, other one half
on account
C Purchased office supplies in cash
D Recorded used office supplies
E Paid partial payment on transaction B
F Applied for Bank Loan
 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
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

ASSETS LIABILITIE EQUIT

S Y
Date Cash Supplie Rent Furniture Equipmen Leasehold Notes De Dios,
s Deposit & t Improvemen Payable Capital
Fixtures t
Marc P350,000 P350,000
h 01
05
10 (10,000) P10,00
0
15 (68,000) P8,000 P45,000 P15,000
20 (1,500) P1,500
25 (150,000 300,000 P150,000
)
P120,500 P1,500 P10,00 P8,000 P345,000 P15,000 P150,000 P350,000
0
 Playnet.com
Statement of Financial Position
March 25

Assets Liabilities & Owner’s Equity

Cash P120,000 Notes Payable P150,000

Rent Deposit 10,000 De Dios, Capital 350,000
Supplies 1,500
Furniture 8,000
Equipment 345,000 P500,000
Leasehold Improvement 15,000

P500,000

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?
P150,000 – business entity
b. What amount did you use in recording the fax machine? What concept supports this?
Exchange price/ cost principle
c. Prepare a statement of financial position based on the final balances.
 ASSETS LIABILITIES EQUIT
Y

Date Cash Art Office Equipment Furniture& Accounts Notes Kalaw,

Supplies Supplies Fixtures Payable Payable Capital

Feb 5 P150,000 P150,000

9 (15,000) P15,000

16 (35,000) P105,000 P35,000

20 6,000 6,000

22 (1,500) P1,500

25 P8,000 8,000

28 (35,000) (35,000) (P35,000)

P63,500 P15,000 P1,500 P111,000 P8,000 P14,000 P35,000 P150,000

Straight and True Advertising

Statement of Financial Position
February 28

Assets Liabilities & Owner’s Equity

Cash P63,500 Accounts Payable P14,000
Art Supplies 15,000 Notes Payable 35,000
Office Supplies 1,500 Kalaw, Capital 150,000
Equipment 111,000
Furniture & Fixtures 8,000
P199,000

P199,000
 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?
Business entity concept
c) Prepare a statement of financial position as at June 30, using the final balances.
ASSETS LIABILITIES EQUITY

Date Cash Supplies Land Building Equipment Furniture& Accounts Loans Valdez,
Fixtures Payable Payable Capital

June P1,500,00 P250,000 P1,750,000

04 0
07
08 (915,000) P15,000 P900,000
10 P80,000 P80,000
12
14 (2,000) (2,000)
15 2,500,000 P2,500,000
17 (40,000) (40,000)
30 (500,000) P2,400,000 1,900,00
0
P2,545,00 P13,000 P250,000 P2,400,000 P900,000 P80,000 P140,000 P2,500,000 P1,748,000
0
6,188,000
Jo’s Health Spa
Statement of Financial Position
June 30

Assets Liabilities & Owner’s Equity

Cash P2,545,000 Accounts Payable P40,000
Supplies 13,000 Loans Payable 4,400,000
Land 500,000 Valdez, Capital 1,998,000
Building 2,400,000
Equipment 900,000
Furniture and Fixtures 80,000 P6,188,000

P6,188,000

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
 Prepare a statement of financial position as at April 30, 2015 using the final balances.

ASSETS LIABILITIES OWNER’S

EQUITY
Date Cash Furniture& Supplie Equipmen Car Account Notes Narvaez, Narvaez.
Fixtures s t s Payable Capital Drawing
Payable
Apri P300,000 P300,00
l 0
1
2 (50,000) P100,000 P50,000

10 300,000 300,000

15 (100,000 P100,000
)
20 (25,000) P25,000

23 (75,000) P150,00 P75,000

0
25 (500) 500

30 (10,000) (10,000)

P40,000 P100,000 P24,500 P400,000 P150,00 P75,000 P40,000 P599,50 P0

0 0

Cavite Day Care Center for Kids

Statement of Financial Position
April 30, 2015

Assets Liabilities&Owner’s Equity

Cash P40,000 Accounts Payable P75,000
Furniture&Fixtures 100,000 Notes Payable 40,000
Supplies 24,500 Narvaez, Capital 599,500
Equipment 400,000 Narvaez, Drawing 0
Car 150,000

P714,500
P714,500
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.
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.
Understandability
c. A firm spent P400,000 for cooking wares which was recorded as cooking expense.
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.
Timeliness
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
Understandability
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.
Comparability
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.
Verifiability
h. The company borrowed P500,000 and reported this not as liability but as revenue.
Materiality