FINANCIAL ACCOUNTING AND REPORTING ASSIGNMENT

Name: ____________________________________________ Section: _____________

Professor: _________________________________________

Problem 1: Transaction Effects on the Basic Accounting Model

During the month of May, Rogelio Ceradoy Review had the following transactions:

Assets Liabilities Owner’s Equity

a. Paid salaries for May, P54, 000 ______ ______ ______

b. Acquired equipment on credit, P90, 000. ______ ______ ______
c. Purchase supplies in cash, P3, 000. ______ ______ ______
d. Additional investment by owner, P120, 000. ______ ______ ______
e. Received payment for services rendered, P18, 000. ______ ______ ______
f. Made partial payment on equipment acquired
on credit, P30, 000. ______ ______ ______
g. Billed customers for services performed, P48, 000. ______ ______ ______
h. Withdrew cash for personal use, P45, 000. ______ ______ ______
i. Received payment from customers already billed, P9, 000. ______ ______ ______
j. Received bills for utilities to be paid next month, P2, 100. ______ ______ ______

Required:

For each transactions, indicate whether the assets, liabilities or owner’s equity increased (+), decreased (-), or did
not change by placing the appropriate sign in the appropriate column.

Problem 2: Effect of Transactions

The following selected transactions were completed by Roberto Orcajada Delivery Service during July 2018:

________1. Cash received from delivery services, P92, 700.

________2. Paid creditors on account, P20, 000.
________3. Received cash from owner as additional investment, P600, 000.
________4. Paid advertising expenses, P5, 000.
________5. Billed customers for delivery services on account, P55, 200.
________6. Purchased supplies for cash, P6, 000.
________7. Paid rent for July, P20, 000.
________8. Received cash from customers on account, P25, 440.
________9. Determined that the cost of supplies on hand was P1, 440.
________10. Owner withdrew cash for personal use, P20, 000.

Indicate the effects of each transaction on the space provided:

a. Increase an asset, decrease another asset

b. Increase an asset, increase a liability
c. Increase an asset, increase owner’s equity
d. Decrease an asset, decrease a liability.
e. Decrease an asset, decrease owner’s equity.

Problem 3: Transaction Analysis

Transactions:

a. Received P260, 000 cash from clients for services rendered.

b. Paid P480, 000 of salaries to employees.
c. Collected P120, 000 from clients on account.
d. The owner, Virginia Ruben, withdrew P80, 000 cash for personal use.
e. Purchased P140, 000 of supplies on account.
f. Billed clients P180, 000 for services rendered.
g. Paid P100, 000 to suppliers on account.

For each of the transactions for Virginia Ruben Antique Restorer, a sole proprietorship, fill in the spaces to answer
the following questions:

1. What are the two accounts affected by the transaction?

2. What type of account is affected – asset, liability, owner’s capital, owner’s withdrawal, income or expense
account?
3. Should the account be increased or decreased?
4. Should the account be debited or credited?
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FINANCIAL ACCOUNTING AND REPORTING ASSIGNMENT

Accounts Type of Increase or Debit or

Transaction
Affected Account Decrease Credit

a. 1.

2.

b. 1.

2.

c. 1.

2.

d. 1.

2.

e. 1.

2.

f. 1.

2.

g. 1.

2.

Problem 4: Identification of Errors

On September 1, 2018, Christopher Abelinde established Abelinde Delivery Servces. During the month, the enity
had the following transactions:

a. Christopher Abelinde invested P240, 000 in the business (increase Cash; increase Abelinde, Capital).
b. Bought two used delivery vans from The Van Lot for P200, 000 and paid P50, 000 as a down payment
(increase Delivery Equipment, P200, 000; decrease Cash, P50, 000; increase Accounts Payable, P150, 000).
c. Received P25, 000 in cash for delivery services (increase Cash; increase Delivery Revenues).
d. Received bill from Bicol News for advertising, P3, 500 (increase Advertising Expense; decrease Cash).
e. Billed Naga Surgical Supply for delivery services provided, P6, 200 (increase Accounts Receivable; increase
Delivery Revenues).
f. Received and paid telephone bill, P1, 000 (decrease Cash; decrease Telephone expense).
g. Abelinde invested in his business office equipment having a fair market value of P9, 600 (increase Office
Equipment; decrease Cash).
h. Received and paid bill for gas and oil, P1, 500 (decrease Cash; increase Maintenance Expense).
i. Paid P3, 500 to Bicol News to pay account in full (increase Advertising expense; increase Cash).
j. Received P29, 000 cash for delivery services performed (increase Cash; increase Delivery Revenues).
k. Abelinde withdrew P11, 000 for personal use (decrease Cash; increase Salaries Expense)
l. Received P4, 000 from Naga Surgical Supply to apply on account (increase Cash; increase Delivery
Revenues).
m. Paid salaries to part-time employee, P8, 000 (increase Salaries Expense; decrease Cash).

Required:
Find six errors that were made in recording the transactions, and state how they should have been recorded.
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Problem 5: Recording of Transactions in T-Accounts

The accounts and transactions of Evelyn Tria, Systems Consultant, are shown below:
a. Invested P150, 000 in cash to start the business.
b. Paid P7, 500 for one month’s rent.
c. Bought office furniture for P26, 000 in cash.
d. Performed services for P10, 500 in cash.
e. Performed services for P12, 750 on credit.
f. Bought desktop computer for P55, 000; paid 50% down, balance in 30 days.
g. Acquired a personal copier for P39, 500 on credit; paid P9, 500 cash, balance due in 30 days.
h. Received P7, 000 from credit clients.
i. Bought additional office chairs for P8, 000 on credit.
j. Issued a check for P32, 500 to pay for salaries.
k. Performed services for P10, 250 in cash.
l. Performed services for P11, 500 on credit.
m. Collected P6, 000 on accounts receivable.
n. Issued check for P4, 000 in partial payment of the amount owed for office chairs.
o. Paid P2, 250 for the monthly telephone bill.
p. Paid P2, 500 for the monthly electric bill.
q. Tria withdrew P10, 000 in cash for personal expenses.

Required:

1. With the aid of T-accounts, record the transactions listed above. Use the following accounts; Cash; Accounts
Receivable; Office Furniture; Office Equipment; Accounts Payable; Tria, Capital; Tria, Withdrawals; Consulting
Revenues; Salaries Expense; Rent Expense; Utilities Expense and Miscellaneous Expense.

2. Determine the balances of the T-accounts.

-END OF ASSIGNMENT-

Instructions and reminders: You can write your answers on this questionnaire but you can also use
another sheet of paper, if necessary. This assignment is given to enhance your problem solving skills.
Copying your classmates’ answers is highly discouraged. Enjoy! God Bless you! 

“Give instruction to the wise, and they will become wiser still; teach the righteous and they will gain in learning. The fear of the
Lord is the beginning of wisdom, and the knowledge of the Holy One is insight. For by me your days will be multiplied, and
years will be added to your life.”

-Proverbs 9:9-11

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