Fundamentals of Accountancy, Business and Management

The Accounting Equation and the Double Entry System

EXERCISES AND PROBLEMS

I. From the items listed below, prepare a statement of financial position for JVC Trucking Services, owned and
managed by Jose Castillo.

Office furniture and fixtures 180,000

Cash 56,500
Delivery equipment 145,200
Unpaid personal expenses 2,000
Personal savings account of Jose Castillo 15,000
Residential house and lot 1,000,000
Accounts receivable from trade 112,200
Unpaid office payroll at the end of the month 17,000
Accounts payable 150,000
Promissory note payable to the bank, issued
by JVC Trucking Services 100,000

II. On May 30, 2022, the records of Julio Body Building and Gym showed the following data:

Gym equipment 94,600 Notes payable 50,000

Furniture and fixtures 42,000 Supplies 4,600
Accounts payable 35,000 Accounts receivable 27,300
Cash 18,400 Sauna equipment 28,000
Tax payable 1,400 Julio, Capital 128,500

Required: Prepare a statement of financial position as of May 30, 2022.

III. On December 1, 2022, Lou has the following accounts in her hair salon business:

Cash P38,000
Land 250,000
Building 750,000
Furniture and fixtures 28,500
Supplies 8,600
Equipment 46,200
Accounts payable 150,000
Mortgage payable 600,000

a. How much was the net worth of the business on December 1?

b. Prepare a statement of financial position as of December 1.
c. If equity is P410,000 on December 31, how much was the profit during the month?

IV. EJR Steam Laundry is owned and operated by Elize Rodriguez. On June 30, 2022, the following account balances
are available from the records:

Cash 41,460
Accounts receivable 80,125
Laundry supplies 6,820
Office supplies 2,600
Office equipment 29,400
Laundry equipment 168,800
Delivery equipment 94,600
Accounts payable 69,200
Notes payable 50,000
Interest payable 6,000
Rodriguez, capital 298,605
Laundry revenue 88,640
Rent expense 5,000
Salaries and wages 26,520
Light and water expense 6,300
Repairs and maintenance 2,200
 Gas and oil 8,620
Taxes and licenses 2,900
Advertising expense 5,600
Miscellaneous expenses 3,670

Required:
1. Prepare a statement of profit or loss for the month of June 2022.
2. Prepare a statement of financial position as of June 30, 2022.

V. Rachel Bernabe opened a hair salon called RB Salon. The following are the transactions for the month:

1. Invested cash of P50,000 into the business.

2. Paid for rent for the month, P5,000.
3. Purchased furniture and fixtures worth P26,000 on account from Atlas Furniture.
4. Purchased beauty supplies P14,400 in cash.
5. Received cash P6,200 for services rendered.
6. Billed a customer, P9,000 for services for a wedding preparation.
7. The customer paid P4,500 to apply on account.
8. Paid P2,000 to Atlas Furniture to apply on account.
9. Rachel Bernabe invested additional cash of P10,000 into the business.
10. Purchased beauty equipment worth P18,000 in cash from Hortaleza, Inc.

Required: Enter the above transactions in the T-accounts given below:

CASH ACCOUNTS RECEIVABLE

BEAUTY SUPPLIES FURNITURE & FIXTURES

EQUIPMENT ACCOUNTS PAYABLE

RACHEL BERNABE, CAPITAL SERVICE INCOME

RENT EXPENSE
VI. On November 1, 2021, Nancy Andal withdrew P250,000 from her personal savings account and deposited the cash
in the account of her newly opened company, Nancy Laundromat. During the first month, the following transactions
occurred:

Nov. 1 Paid monthly rent, P15,000.

2 Acquired laundry supplies on account, P45,000.
5 Acquired a service vehicle for P600,000 by issuing a note payable in that amount, which will be
payable in 12 equal installments.
6 Received P50,000 cash for laundry services for the nearby hospital.
9 Paid half of the laundry supplies bought on November 1.
13 Billed various customers for laundry services rendered, P24,500.
14 Paid light, water and telephone bills, P8,500.
15 Paid salaries, P18,000.
20 Received P18,000 from customers billed on November 13.
25 Ms. Andal withdrew P20,000 for personal use.
30 Paid the first installment on the note issued plus the corresponding P5,000 interest to date.
30 After a physical inventory, it was determined that only P8,000 of the laundry supplies are still unused.

Required:
1. Open the following T-accounts and record the transactions listed above:
Cash N. Andal, capital
Accounts receivable N. Andal, drawing
Laundry supplies Laundry revenue
Service vehicle Rent expense
Accounts payable Salaries expense
Notes payable Laundry supplies expense
Utilities expense

2. Prove the equality of your debit and credit entries by preparing a trial balance at the end of the month.

VII. Maria Cristina opened the MC Computer Services, Co. The company provides computer usage and internet
services. The transactions for the first month are the following:

June 1 Invested cash of P1,000,000 and a small piece of land and an old building worth P1,000,000 into the
business. The land is valued at P800,000. The land & building is mortgaged with PNB for P200,000.
2 Acquired various computed equipment on account, P500,000.
3 Remodeled the old building, paying P100,000 in cash while the other half is payable in 15 days.
4 Purchased furniture and fixtures paying cash of P85,000.
5 Bought computer supplies for P67,000 cash.
6 Paid P12,500 for advertising.
10 Received cash from customers for services rendered, P23,000.
16 Sent bills to various clients for services rendered, P31,800.
17 Paid salaries, P24,000.
18 Paid the liability on the remodeling of the building.
29 Paid various utilities expense, P22,600.
30 Maria Cristina withdrew cash for personal use, P10,000.
Required:
1. Open the following T-accounts and record the transactions listed above:
Cash Maria Cristina, capital
Accounts receivable Maria Cristina, drawing
Computer supplies Service income
Furniture and fixtures Salaries expense
Computer equipment Advertising expense
Land Utilities expense
Building
Accounts payable
Mortgage payable

2. Prove the equality of your debit and credit entries by preparing a trial balance at the end of the month.

***end***