problems-1-to-8
5
MGT111: Principle of Accounting M.A. Perez Problem 1 ((Weygandt, et al page 36) Answer the following questions. 1. The total assets of Black Services are P95,000 and its owner’s equity is P40,000. What is the amount of total liabilities? 2. The total assets of Norris and Associates are P300,000 and its liabilities are equal to one half of its total assets. What is the amount of Norris and Associates owner’s equity? 3. At the beginning of the year, Black Services had total assets of P435,000 and total liabilities of P250,000. Answer the following questions. a. If total assets increased P75,000 during the year and total liabilities decreased P40,000, what is the amount of owner’s equity at the end of the year? b. During the year, total liabilities increased P50,000 and the owner’s equity decreased P35,000. What is the amount of total assets at the end of the year? c. If total assets decreased P40,000 and owner’s equity increased P60,000 during the year, what is the amount of total liabilities at the end of the year? Problem 2 ((Weygandt, et al page 37) Gem Computers entered into the following transactions during May 2010. 1. Purchased computer terminals for P23,650 from Digital Equipment on account. 2. Paid P4,400 cash for May rent on storage space. 3. Received P16,500 cash from customers for contracts billed in April. 4. Provided computer services to Fisher Construction Ltd for P3,300 cash. 5. Paid Northern States Power Ltd P12,100 cash for energy usage in May. 6. Peter rolling invested an additional P35,200 in the business. 7. Paid Digital Equipment for the terminals purchased in (1) above. 8. Incurred advertising expense for May of P1,320 on account. Instructions: Indicate with the appropriate letter whether each of the transactions above results in: a) an increase in assets and decrease in assets. e) a decrease in assets and a decrease in liabilities b) an increase in assets and an increase in owner’s equity f) an increase in liabilities and decrease in owner’s equity c) an increase in assets and an increase in liabilities. g) an increase in owner’s equity and decrease in liabilities d) a decrease in assets and a decrease in owner’s equity Problems 3 (Weygandt, et al page 40) Marie Trigger opened a doctor’s practice, Marie Trigger, Medical Practitioner, on 1 July 2010. On 31 July, the statement of financial position showed Cash P4,000, Accounts Receivable P1,500, Supplies P500, Office Equipment P5,000, Accounts Payable P4,200, and MarieTrigger, Capital P6,800. During August the following transactions occurred. 1. Collected P1,400 of accounts receivable. 2. Paid P2,700 cash on accounts payable 3. Earned revenue of P7,500 of which P3,000 is collected in cash and the balance is due in September. 4. Purchased additional office equipment for P1,000 paying P400 in cash and the balance on account. 5. Paid salaries P3,000, rent for August P900 and advertising expenses P350. 6. Withdrew P550 in cash for personal use.
Transcript of problems-1-to-8
MGT111: Principle of AccountingM.A. Perez
Problem 1 ((Weygandt, et al page 36)
Answer the following questions.
1. The total assets of Black Services are P95,000 and its owners equity is P40,000. What is the amount of total liabilities?2. The total assets of Norris and Associates are P300,000 and its liabilities are equal to one half of its total assets. What is the amount of Norris and Associates owners equity?3. At the beginning of the year, Black Services had total assets of P435,000 and total liabilities of P250,000. Answer the following questions.a. If total assets increased P75,000 during the year and total liabilities decreased P40,000, what is the amount of owners equity at the end of the year?b. During the year, total liabilities increased P50,000 and the owners equity decreased P35,000. What is the amount of total assets at the end of the year?c. If total assets decreased P40,000 and owners equity increased P60,000 during the year, what is the amount of total liabilities at the end of the year?
Problem 2 ((Weygandt, et al page 37)
Gem Computers entered into the following transactions during May 2010.
1. Purchased computer terminals for P23,650 from Digital Equipment on account.2. Paid P4,400 cash for May rent on storage space.3. Received P16,500 cash from customers for contracts billed in April.4. Provided computer services to Fisher Construction Ltd for P3,300 cash.5. Paid Northern States Power Ltd P12,100 cash for energy usage in May.6. Peter rolling invested an additional P35,200 in the business.7. Paid Digital Equipment for the terminals purchased in (1) above.8. Incurred advertising expense for May of P1,320 on account.
Instructions:Indicate with the appropriate letter whether each of the transactions above results in:a) an increase in assets and decrease in assets.e) a decrease in assets and a decrease in liabilitiesb) an increase in assets and an increase in owners equityf) an increase in liabilities and decrease in owners equityc) an increase in assets and an increase in liabilities.g) an increase in owners equity and decrease in liabilitiesd) a decrease in assets and a decrease in owners equity
Problems 3 (Weygandt, et al page 40)
Marie Trigger opened a doctors practice, Marie Trigger, Medical Practitioner, on 1 July 2010. On 31 July, the statement of financial position showed Cash P4,000, Accounts Receivable P1,500, Supplies P500, Office Equipment P5,000, Accounts Payable P4,200, and MarieTrigger, Capital P6,800. During August the following transactions occurred. 1. Collected P1,400 of accounts receivable.2. Paid P2,700 cash on accounts payable3. Earned revenue of P7,500 of which P3,000 is collected in cash and the balance is due in September.4. Purchased additional office equipment for P1,000 paying P400 in cash and the balance on account.5. Paid salaries P3,000, rent for August P900 and advertising expenses P350.6. Withdrew P550 in cash for personal use.7. Received P2,000 from Standard Federal Bank money barrowed on a note payable.8. Incurred utility expense for month on account P250.
Instructions: a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column headings should be as follows: Cash + Accounts Receivable + Supplies + Office Equipment = Notes Payable + Accounts Payable + Marie Trigger, Capital. b) Identify each number according to what type of owners equity transactions by writing: EI for owners equity investment, D for owners drawings, R for revenue, E for expense and NE for not affecting owners equity.
Problem 4
Identify each of the following accounts as required: (1 point each row; 1 mistake = .5; more than 1 = 0 point)
Account TitlesType of Accounts (A,L,Oe,R,E)Normal Balance(Dr or Cr)Real (R) or Nominal (N)Balance Sheet (BS), Income Statement (IS) or Statement of Owners Equity (SOE)If asset or liability accounts, current (C) or noncurrent (NC) other than that (N/A)
1. Accounts PayableLCrRBSC
2. Freight-out (Delivery Expense)EDrNISN/A
3. Accounts Receivable
4. Celine Hernandez, Capital
5. Celine Hernandez, Personal
6. Mortgage Payable
7. Equipment
8. Rent Expense
9. Supplies
10. Supplies Expense
11. Prepaid Expense
12. Service Revenue
13. Professional fee earned
14. Unearned Professional fee
15. Merchandise Inventory
16. Taxes and licenses
17. Notes Receivable short term
18. Furniture and Fixtures
19. Accumulated Depreciation
20. Allowance for bad debts
21. Commission Income
22. Sales
23. Utilities expense
24. Bonds Payable
25. Miscellaneous Expense
26. Representation Expense
27. Gas and Oil
Problem 5 (Weygandt, et al page 77)
Transactions for the Kevin Trinh Welding for the month of June are presented below.
June1Kevin Trinh invests P4,400 cash in a small welding business of which he is the sole proprietor.2Purchase equipment on account for P990.3P880 cash is paid to the landlord for June rent.12Bills J. Leung P330 for welding work done on account.Instructions:a) Prepare the debit-credit analysis for each transaction.b) Journalize the transactions for June.
Problem 6 (Weygant, et al page 78)
J. Truong has the following transactions during August of the current year.
Aug1Opens an office as a financial advisor, investing P10,000 in cash.4Pays insurance in advance for 6 months, P3,600 cash.16Receives P1,600 from clients for services provided.27Pays secretary P2,000 salary.Instructions:a) Prepare the debit-credit analysis for each transaction.b) Journalize the transactions for Aug.
Problem 7 (Weygandt, et al page 83)
Fairway Miniature Golf and Driving Range was opened on 1 March by William Tran. The following selected events and transactions occurred during March.
Mar.1Invested P60,000 cash in the business.3Purchased Lee Golf Land for P38,000 cash. The price consists of land P23,000, building P9,000, and equipment P6,000. (Makeone compound entry),5Advertised the opening of the driving range and miniature golf course, paying advertising expense of P1,6006Paid cash P1,480 for 1-year insurance policy.10Purchased golf clubs and other equipment for P2,600 from Golf Accessories Ltd payable in 30 days.18Received P800 in cash for golf fees earned.25Withdrew P1,000 cash for personal use.30Paid salaries of P60030Paid Golf Accessories in full.31Received P500 cash for fees earned.
William Tran uses the following accounts: Cash; Prepaid Insurance; Land; Buildings; Equipment; Accounts Payable; William Tran, Capital; William Tran, Drawings; Golf Revenue; Advertising Expense; and Salaries Expense.
Instructions:a) Journalize the March transactions in a 2 column journal.
Problem 8 (Weygandt, et al page 78)
An inexperienced bookkeeper prepared the following trial balance. Prepare a correct trial balance.
ZHANG CONSULTINGTrial Balanceas at 31 December 2010
DebitCreditAccounts Payable P3 000CashP16 800P. Zhang, Capital13 000P. Zhang, Drawings4,500Prepaid Insurance3,500Rent Expense2,400Salaries Expense18 600Service Revenue25 600Unearned Revenue4,200P39,600P52,000
Problem 9
Highland TruckingTrial BalanceJuly 31, 2012
CashP24,612
Accounts Receivables12,600
Office supplies5,000
Office Equipment45,800
Trucks978,600
Accounts Payable78,600
Notes Payable240,000
Unearned Trucking Fees28,600
Juan Dela Cruz, Capital610,000
Juan Dela Cruz, Drawing20,000
Trucking Fees Earned210,500
Salaries Expense24,800
Gas & Oil18,770
Insurance Expense16,488
Rent Expense12,000
Utilities Expense9,030
1,167,7001,167,700
Other data:a) The office equipment was purchased on July1, 2012. It will have a 3,800 salvage value at the end of its seven-year life.
b) Two trucks were purchased on July1, 2012. Each truck is expected to have a salvage of 39,300 at the end of its eight-year life.
c) The Unearned Trucking Fees were received on July1 for four trucking trips. As of July31, three trips have already been made.
d) Truck drivers are paid a total of 400 per day. At July31, three days salaries are unpaid.
e) The insurance policy has a two-year beginning July1, 2012.
f) The balance in the Notes Payable account represents a 120-day 10% note issued on July1, 2012.
g) A physical count shows 4,775 of unused office supplies on hand.
Instruction:Journalize and show necessary computations if any.
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