Analyzing Transactions To Start A Business

Cruz Jr, Jose M.
BSHM 3-G
ANALYZING TRANSACTIONS TO START A BUSINESS

Exercises
a. Using the accounting equation, compute the missing amounts for each of the following companies,
stated in millions of pesos reported in their 2019 financial reports:
Company Assets = Liabilities +
Kopiko ₱90.29 ₱64.13

Nescafe (2) ₱ 69.67 ₱47.74
Great Taste ₱7.70 (3) ₱ 5.69
San Mig Coffee ₱19.89 61.20%
5. Which Company has the highest net worth? Kopiko with ₱ 90.29 net worth
b. Jacklyn is the owner of a JC Consulting business. At the end of its accounting period December 31,
2018, JC Consulting has assets of P1,325,000 and liabilities of P1,142,000.
6. Using the accounting equation, determine Jacklyn, Capital as of December 31, 2018.
Assets = Liabilities + Equity

Dec, 31, 2018 ₱1,325,000 ₱1,142,000 ₱183,000
7. How much is Jacklyn, Capital as of December 31, 2019, assuming that assets increased by
P84,000 and liabilities increased by P47,000 during 2019?
Assets = Liabilities + Equity

Dec, 31, 2018 ₱1,325,000 ₱1,142,000 ₱183,000
Dec, 31, 2019 ₱84,000 ₱47,000 ₱37,000
₱1,409,000 ₱1,189,000 ₱220,000
c. Complete the Statement of Financial Position of Ms. Ruth and prepare the Statement of Owner’s
Equity. She started the WashUrClothes business Jan 2019 with a cash capital of P150,000.
Assets Liabilities and Owners Equity
Cash ₱60,000 Account Payable ₱100,000

Accounts Recievable ₱10,000 (8) Notes Payable ₱250,000 (11)
Car ₱120,000 (9) Ruth, Capital ₱220,000 (12)
Equipments ₱380,000 (10)
Total Assets: ₱570,000 (13) Total Liab. And OE: ₱570,000 (14)
Determine the missing figures based on the following information and give the total assets, total
liabilities and owner’s equity:
i. Financial records show that the business has P10,000 receivable from customers.
ii. The car costs a friend P360,000 but Ruth got it from him for only 1/3 of its costs.
iii. Ms. Ruth signed a note payable to the bank for P500,000 which he used to buy the car and
equipment.
iv. Only half of the note in (iii) is outstanding.
v. Ruth, Capital should represent the amount missing amount required to show a balanced
structure of the assets against the liabilities and owner’s equity.
Compare the initial amount invested and the ending capital balance from one information that is
missing.
15. How much was the change in the Capital of Ruth? ₱30,000
16. Assume the business has not started the operation yet, what would that change mean?
17. Ignore no. 22. Assume the business has already started operation and there are no additional
investment nor personal drawings made, what would that change mean? Income
companies,
Equity
(1) ₱ 26.16
₱21.93
₱2.01
(4) ₱ 7.72
ber 31, 2018.
ssets increased by
₱250,000 (11)
₱220,000 (12)
₱570,000 (14)
Revenue
PAGE 1
d. Jham Villa started a new business in advertising called Wow Advertising. The following are the
transactions which you are required to summarize using the format presented in the demonstration
problem (please refer to power point presentation for Part 2) except that balances be extracted only
after the last transaction. Use the heading provided.
FINANCIAL TRANSACTION WORKSHEET- WOW ADVERTISING
Date Transactions Cash

Feb. 05 She transferred half of her P300,000 savings to the account of the business. 150,000
Feb. 09 Purchased art supplies and paid P15,000 in cash. -15,000
Feb. 16 Purchased photo equipment at a cost of P105,000 from Camera World. -35,000
She paid one third and promised to pay another one third at the end of the month
Feb. 20 A friend, Joe Vi, bought a fax machine a year ago for P10,000. She told this to
Villa who promised to pay her after 30 days
Feb. 22 Purchased paper for fax machine and paid cash, P1,500. -1,500
Feb. 25 Purchased furniture and fixtures on credit P8,000.
Feb. 28 Paid one half of the account owing to Camera World and issued a note promising -17,500
to pay the balance within 30 days.
Total per Account 81,000
Additional requirements:
1. What amount did you use in recording cash investment? What concept supports this?
2. What amount did you use in recording the fax machine? What concept supports this?
3. Prepare a statement of financial position based on the final balances.
WOW ADVERTISING
Statement of Financial Position
As of February 28
Assets Liabilities and Owners E
Cash P 81,000 Accounts Payable

Art Supplies 15,000 Notes Payable
Office Supplies 1,500 Villa Capital
Equipment 115,000
Furniture & Fixtures 8,000
Total P 220,500 Total
ASSETS LIABILITIES
Art Supplies Office Supplies Equipment Furniture & Fixtures Account Payable
15,000
105,000 35,000
10,000
1,500
8,000 8,000
-17,500
-17,700
15,000 1,500 115,000 8,000 8,000
₱ 220,500.00 P 70,500 +
P 150,000, Business Entity Concept

P 10,000, Dual Aspect Concept
Liabilities and Owners Equity
Accounts Payable P 8,000

Notes Payable 62,500
Villa Capital 150,000
P 220,500
PAGE 2
LIABILITIES EQUITY
Notes Payable Villa Capital
150,000
35,000
10,000
17,500
62,500 150,000
P 70,500 + P 150000

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Cruz Jr, Jose M.

ANALYZING TRANSACTIONS TO START A BUSINESS

Company Assets = Liabilities +

Kopiko ₱90.29 ₱64.13

Assets = Liabilities + Equity

Assets = Liabilities + Equity

Assets Liabilities and Owners Equity

Cash ₱60,000 Account Payable ₱100,000

ber 31, 2018.

FINANCIAL TRANSACTION WORKSHEET- WOW ADVERTISING

Date Transactions Cash

Cash P 81,000 Accounts Payable

P 150,000, Business Entity Concept

Liabilities and Owners Equity

Accounts Payable P 8,000

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