TUTORIAL 1
QUESTION 1
Classify each of these items as an asset (A), liability (L), or owner’s equity (OE).
_____ 1. Accounts receivable
_____ 2. Accounts payable
_____ 3. Owner’s Capital
_____ 4. Supplies
_____ 5. Utilities expense
_____ 6. Cash
_____ 7. Notes payable
_____ 8. Equipment
_____ 9. Supplies
_____ 10. Owner’s Drawings
_____ 11 Buildings
_____ 12 Notes Payable
_____ 13. Salaries and Wages Payable
QUESTION 2
Identify the impact on the accounting equation of each of the following transactions.
1.
Purchase office supplies on account.
2.
Paid secretary weekly salary.
3.
Purchased office furniture for cash.
4.
Received monthly utility bill to be paid at later time.
5.
Received cash from customers for services provided.
6.
Paid accounts payable by cash.
QUESTION 3
Analyze the transactions of a business organized as a proprietorship described below and indicate
their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus
sign (–) to indicate a decrease.
Assets
= Liabilities
+
Owner’s
Equity
1.
Received cash for services rendered.
=
+
2.
Purchased office equipment on credit.
=
+
3.
Paid employees' salaries.
=
+
4.
Received cash from customer in
=
+
payment on account.
5.
Paid telephone bill for the month.
=
+
6.
Paid for office equipment purchased in
=
+
Transaction 2.
7.
Purchased office supplies on credit.
=
+
8.
Owner withdrew cash for personal
=
+
=
+
=
+
expenses.
9.
Obtained a loan from the bank.
10. Billed customers for services
rendered.
QUESTION 4
On January 1, Bella set up a bridal boutique. The following transactions were completed
during the month.
(a) Invested RM25,000 cash to start the business.
(b) Paid RM600 cash for January outlet rent.
(c) Purchased office equipment for RM8,000 cash.
(d) Incurred RM450 of advertising costs in the Explorer Magazine, on account.
(e) Paid RM750 cash for office supplies.
(f) Earned RM10,000 for services rendered: RM3,000 cash is received from customers
and the balance of RM7,000 is billed to customers on account.
(g) Withdrew RM300 cash for personal use.
(h) Paid Explorer Magazine amount due in transaction (d).
(i) Paid employee’s salaries RM5,600.
(j) Received RM5,400 in cash from customers who have previously been billed in
transaction (f).
Instructions
Prepare a tabular analysis of the transactions using the following column headings:
ASSETS
Accounts
Trans
Cash
LIABILITIES
OWNER’S EQUITY
Office
Accounts
Bella,
Equipment
Payable
Capital
Supplies
Receivable
QUESTION 5
Use the accounting equation to answer the following questions.
1. Penny Sales Co. has total assets of RM140,000 and total liabilities of RM54,000. What is
owner’s equity?
2. The Virtual Sun Center has total assets of RM252,000 and owner’s equity of RM100,000. What
are total liabilities?
3. Columbia River Restaurant has total liabilities of RM50,000 and owner’s equity of RM80,000.
What are total assets?
QUESTION 6
The following transactions occurred during the month of May for Reka Teemor Corporation where
the company have retained earnings on 1st May RM100,000.
May
2
Paid RM10,000 for office rent for the month.
3
Purchased RM8,000 of supplies on account.
5
Paid RM25,000 to advertise in the local newspapers.
9
Received RM45,000 cash for services provided.
12
RM800 cash dividend paid to shareholders.
15
Performed RM35,000 of services on account.
17
Paid RM23,000 for employee salaries.
20
Paid for the supplies purchased on account on May 3.
23
Received a cash payment of RM20,000 for services provided
on account on May 15.
26
Borrowed RM50,000 from the bank on a note payable.
29
Purchased office equipment for RM25,000 on account.
30
Paid RM2,500 for utilities.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using
the following format:
RETAINED
ASSETS
LIABILITIES
EARNINGS
Account
s
Trans Cash
Office
Accounts
Notes
Retained
Payable
Earnings
Supplies
Receivable
Equipment Payable
QUESTION 7
Selected transactions for Parton Company are listed below. List the number of the transaction
and then describe the effect of each transaction on assets, liabilities, and owner's equity.
Sample: Made initial cash investment in the business.
The answer would be—Increase in assets and increase in owner's equity.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Paid monthly utility bill.
Purchased new display case for cash.
Paid cash for repair work on security system.
Billed customers for services performed.
Received cash from customers billed in 4.
Withdrew cash for owner's personal use.
Incurred advertising expenses on account.
Paid monthly rent.
Received cash from customers when service was rendered.
QUESTION 8
Compute the missing amount in each category of the accounting equation.
(a)
(b)
(c)
Assets
RM319,000
RM223,000
RM ?
Liabilities
RM ?
RM 79,000
RM233,000
Owner's Equity
RM143,000
RM ?
RM325,000
QUESTION 9
Tesla Car Cleaning has the following accounts:
Accounts Receivable
Accounts Payable
Cash
Supplies
Notes Payable
Owner’s Capital
Owner’s Drawing
Equipment
Identify which items are (1) Assets
(2) Liabilities
(3) Owner's Equity
QUESTION 10
Determine the missing items.
Assets = Liabilities + Owner’s Equity
RM85,000
(b)
RM84,000
RM52,000
(a)
RM28,000 RM34,000
(c)
RM50,000