GERMAN, MAXINE M. BSA-1A
PROBLEM 1: JOURNAL ENTRIES
Instruction: Provide the journal entries to record the transactions described below.
Example: Payment of supplies expense worth P20,000.
Answer: Supplies expense
Cash
20,000
20,000
1. The business owner contributes P100,000 cash to the business.
Cash
P100,000
Capital
P100,000
To record initial investment
2. The business obtains a loan of P800,000.
Cash
800,000
Loans Payable
800,000
To record liability
3. The business purchases equipment for P200,000 cash.
Equipment
200,000
Cash
200,000
To record purchases
4. The business purchases goods worth P500,000 on cash basis.
Inventory
500,000
Cash
500,000
To record purchases
5. The business sells goods costing P50,000 for P120,000 on cash basis.
Cash
120,000
Sales
120,000
Cost of Goods Sold
50,000
Inventory
50,000
To record sales
6. The business pays advanced rent amounting to P60,000.
Prepaid Rent
60,000
Cash
60,000
To record prepayment
7. The business pays half of the loan in #2 above.
Loans Payable
400,000
Cash
400,000
To record partial payment of loans
8. The business Pays interest expense P80,000.
Interest Expense
80,000
Cash
80,000
To record expenses
9. The business pays utilities expense of P10,000.
Utilities Expense
10,000
Cash
10,000
To record expenses
10. The business pays salaries expense of P32,000.
Salaries Expense
32,000
Cash
32,000
To record expenses
PROBLEM 2: JOURNAL ENTRIES
Instruction: Provide the journal entries to record the transactions described below.
1. Owner invests P1,000,000 cash to the business.
Cash
P1,000,000
Capital
P1,000,000
To record initial investment
2. Payment of P30,000 for business permit.
Tax and License Expense
30,000
Cash
30,000
To record expenses
3. Payment of 200,000 for a TV commercial to promote the business' products.
4.
5.
6.
7.
Advertising Expense
200,000
Cash
200,000
To record expenses
Purchase of inventory worth P600,000 on account.
Inventory
600,000
Accounts Payable
600,000
To record purchases on account
Sale of goods for P800,000, on account. The cost of the goods sold is P500,000.
Accounts Receivable
800,000
Sales
800,000
Cost of Goods Sold
500,000
Inventory
500,000
To record sales
Collection of P700,000 on accounts receivable.
Cash
700,000
Accounts Receivable
700,000
To record receivables
Payment of P300,000 accounts payable.
Accounts Payable
300,000
Cash
300,000
To record payment of liability
8. Payment of P70,000 for rent expense.
Rent Expense
70,000
Cash
70,000
To record expenses
9. Payment of P8,000 for utilities expense.
Utilities Expense
80,000
Cash
80,000
To record expenses
10. Owner withdraws P20,000 cash from the business.
Withdrawal
20,000
Cash
20,000
To record drawing
PROBLEM 3
1. The owner invests P100,000 cash to the business.
a. Cash
100,000
Capital
100,000
To record initial investment
b.
ASSETS
=
LIABILITIES
Cash 100,000
2. Payment of Mayor's Permit costing P10,000.
a. Tax and Licensure Expense 10,000
Cash
10,000
To record expenses
b.
ASSETS
=
LIABILITIES
Cash (10,000)
+
EQUITY
Capital 100,000
+
EQUITY
Tax and Licensure
Expense (10,000)
3. Payment of tarpaulin, pamphlets, and other marketing and promotional activities totaling
P20,000.
a. Advertisement Expense
20,000
Cash
20,000
To record expenses
b.
ASSETS
=
LIABILITIES
+
EQUITY
Cash (20,000)
Advertisement Expense
(20,000)
4. Purchase of office supplies worth P1,000. The business uses a prepaid account.
a. Office Supplies
1,000
Prepaid Expense
1,000
To record purchases using prepaid account
b.
ASSETS
Office Supplies
1,000
Prepaid Expense
(1,000)
=
LIABILITIES
5. Purchase of goods worth P40,000 on cash basis.
a. Inventory
40,000
Cash
40,000
To record purchases
b.
ASSETS
=
LIABILITIES
Inventory
40,000
Cash (40,000)
+
EQUITY
+
EQUITY
+
EQUITY
Sales 70,000
6. Sale of goods costing P30,000 for P70,000 on account.
a. Accounts Receivable
70,000
Sales
70,000
Cost of Goods Sold
30,000
Inventory
30,000
To record sales
b.
ASSETS
Accounts
Receivable
70,000
Inventory
(30,000)
=
LIABILITIES
7. Payment of P10,000 delivery expense for the goods sold in #6.
a. Freight out
10,000
Cash
10,000
To record expenses
b.
ASSETS
=
LIABILITIES
+
Cash (10,000)
8. Collection of P50,000 accounts receivable.
Cost of goods sold
(30,000)
EQUITY
Freight out (10,000)
a. Cash
50,000
Accounts Receivables
To record receivables
b.
ASSETS
Cash 50,000
Accounts
Receivables
(50,000)
=
50,000
LIABILITIES
9. Payment of P8,000 salaries expense.
a. Salaries Expense
8,000
Cash
8,000
To record expenses
b.
ASSETS
=
LIABILITIES
Cash (8,000)
+
EQUITY
+
EQUITY
Salaries Expense (8,000)
10. Payment of electricity, water, internet, and mobile charges totaling P12,000.
a. Utilities Expense
12,000
Cash
12,000
To record expenses
b.
ASSETS
=
LIABILITIES
+
EQUITY
Cash (12,000)
Utilities Expense (12,000)
PROBLEM 3 TABLE COMPILATION
1.
2.
Assets
Cash 100,000
Cash (10,000)
=
=
=
Liabilities
0
0
+
+
+
3.
Cash (20,000)
=
0
+
4.
Office Supplies 1,000
Prepaid Expense
(1,000)
Inventory 40,000
Cash (40,000)
Accounts Receivable
70,000
Inventory (30,000)
Cash (10,000)
Cash 50,000
=
0
+
Equity
Capital 100,000
Tax and Licensure
Expense (10,000)
Advertisement
Expense (20,000)
0
=
0
+
0
=
0
+
=
=
0
0
+
+
Sales 70,000
Cost of Goods Sold
(30,000)
Freight Out (10,000)
0
5.
6.
7.
8.
9.
Accounts Receivable
(50,000)
Cash (8,000)
=
0
+
10.
Cash (12,000)
=
0
+
Total
P80,000 =
0 +
Salaries Expense
(8,000)
Utilities Expense
(12,000)
P80,000
PROBLEM 4
1. The business owner invests P200,000 cash to the business.
a. Cash
200,000
Capital
200,000
To record initial investment
b.
ASSETS
=
LIABILITIES
+
Cash 200,000
2. The business obtains a loan of P600,000.
a. Cash
600,000
Loans Payable
600,000
To record liability
b.
ASSETS
=
LIABILITIES
Cash 600,000
Loans Payable 600,000
+
3. The business purchases equipment worth P450,000 for cash.
a. Equipment
450,000
Cash
450,000
To record purchases
b.
ASSETS
=
LIABILITIES
+
Equipment
450,000
Cash (450,000)
4. The business pays advanced rent of P20,000.
a. Prepaid Rent
20,000
Cash
20,000
To record prepayment
b.
ASSETS
=
LIABILITIES
Prepaid Rent
20,000
Cash (20,000)
+
EQUITY
Capital 200,000
EQUITY
EQUITY
EQUITY
5. The business purchases inventory worth P500,000 on account.
a. Inventory
500,000
Accounts Payable
500,000
To record purchases on account
b.
ASSETS
=
LIABILITIES
+
Inventory
Accounts Payable 500,000
500,000
EQUITY
6. The business sells goods costing P80,000 for P200,000 on cash basis.
a. Cash
200,000
Sales
200,000
Cost of Goods Sold
80,000
Inventory
80,000
To record sales
b.
ASSETS
=
LIABILITIES
+
EQUITY
Cash 200,000
Sales 200,000
Inventory
Cost of Goods Sold
(80,000)
(80,000)
7. The business sells goods costing P400,000 for 900,000 on account.
a. Accounts Receivable
900,000
Sales
900,000
Cost of Goods Sold
400,000
Inventory
400,000
To record sales
b.
ASSETS
=
LIABILITIES
+
EQUITY
Accounts
Sales 900,000
Receivable
900,000
Inventory
Cost of Goods Sold
(400,000)
(400,000)
8. The business pays accounts payable of P400,000.
a. Accounts Payable
400,000
Cash
400,000
To record payment of liability
b.
ASSETS
=
LIABILITIES
+
Cash (400,000)
Accounts Payable (400,000)
9. The business owner withdraws P10,000 from the business.
EQUITY
a. Withdrawal
10,000
Cash
10,000
To record drawing
b.
ASSETS
=
LIABILITIES
Cash (10,000)
10. The business pays interest expense of P15,000.
a. Interest Expense
15,000
Cash
15,000
To record expenses
b.
ASSETS
=
LIABILITIES
Cash (15,000)
+
EQUITY
Withdrawal (10,000)
+
EQUITY
Interest Expense (15,000)
PROBLEM 4 TABLE COMPILATION
Assets
Cash 200,000
Cash 600,000
Equipment 450,000
Cash (450,000)
Prepaid Rent 20,000
Cash (20,000)
Inventory 500,000
=
=
=
=
6.
Cash 200,000
Inventory (80,000)
=
+
7.
Accounts Receivable
900,000
Inventory (400,000)
Cash (400,000)
Cash (10,000)
Cash (15,000)
=
+
1.
2.
3.
4.
5.
8.
9.
10.
Total
Liabilities
Loans Payable 600,000
=
=
=
=
=
P1,495,000 =
+
+
+
+
Equity
Capital 200,000
+
Accounts Payables 500,000
Accounts Payable (400,000)
+
+
+
+
P700,000 +
Sales 200,000
Cost of Goods Sold
(80,000)
Sales 900,000
Cost of Goods Sold
(400,000)
Withdrawal (10,000)
Interest Expense
(15,000)
P795,000