PROBLEM 2:

Pacman completed the following transactions for the month of May, 2018.

MAY 2 Opened and advertising agency and named it “Pak na Pak AD Co.” by
investing the following:
 Cash, P150, 000
 Office Equipment, P55, 000
 Old Car, P90, 000
 Land, P275, 000
 Building, P1, 200, 000
 The business assumed responsibility for a P1, 000, 000 promissory
note that was issued to finance the purchase of land and building
3 Purchased office supplies, P1, 000 and additional office equipment P7,000
both on credits.
6 Collected P65, 000 fees for an advertising campaign of a client
14 Purchased additional office equipment on credit, P11, 000.
16 Paid for advertising that had appeared on a national newspaper, P11,800
17 Traded the agency’s old car, and paid P100, 000 for a new car.
19 Paid the office secretary’s salary P8, 500.
20 Paid the account last May 3
22 Completed a marketing research for a client for P8,000 fees on credit
24 Collected P29, 500 fees on an advertisement made for a client
26 The client last May 22 paid P4, 000 of the amount owed
27 Paid the secretary’s salary, P8, 500
29 Paid P4, 750 for a magazine advertisement that had already appeared
30 Pacman withdrew P15, 000 for personal use

Use the following accounts:

Cash; Accounts Receivable; Office Equipment; Office Supplies; Car; Land; Building;
Accounts Payable; Notes Payable; Pacman, Capital; Pacman, Drawings; Advertising
and Marketing Fees; Salaries Expense; Advertising Expense
ANSWER KEYS:
DATE ACCOUNT TITLES AND EXPLANATIONS PR DEBIT CREDIT
2018
MAY 2 CASH P150, 000
OFFICE EQUIPMENT 55, 000
OLD CAR 90, 000
LAND 275, 000
BUILDING 1, 200, 000
NOTES PAYABLE P1, 000, 000
PACMAN, CAPITAL 770, 000

3 OFFICE SUPPLIES 1, 000

OFFICE EQUIPMENT 7, 000
ACCOUNTS PAYABLE 8, 000

6 CASH 65, 000

ADVERTISING AND MKTG FEES 65, 000

14 OFFICE EQUIPMENT 11, 000

ACCOUNTS PAYABLE 11, 000

16 ADVERTISING EXPENSE 11, 800

CASH 11, 800

17 NEW CAR 190, 000

OLD CAR 90, 000
CASH 100, 000

19 SALARIES EXPENSE 8, 500

CASH 8, 500

20 ACCOUNTS PAYABLE 8, 000

CASH 8, 000

22 ACCOUNTS RECEIVABLE 8, 000

ADVERTISING AND MKTG FEES 8, 000

24 CASH 29, 500

ADVERTISING AND MKTG FEES 29, 500

26 CASH 4, 000
ACCOUNTS RECEIVABLE 3, 000

27 SALARIES EXPENSE 8, 500

CASH 8, 500
 29 ADVERTISING EXPENSE 4, 750
CASH 4, 750

30 PACMAN, DRAWINGS 15, 000

CASH 15, 000

POSTING:
ACCOUNTS TOTAL DEBITS TOTAL CREDITS ENDING BALANCE
DEBIT CREDIT
CASH 687, 000
ACCOUNTS 90, 000
RECEIVABLE
OFFICE EQUIPMENT 2, 000
OFFICE SUPPLIES 0
NEW CAR 0
OLD CAR 0
LAND 800, 000
BUILDING 10, 000
ACCOUNTS PAYABLE 8, 000
NOTES PAYABLE 3, 000
PACMAN, CAPITAL
PACMAN, DRAWINGS
ADVERTISING AND
MKTG FEES
SALARIES EXPENSE
ADVERTISING EXPENSE
TOTALS 800, 000 800, 000