Individual Activity FABM1 (Accounting Equation)

Listed below are ten business transactions for Puring Company during its first month of operations:
a. Owner invested cash in the business amounting to P300,000
b. Purchased equipment for cash amounting to P50,000
c. Purchased inventories through credit amounting to P35,000
d. Purchased furniture amounting to P30,000. Made partial payment with cash P10,000 and incurred an accounts
payable for the balance P20,000
e. Paid cash to the local government for business permit P9,000
f. Made sales of P17,000 (P12,000 cash sales, P5,000 credit sales)
g. The cost of sales made in (f) amounted to P8,500
h. Paid accounts payable in (d)
i. Collected P2,500 out of the P5,000 credit sales in (f)
j. Paid employee P12,000

Indicate the effects of the given transactions on each of the financial statement elements in the table shown below. The
answer for transaction (a) is given as an example.

ASSETS = LIABILITIES + EQUITY REVENUES EXPENSES

a P + 300,000 P + 300,000
= +
b
= +

c
= +

d
= +

e
= +
f
= +

g
= +

h
= +
i
= +

j
= +
On the transaction summary table below, indicate the effect of each transaction on each account. Put “ + “ if the account
has increased or “ – “ if the account has decreased. Put the amount of increase or decrease for each account.

ASSETS = LIABILITIES + OWNER'S EQUITY

Accounts Office Accounts Loan Jane, Revenues Expenses
Cash Receivable Equipment Payable Payable Capital
1. Jane invested P200,000
= +
cash.
2. Rendered services to
= +
Mr. Lee on account, P10,000
3. Cash services to clients,
= +
P22,000.
4. Bought P30,000 worth of
= +
office equipment on account.
5. Paid electric bill to Meralco,
= +
P1,800.
6. Mr. Lee paid 50%
= +
(transaction #2)
7. Proceeds from bank loan,
= +
P50,000.
8. Cash collections from
= +
various customers, P18,000
9. Jane withdrew P10,000
= +
for personal use.
10. Paid the office equipment
= +
in full.
11. Paid secretary's salary,
= +
P4,000
12. Paid 25% of the bank loan
= +
13. Jane made an additional
= +
investment, P20,000
14. Paid monthly rent
= +
P5,000.
15. Paid interest on bank loan
= +
P420.