12. Fay Fedor started a delivery service, Fed Deliveries, on July 1, 2019.

The following transactions occurred during the

month of July:

July 01 She contributed P100,000 cash.

02 Purchased a used van for deliveries for P120,000 by paying P20,000 and signed a
two-year note payable for the remaining balance.
03 Paid P15,000 for office rent for the month.
05 Delivery services amounted to P44,000, half on account.
09 Cash of P2,000 withdrawn by May.
12 Purchased supplies for P1,500 on account.
15 Received cash of P12,500 for services provided on July 5.
17 Purchased gasoline for P7,500 on account.
20 Received P15,000 from customers of which P5,000 was for past accounts.
23 Made a cash payment of P25,000 on the note payable.
26 Received bills for utilities P5,000 but paid only P2,500.
29 Paid for the gasoline purchased on account on June 17.
30 Paid P30,000 for employee salaries. A third of supplies remained on hand.

Instructions:
a) Show the effects of the above transactions on the accounting equation using the following format:
Date Cash Accounts Supplie Delivery Account Notes Utilitie Fedor,Capita Revenue Account
Receivabl s Van s Payable s l (Drawings) (Expenses Title
e Payable Payabl )
e
1 100,00 100,000 Cash
0
2 (20,000 120,000 100,00 Delivery
) 0 Van
3 (15,000 (15,000) Rent
) Expense
5 +22,00 22,000 44,000 Service
0 Income
9 (2,000) (2,000) Drawing
12 1,500 1,500 Supplies
15 12,500 (12,500) Accounts
Receivabl
e
17 7,500 (7,500) Gas & Oil
Expense
20 15,000 (5,000) 10,000 Service
Income
23 (25,000 (25,000 Note
) ) Payable
26 (2,500) 2,500 (5,000) Utilities
Expense
29 (7,500) (7,500) Supplies
30 (30,000 (1,000) (30,000) Salaries
) Expense
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 (1,000) Supplies
Expense
Tota ₱47,50 ₱ 4,500 ₱ 500 ₱120,00 ₱1,500 ₱75,00 ₱2,500 ₱98,000 -4,500
l 0 0 0

b) Prepare an income statement for the month of July.

FED DELIVERIES
Income Statement
For the month ended July 31

Service Income ₱ 54,000

Less Operating Expense:
Rent Expense ₱ 15,000
Gas & Oil Expense 7,500
Utilities Expense 5,000
Salaries Expense 30,000
Supplies Expense 1,000 (58,500)
NET LOSS -4,500

c) Prepare a classified statement of financial position as at July 31.

FED DELIVERIES
Statement of Financial Position
July 31

ASSETS
Cash ₱ 47,500
Accounts Receivable 4,500
Supplies 500
Delivery Van 120,000
Total ASSETS ₱ 172,500

LIABILITIES & OWNER’S EQUITY

Accounts Payable ₱ 1,500
Notes Payable 75,000
Utilities Payable 2,500
Fedor, Capital 93,500
Total LIABILITIES & OWNER’S EQUITY ₱ 172,500

14. Mabel Wong began a professional practice system analyst on July 1. She plans to prepare monthly financial
statements. During July, the owner completed the following transactions:

July 01 Owner invested P50,000 cash along with furniture and fixtures that had a P20,000 market value two years
ago but was now worth P10,000 only.
02 Paid P25,000 cash for July rent (including P500 water bill) of a fully furnished office space at the Madrigal
Building.
04 Purchased P120,000 worth of state-of-the-art equipment on credit for thirty monthly installments
payments
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 06 Purchased office supplies for cash, P2,500.
08 Completed work for a client and immediately collected the P32,000 cash earned.
10 Completed work for a client and sent a bill for P27,000 to be paid within thirty days.
15 Paid an assistant P6,200 cash as wages for 15 days.
18 Collected P15,000 cash on the amount owed by the client.
25 Completed work for another client who paid only P40,000 or 40% of the total computerized system. The
client promised to pay the balance in thirty days.
28 Owner withdrew p5,000 cash for personal use.
28 Paid the first installment to settle the liability on the equipment purchased.
30 Paid salary of assistant.
31 Received PLDT bill, P1800 and Meralco bill, P3,800
Used up P2,000 worth of supplies.
Required:
Analyze the above transactions in an accounting equation table using the following headings for columns: Cash;
Accounts receivable; Office supplies; Equipment; Accounts payable; Notes payable; Utilities payable; Wong, Capital;
Explanation of Changes in Capital. Then use additions and subtractions to show the effects of the transactions on
individual items of the accounting equation. Show balances after all transactions are recorded.
Date Cash Accounts Office Furniture Equipment Accounts Utilities Wong, Explanation of
Receivable Supplies & Fixture Payable Payable Capital Changes in Capital
July ₱50,000 ₱10,000 ₱60,000 Investment
1
2 (25,000 (24,500) Rent Expense
) (500) Utilities Expense
4 120,000 120,000
6 (2,500) 2,500
8 32,000 32,000 Service Income
10 +27,000 27,000 Service Income
15 (6,200) (6,200) Salaries Expense
18 15,000 (15,000)
25 40,000 60,000 100,000 Service Income
28 (5,000) (4,000) (5,000) Wong, Drawing
(4,000)
30 (6,200) (6,200) Salaries Expense
31 (2,000) 5,600 (5,600) Utilities Expense
(2,000) Supplies Expense
₱88,100 ₱72,000 ₱500 ₱10,000 ₱120,000 ₱116,000 ₱5,600 ₱169,000

₱ 290,600 = ₱ 290,600

a. Prepare an income statement for the month of July.

WONG SYSTEM ANALYST
Income Statement
For the month ended July 31
Service Income ₱ 159,000
Less Operating Expense:
Rent Expense ₱ 24,500
Utilities Expense 6,100
Salaries Expense 12,400
Supplies Expense 2,000 (45,000)
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 NET INCOME ₱ 114,000

b. Prepare a statement of owner’s equity for the month of July.

WONG SYSTEM ANALYST

Statement of Changes in Owner’s Equity
For the month ended July 31

Wong, Beginning Capital July 1 ₱ 60,000

Add Net Income 114,000
Total 174,000
Less Drawings 5,000
Wong, Ending Capital July 31 ₱169,000

c. Prepare a classified report form of statement of financial position as at July 1.

WONG SYSTEM ANALYST

Statement of Financial Position
July 31

ASSETS
Cash ₱ 88,100
Accounts Receivable 72,000
Office Supplies 500
Furniture & Fixture 10,000
Equipment 120,000
Total ASSETS ₱290,600

LIABILITIES & OWNER’S EQUITY

Accounts Payable ₱116,000
Utilities Payable 5,600
Wong, Capital 169,000
Total LIABLITIES & OWNER’S EQUITY ₱290,600

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