The Accounting Equation and the Double Entry System

Problem #8
Effect and Transactions

The following selected transactions were completed by Roberto Orcajada Delivery Service
During July 2020:

A 1. Cash received from delivery service, P92,700

D 2. Paid creditors on account, P20,000
C 3. Received cash from owner as additional investment, P600,000
E 4. Paid advertising expense, P5,000
C 5. Billed customers for delivery services on account, P55,200
A 6. Purchased supplies for cash, P6,000
D 7. Paid rent for July, P20,000
A 8. Received cash from customer on account, P25,400
A 9. Determined that the cost of supplies on hand was P2, 440 so P4, 560 of
supplies were used during the month.
E 10. Owner withdrew cash for personal use, P20,000

Indicate the effects of each transaction on the space provided.

a. Increase an asset, decrease another asset.
b. Increase an asset, increase a liability.
c. Increase an asset, increase owner’s equity.
d. Decrease an asset, decrease a liability.
e. Decrease an asset, decrease owner’s equity.
 The Accounting Equation and the Double Entry System
Problem #9
Financial Transaction Worksheet

The assets, liabilities and owner’s equity of Deogracia Corpuz who operates a repair shop are
expressed in equation from below. Corpuz complete the following transactions:

Asset Liabilities Owner’s Equity

Cash + Supplies + Land = Accounts Payable + Corpuz Capital
(1) 500, 000 + + = + 500, 000 (INV)
(2) + 20, 000 + = 20, 000 +
bal. 500, 000 20, 000 20, 000
(3) (140, 000) + + 140, 000 = +
bal. 360, 000 20, 000 140, 000 20, 000 500, 000
(4) (18,000) + + = (18,000) +
bal. 342, 000 20, 000 140, 000 2, 000 500, 000
(5) (25, 000) + + = + (25, 000)
bal. 317, 000 20, 000 140, 000 2, 000 475, 000 (W)
(6) (28, 000) + + = + (28, 000)
bal. 289, 000 20, 000 140, 000 2, 000 447, 000 (E)
(7) + + = 10, 000 + (10,000)
bal. 289, 000 20, 000 140, 000 12, 000 437, 000 (E)
(8) 100, 000 + + = + 100,000
bal. 389, 000 20, 000 140, 000 12, 000 537, 000 (INV)
(9) 5, 000 + + = + 5, 000
bal. 394,000 20,000 140,000 12,000 542,000 (I)
(10 + (6, 000) + = + (6, 000)
)
Bal. 394, 000 14,000 140,000 12,000 536,000 (E)
394, 000 + 14, 000 + 140, 000 = 12, 000 + 536, 000
548, 000 = 548, 000
1. Organized a repair shop and deposited P500,000 cash in the bank for use by the business.
2. Purchased P20,000 of supplies on account.
3. Purchased land for future repair site for P140,000 cash
4. Paid P18,000 to creditors.
5. Withdrew P25,000 for personal use
6. Paid P28,000 for site and equipment rent for the month.
7. During the month , P10,000 expenses were incurred on account by the business.
8. During the month, Corpuz invested another P100,000 of personal funds in the business.
9. Received P5,000 for a cash service call.
10. Corpuz used P6,000 worth of supplies.
 The Accounting Equation and the Double Entry System
Required:
On each of the numbered, show by addition or subtraction the effect of each of the transaction
on the equation. For each transaction, identify the changes in owner’s equity by placing the
letter I (Income), E (expense), W (withdrawal), or INV (investment) at the right of each increase
or decrease in owner’s equity. On the lines labeled “bal” (i.e. balance) show the new equation
resulting from the transaction.
 The Accounting Equation and the Double Entry System
Problem #10
Transaction in a Complete Worksheet

Nine transactions are reflected in the October transaction worksheet of the Teresita Galang
Financial Planner presented below:

Teresita Galang Financial Planner

Financial Transaction Worksheet
Month of October 2020
A = L OE
Cash Account Supplies Office Accounts Galang
Receivable Equipment Payable Capital
Bal. ₱15000 ₱17500 ₱4500 ₱153000 ₱60000 ₱130000
1 7000 (7000)
2 (5000) 5000
3 25000 25000
4 24500 24500
5 16000 (16000)
6 (6500) (6500)
7 3700 3700
8 (2500) (2500)
9 (5000) (5000)
(₱3000) ₱35000 ₱13200 ₱178000 ₱98200 ₱131000
₱229200 = ₱229200

Required:
1. Described each of the above transactions. The last transaction is the only transaction
affecting the capital account that does not affect profit.
2. What was the change in the Cash account for the Month? In Galang, Capital?
 The Accounting Equation and the Double Entry System

Required 1

1 Collected P7,000 on account.

2 Purchased supplies for cash, 5,000

3 Acquired equipment on account, 25,000

4 Rendered services on account, 24,500

5 Incurred expense on account, 16,000

6 Settle account 6,500

7 Purchased supplies on account, 3,700

8 paid expenses, 2,500

9 Withdrawal by owner, 5,000

Required 2

P12,000 decrease ( change in cash )

P1,000 increase (change in Capital )

 The Accounting Equation and the Double Entry System

Problem #11
Recording Transaction in a financial Transaction Worksheet

Nelson formed the Liceo Signages on Oct. 1, 2020. He deposited ₱250,000 in GE Money Bank
under the name of the new business entity. During the month of October 2020, the following
transaction occurred:
Oct.2 Acquired a service vehicle in the amount of ₱195,000 on account.
3 Acquired supplies for cash, ₱57,000.
9 Received ₱87,500 cash for signs painted.
10 Paid the month’s rent, ₱25,000
11 Painted signs for Cagayan Mobile on account, ₱170,000.
12 Paid ₱55,000 on account from Oct. 2
16 Withdrew ₱25,000 for personal use.
23 Collected ₱35,000 from Cagayan Mobile.
27 Paid salaries of ₱57,000 for the month.
30 Paid BayanTel ₱7,500 for communication services for the month.
31 Paid a bill from AdAsia for ₱5,500 of advertising for the month.

Required:
Establish the following accounts in a financial transaction worksheet. Cash, Accounts
Receivable; Supplies; Service Vehicle; Account Payable; and Daganta, Capital, Record in the
worksheet the transaction the listed above.

Liceo Signage
Financial Transaction Worksheet
Month of October 2020
Cash + Account + Supplies + Service = Account + Daganta
Receivable Vehicle Payable Capital
Oct 1 ₱250,000 ₱250,000
2 ₱195,000 ₱195,000
3 (₱57,000) ₱57,000
9 ₱87,500 ₱87,500
10 (₱25,000) (₱25,000)
11 ₱170,000 ₱170,000
12 (₱55,000) (₱55,000)
16 (₱25,000) (₱25,000)
23 ₱35,000 (₱35,000)
27 (₱57,000) (₱57,000)
30 (₱7,500) (₱7,500)
31 (₱5,500) (₱5,500)
Bal. ₱140,500 ₱135,000 ₱57,000 ₱195,000 ₱140,000 ₱387,500
₱527,500 = ₱527,500
 The Accounting Equation and the Double Entry System
Problem #12
Record transaction in Financial Transaction Worksheet

Stephanie Calamba is the owner of the Calamba Repair Specialist. On Jan. 1, 2021 the asset,
liabilities and propriety’s capital of the business were; Cash ₱25,000; Accounts Receivable,
P4,000; Supplies, P5,000; Equipment, P60,000; Accounts Payable, P9,000; Calamba, Capital,
P85,000.The transactions for the month of January were as follows.

Cash Account Supplies Equipment = Accounts Calamba,

Receivable Payable Capital
Jan. 1
Balance P25,000 P4,000 P5,000 P50,000 P9,000 P85,000
A
B
C
D
E
F
G
H
I
 The Accounting Equation and the Double Entry System

Problem #13
Record Transaction in a Financial Transaction Worksheet

Emerta Modesto established her own business called Modesto’s Self Storage. The account
headings are presented below. Transaction completed during the Month follow.

Asset
Cash + Account Receivable + Prepaid Insurances + Office Equipment

Liabilities + Owner’s Equity

Accounts Payable Modesto’s, Capital + Revenue – Expenses

a) Deposited P120,000 in a bank account in the name of the business.

b) Bought office equipment on account from PHINMA Corporation, P31,000
c) Paid rent for the month, P24,000
d) Bought supplies for cash, P4,500
e) Paid salaries, P9,800
f) Received cash for storage services, P36,000
g) Received and paid the utility bill, P2,520
h) Paid Errol Emerez Graphics for advertising, P4,280 (the bill was not previously recorded)
i) Paid for a one-year liability insurance policy, P8,350
j) Billed customers for storage services on account, P33,700
k) Received cash for storage services, P23,000
l) Paid salaries, P9,900
m) Paid PHINMA Corporation P11,000 as part payment on the office equipment bought in
transaction b.
n) Modesto withdrew P12,000 for personal use.

Required:
1. Record the transaction in columnar form, write plus and minus signs, and show the balance
after each transaction to be sure the equation remains in balance.
2. Write the proof of total at the bottom to show that one side of the equation equals on the other
side.
Cash + Account + Prepaid + Supplie Office + = Accounts Modesto’
Receivabl Insurance s+ Equipmen Payable + s Capital
e s t +
a P120,000 P120,000
Bal.
b P31,000 P31,000
Bal.
c (P24,000)
Bal.
d (P4,500)
 The Accounting Equation and the Double Entry System
Bal.
e (P9,800)
Bal.
f P36,000
Bal.
g (P2,520)
Bal.
h (P4,280)
Bal.
i (P8,350) P8,350
Bal.
J P33,700
Bal.
k P23,000
Bal.
l (P9,900)
Bal.
m (P11,000) (P11,000)
Bal.
n (12,000) (P12,000)
Bal. 92,650 33,700 8,350 31,000
Revenue - Expens
es
a

P24,000 c

P9,800 e

P36,000 f

P2,520 g

P4,280 h

i
 The Accounting Equation and the Double Entry System

(P33,700) j

(P23,000) k

P9,900 l

DEBIT CREDIT
Cash P92,650 Accounts Payable P20,000
Accounts Receivables P33,700 Modesto, Capital P108,000

Prepaid Insurance P8,350 Revenue P92,700

Office Equipment P31,000 Expenses P55,000

TOTAL P165,700 TOTAL P165,700

 The Accounting Equation and the Double Entry System

Problem #14
Recording Transaction in a Financial Transaction Worksheet

Ludivina Victorina, a veteran photographer, opened a studio for her professional practice on
July 1. Transactions complete during the month follow:

a. Deposited P146,700 in a bank account in the name of the business, Victorina

PhotoProfiles.
b. Bought new photography equipment on account from Canon Equipment P71,210
c. Invested Personal photography equipment into the business, P51,620
d. Paid office rent for the month, P5,500
e. Bought photography supplies for cash, P7,960
f. Paid premium for insurance cover on photography equipment, P1,240
g. Received P8,960 as professional fees for services rendered.
h. Paid salary of part-time assistant,P6,000
i. Received and paid bill for telephone service,P640
j. Paid Canon Equipment part of the amount owed on the purchased of photography
equipment, P4,200
k. Received P15,480 as professional fees for services rendered.
l. Paid for minor repairs to photography equipment, P760
m. Victorino withdrew cash for personal use, P9,600

Required:

Record the transaction of the month of July 2020 using a financial transaction worksheet. Use
the following accounts: Cash; Account Receivable, Supplies; Prepaid Insurance, Photography
Equipment; Accounts Payable; and Victorino, Capital. If the owner’s equity account is affected
by a transaction, identify it as expenses invested or withdrawal.

Ludivina Victorino Studio

Financial Transaction Worksheet
Month of July 2020
Cash Account Supplies Prepaid Photography = Accounts Victorino
Receivable Insurance Equipment Payable Capital
a 146,700 146,700
b 71,210 71,210
c 51,620 51,620
d (5,500) (5,500)
e (7,960) 7,960
f (1,240) 1,240
g 8,960 (8,960)
 The Accounting Equation and the Double Entry System
h (6,000) 6,000
i (640) (640)
j (4,200) (4,200)
k 15,480 15,480
l (760) (760)
m (9,600) (9,600)
=P134,74 =P1,240 =P130,790 = =P67,010 =P199,760
0
=P266,770 =P266,770
 The Accounting Equation and the Double Entry System
Problem #15
Transaction Analysis

Transactions:

a. Received P260,000 cash from client for services rendered.

b. Paid P480,000 of salaries to employees.
c. Collected P120,000 from clients on account.
d. The owner, Virgina Ruben, withdrew P80,000 cash for personal use.
e. Purchased P140,000 of supplies on account.
f. Billed clients P180,000 for services rendered.
g. Paid P100,000 to supplies on account.

For each of the transaction for Virgina Ruben Antique, a sole proprietorship, fill in the spaces to
answer the following questions.

1. What are the two accounts affected by the transactions?

2. What type of account is affected-asset, liability, owner’s capital, owner’s withdrawal,
income or expenses account?
3. Should the account be increased or decreased?
4. Should the account be debited or credited?

Trans. Account Affected Type of Account Increased or Debit or Credit

Decreased

a. 1 Cash Asset Increased Debit

2 Service revenue Income Increased Credit

b. 1 Salaries Expense Expense Increased Debit

2 Cash Asset Decreased Credit

c. 1 Cash Asset Increased Debit

2 Accounts Asset Decreased Credit

receivable

d. 1 Virgina Ruben Owner’s Increased Debit

withdrawal withdrawal

2 Cash Asset Decreased Credit

 The Accounting Equation and the Double Entry System

e. 1 Supplies Asset Increased Debit

2 Accounts Payable Liability Increased Credit

f. 1 Accounts Asset Increase Debit

receivable

2 Service revenue Income Increase Credit

g. 1 Accounts payable Liability Decreased Debit

2 Cash Asset Decreased Credit

 The Accounting Equation and the Double Entry System

Problem #16
Recording Transaction in a Financial Worksheet

Dolores Aguilar started Aguilar industrial Spray Services on Apr. 1, 2020. During April Aguilar
completed the following transaction:

a. Invested cash in the business, P60,000

b. Bought a service vehicle from COO Motors for P112,500, paying P22,500 in cash, with
the remainders due in thirty days.
c. Bought spray equipment on account from Misamis Farm Supplies, P18,000
d. Paid rent for the month, P 5,600
e. Paid cash for insurance on service vehicle for the year, P5,760
f. Received cash for spray services done on a building, P21,750
g. Bought supplies for cash, P5,730
h. Billed customers on account for services performed, P4,440
i. Paid cash for utilities, P960
j. Received bill for gasoline used by the services vehicle during the month, P3,270
k. Receipts from cash customers, P16,420
l. Aguilar withdrew cash for personal use, P10,500
m. Paid salaries to employees, P20,400

Required:

Record the transactions for the month of April 2020 using a financial transaction worksheet. Use
the following accounts: Cash; Account Receivable; Supplies; Prepaid Insurance; Spray
Equipment; Service Vehicle; Account Payable; and Aguilar, Capital. If the owner’s equity
account is affected by a transaction, identify it as, revenue, expenses, investment or withdrawal.

Aguilar Industrial Spray Service

Financial Transaction Worksheet
Month of April 2020
Cash Account Supplie Prepaid Spray Service = Account Aguilar
Receivabl s Insuranc Equipmen Vehicle Payable Capital
e e t
a 60,000 60,000
b (22,500) 112,500 90,000
c 18,000 18,000
d (5,600) (5,600)
e (5,760) 5,760
f 21,750 21,750
g (5,730) 5,730
h 4,440 4,440
i (960) (960)
 The Accounting Equation and the Double Entry System
j 3,270 (3,270)
k 16,420 16,420
l (10,500) (10,500)
m (20,400) (20,400)
=P26,72 =P4,440 =P5,730 =P5,760 =P18,000 =P112,50 =P111,27 =P61,88
0 0 0 0
=P173,15 =P173,15
0 0

Reason for change in capital investment

c. Expense

f. Revenue

h. Revenue

i. Expense

j. Expense

k. Revenue

l. Withdrawal

m. Expense
 The Accounting Equation and the Double Entry System

Problem #17
Recording transaction in a Financial Transaction Worksheet

On June 1, 2020, Teofila Albay, Optometrist, establish the Albay Eye Clinic. Transactions
complete during the month are as follows:

a. Albay deposited P200,000 in a bank account in the name of the business.

b. Paid office rent for the month, P8,400
c. Bought office for cash, P7,750
d. Bought office equipment on account from Dagupan Equipment, P91,800
e. Bought a computer from Del Rosario Office Outfitters, P18,400, paying P6,000 in cash
and the balance on account.
f. Performed professional services for cash, P24,210
g. Paid accounts to Del Rosario Office Outfitters, P9,000
h. Received and paid the bill for utilities, P2430
i. Paid salaries of the part-time assistant, P9,900
j. Performed professional services for cash, P25,150
k. Albay withdrew cash for personal use, P12,500

Required:

Record the transactions for the month of June 2020 using a financial transaction worksheet.
Use the following accounts: Cash; Account Receivable; Office Equipment; Account Payable; and
Albay, Capital. If the owner’s equity account is affected by a transaction, identify it as, revenue,
expenses, investment or withdrawal.

The Albay Eye Clinic

Financial Transaction Worksheet
Month of June

Cash Office = Account Albay Revenue Expense Withdrawal

Equipment Payable Captal
a 200,000 200,000
b (8,400) 8,400
c (7,750) 7,750
d 91,800 91,800
e (6,000) 18,400 12,400
f 24,210 24,210
 The Accounting Equation and the Double Entry System
g (9,000) (9,000)
h (2,430) 2,430
i (9,900) 9,900
j 25,150 25,150
k (12,500) 12,500
=P193,38 =P110,200 =P95,200 =P200,000 =P49,360 =P28,480 =P12,500
0
=P303,580 = =P303,580
 The Accounting Equation and the Double Entry System

Problem #18
Recording Transaction in T-Accounts

Remeedios Palaganas is an experienced events planner. The transactions and accounts for the
business are as follows:

a. Invested P100,000 in cash to start her own business.

b. Paid P5,000 for one month’s rent.
c. Bought office furniture for P15,000 in cash
d. Received delivery of laptop computer, P54,000 , Paid 50% down, balance due in 300
days.
e. Performed services for P12,000 in cash.
f. Performed services for P10,800 in credit.
g. Acquired a fax machine for P7,500 , paid P3,000 in cash, balance due in 10 days.
h. Received P5,400 from clients on accounts.
i. Paid P10,000 for salaries.
j. Settled on full the P4,500 balance for the fax machine.
k. Received P7,000 in cash for serviced performance.
l. Performed services for P12,000 on credit.
m. Paid P1,350 for the monthly telephone bill.
n. Paid P2,400 for the electric and water bill.
o. Collected P2,000 from clients on account.
p. Palaganas withdrew P7,000 in cash for personal expenses.

Required:

1. With the aid of T-Account, record the transaction listed above, use the following accounts;
cash; Accounts Receivable ; Office Furniture; Office Equipment; Accounts Payable; Palaganas,
Capital; Palaganas, Withdrawals; Consulting Revenue; Salaries Expenses; Rent Expense;
Utilities Expense and Miscellaneous Expense.
2. Determine the balance of the T- Accounts.
CASH
Debit Credit
a 100,000 5,000 b
e 12,000 15,000 c
h 5,400 27,000 d
k 7,000 3,000 g
o 2,000 10,000 i
4,500 j
1,350 m
2,400 n
7,000 p
=P126,400 =P75,250
 The Accounting Equation and the Double Entry System
=P51,150
Accounts Receivables
Debit Credit
f 10,800 5,400 h
l 12,000 2,000 o
=P22,800 =P7,400
=P15,400
Office Equipment
Debit Credit
d 54,000
g 7,500
=P61,500
Office Furniture
Debit Credit
c =P15,000
Accounts Payable
Debit Credit
j 4,500 27,000 d
4,500 g
=P4,500 =P31,500
=P27,000
Palaganas, Capital
Debit Credit
=P100,000 a
Palaganas, Withdrawal
Debit Credit
p =P7,000
Consulting Revenue
Debit Credit
12,000 e
10,800 f
7,000 k
12,000 l
=P41,800
Salaries Expense
Debit Credit
i =P10,000
Rent Expense
Debit Credit
b =P5,000
Utilities Expense
Debit Credit
m 1,350
n 2,400
=P3,750
 The Accounting Equation and the Double Entry System
Remedios Palaganas
Trial Balance
Month of October
Debit Credit
Cash 51,150
Accounts Receivables 15,400
Office Equipment 61,500
Office Furniture 15,000
Accounts Payable 27,000
Palaganas, Capital 100,000
Palaganas, Withdrawals 7,000
Consulting Revenues 41,800
Salaries Expense 10,000
Rent Expense 5,000
Utilities Expense 3,750
=P168,800 =P168,800
 The Accounting Equation and the Double Entry System

Problem #19
Recording Transaction in T-Accounts

The Accounts and transactions of Evelyn Tria, Systems Consultation, are shown below:

a. Invested P150,000 in cash to start he business.

b. Paid P7,500 for one month’s rent.
c. Bought office furniture for P26,000 in cash.
d. Performed services for P10,500 in cash.
e. Performed services for P12,750 on credit.
f. Bought a desktop computer for P55,000, paid 50% down, balance in 30 days.
g. Acquired a personal copies for P39,500 on credit; paid P9,500 cash, balance due in 30
days.
h. Received P7,000 from credit clients.
i. Bought additional office chairs for P8,000 on credit.
j. Issued a check for P32,500 to pay for salaries.
k. Performed services for P10,250 in cash.
l. Performed services for P11,500 on credit.
m. Issued a check for P4,000 I partial payment of the amount owed for office chairs.
n. Paid P2,250 for the monthly telephone bill.
o. Paid P2,500 for the monthly electric bill,
p. Tria withdrew P10,000 in cash for personal expenses.

Required:

1. With the aid of T-Account, record the transaction listed above, use the following accounts;
cash; Accounts Receivable ; Office Furniture; Office Equipment; Accounts Payable; Tria,
Capital; Tria, Withdrawals; Consulting Revenue; Salaries Expenses; Rent Expense; Utilities
Expense and Miscellaneous Expense.
2. Determine the balance of the T- Accounts.

Cash
Debit Credit
a 150,000 7,500 b
d 10,500 26,000 c
h 7,000 27,500 f
k 10,250 9,500 g
m 6,000 32,500 j
4,000 n
2,250 o
2,500 p
10,000 q
=P183,750 =P121,750
=P62,000
The Accounting Equation and the Double Entry System
 The Accounting Equation and the Double Entry System
Accounts Receivables
Debit Credit
d 12,750 7,000 h
l 11,500 6,000 m
=P24,250 =P13,000
=P11,250
Office Furniture
Debit Credit
c 26,000
i 8,000
=P34,000
Office Equipment
f 55,000
g 39,000
=P94,000
Accounts Payables
Debit Credit
n 4,000 27,500 f
30,000 g
8,000 i
=P4,000 =P65,500
=P61,500
Tria Capital
Debit Credit
=P150,000 a
Tria Withdrawal
Debit Credit
q =P10,000
Consulting Revenue
Debit Credit
10,500 i
12,750 j
10,250 k
11,500 l
=P45,000
Salaries Expense
Debit Credit
j =P32,500
Rent Expense
Debit Credit
b =P7,500
Utilities Expense
Debit Credit
o 2,250
p 2,500
=P4,750
 The Accounting Equation and the Double Entry System
Evelyn Tia
Trial Balance
Debit Credit
Cash 62,000
Accounts Receivables 11,250
Office Furniture 34,000
Office Equipment 94,500
Account Payable 61,500
Tria, Capital 150,000
Tria Withdrawal 10,000
Consulting Revenue 45,000
Salaries Expense 32,500
Rent Expense 7,500
Utilities Expense 4,750
=P256,500 =P256,500
 The Accounting Equation and the Double Entry System

Problem #20
Recording transactions in T- Accounts

Julieta Dillena established a proprietorship, The Professional Shoppers. The business charges
a fee based on the amount of research done to support a cost-effective purchase decision and
the actual shopping time required. Dillena with the help of her “professional shoppers” will shop
for almost anything from corporate giveaways, computer to office and home furnishings.

Business is particularly heavy around Christmas and in early summer. The business operates
from a rented office condominium unit. The shoppers receive a commission based on the
revenues they produced and a transportation allowance for the use of their personal vehicle for
shopping trips. The following transactions are the December 2020:

a. Dillena invested P300,000 in the business.

b. Acquired Office Equipment for P100,000. Dillena paid P20,000 in cash and promised to
pay the balance equally every end of the month.
c. Paid rent for December, P5,000
d. Provided shopping services for corporate accounts,P52,000
e. Paid telephone bill, P900
f. Borrowed cash from the bank by signing a note payable, P50,000
g. Bought a computer for office use, P48,000 cash.
h. Collected cash from clients for services performed on account, P40,000
i. Paid commissions to shoppers for revenues generated during the first haft of the month,
P18,200
j. Paid electricity bill, P6,000
k. Earned shopping revenues of P132,000; P60,000 cash, P72,000 on account.
l. Paid shoppers’ commissions for the last haft of the month, P46,200
m. Paid transportation allowance for the month, P15,000
n. Paid P10,000 on note payable on the bank.
o. Paid cash on account for the office equipment purchased in transaction (b), P20,000
p. Dillena withdrew P20,000 for personal use.

Required:

1. Record the transaction using T-Account. Use the accounting equation as a guide for a setting
up the T- Account. The following account will be needed: Cash; Accounts Receivable ; Office
Furniture; Office Equipment; Note Payable; Accounts Payable; Dillena, Capital; Dillena,
Withdrawals; Shopping Revenue; Commissions Expense; Transportation Expense; Rent
Expense and Utilities Expense.

2. Determine the balance of the T- Accounts.

The Accounting Equation and the Double Entry System

Cash
300,000 32,000
32,000 5,000
30,000 48,000
40,000 900
60,000 18,200
6,000
46,200
15,000
10,000
20,000
20,000
=P462,000 =P221,300
=P307,700
Accounts Receivables
52,000 40,000
72,000
=P124,000 =P40,000
=P84,000
Office Equipment
=P100,000
Office Furniture
=P48,000
Accounts Payable
20,000 80,000
=P60,000
Notes Payable
10,000 50,000
=P40,000
Dillena Capital
=P300,000
Rent Expense
=P5,000
Utilities Expense
900
6,000
=P6,900
Commission Expense
18,200
46,200
=P64,400
Shopping Revenue
52,000
40,000
132,000
=P224,000
Transportation Expense
The Accounting Equation and the Double Entry System
=P15,000

Dillena Withdrawal
=P20,000
 The Accounting Equation and the Double Entry System

Problem #21
Identification of Errors

On Sept. 1, 2020 Christopher Abelinde established Abelinde Delivery Services. During the
month, the entity had the following transactions:

a. Christopher Abelinde delivery invested P240,000 in the business (increase Cash;

increase Abelinde, Capital)
b. Bought two used delivery vans from The Van lot for P200,000 and paid P50,000 as a
down payment (increase delivery equipment, P200,000; decrease Cash, P50,000;
increase Accounts Payable, P150,000).
c. Received P25,000 in cash for delivery services (increase Cash; increase Delivery
Revenue).
d. Received bill from Bicol News for advertising, P3,500 (increase Advertising Expense;
decrease Cash).
e. Billed Naga Surgical Supply for delivery services provided, P6,200 (increase Account
Receivable; increase Delivery Revenue).
f. Received and paid telephone bill, P1,000 (decrease Cash; decrease Telephone expense).
g. Abelinde invested in his business office equipment having a fair market value of P9,600
(increase Office Equipment; decrease Cash).
h. Received and paid bill for gas and oil, P1,500 (decrease Cash; increase Maintenance
Expense ).
i. Paid P3,500 to Bicol News to pay account in full (increase Advertising Expense; increase
Cash).
j. Received P29,000 cash for delivery service performed (increase Cash; increase Delivery
Revenue).
k. Abelinde withdrew P11,000 for personal use (decrease Cash; Increase Salaries Expense).
l. Received P4,000 form Naga Surgical Supply to apply on account (increase Cash; Increase
Delivery Revenues).
m. Paid salaries to part time employees, P8,000 (increase Salaries Expense; Decrease Cash).

Required:

Find the six errors that were made in recording the transaction, and state how they should have
been recorded.
 The Accounting Equation and the Double Entry System
 Error – D. received bill from Bicol news for advertising, p3,500 (increase Advertising
Expense; decrease Cash)
Correct – (decrease Advertising Expense; increase Account Payable)
 Error – F. received and billed telephone bill, P1,000 (decrease Cash; decrease Telephone
Expense)
Correct – (decrease Cash; increase Telephone Expense)
 Error – G. Abelinde invested in his business office equipment having a fair market value
of P9,600 (increase Office Equipment; decrease Cash)
Correct – (increase Office Equipment; increase Abelinde Capital)
 Error – I. paid P3,500 to Bicol News tp pay account in full (increase Advertising Expense;
increase Cash)
Correct – (decrease Account Payable; decrease Cash)
 Error – K. Abelinde withdraw P11,000 for personal use. (decrease Cash; increase Salaries
Expense )
Correct – (decrease Cash; increase Abelinde Withdrawal)
 Error – L. received P4,000 from Naga Surgical Supply to Apply on account. (increase
Cash; increase Delivery Revenue)