Module 2

Lesson 1

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The liabilities of NEMCO equal one-third of the total assets, and the owner’s
equity is P240,000. What is the amount of liabilities?

EVALUATE

Name: _________________________________________ Time: _______________________

Instruction: Compute the missing amounts in letters for each case.

Case 1 Case 2 Case 3

Asset 500,000 D 600,000

Liabilities A 400,000 G

Capital Beginning 100,000 200,000 H

Revenue (Income) 600,000 500,000 400,000

Expenses 700,000 E I

Net Income B 100,000 300,000

Additional Investment C 50,000 100,000

Withdrawal 100,000 200,000 50,000

Capital Ending 350,000 F J

Answer:

A. _________________

B. _________________

C. _________________

D. _________________

E. _________________

F. _________________

G. _________________

H. _________________

I. _________________

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 J. _________________

Post-Assessment

Name: __________________________________________ Time: _____________________

I.
1. Describe the accounting information system
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2. Define the elements of financial statements

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3. Describe the account (the simple T-Account) and its uses

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4. What is double-entry system?

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5. What is the accounting equation?

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6. Define debits and credits

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7. Enumerate at least 10 accounts under the statement of financial
position/balance sheet and 10 accounts under the statement of
income/income statement.
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 Lesson 2
Financial Transaction Worksheet and Use of T-Accounts

EXTEND

Name: _______________________________________ Time: ________________________

Emerita Modesto established her own business called Modesto’s Self-storage.

The account leadings are presented below. Transactions completed
during the moth follow.

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

b. Bought office equipment on account from PHINMA Company, 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 Umerez 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 Company 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 transactions 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 totals at the bottom to show that one
side of the equations equals the other side.

ASSETS = LIABILITIES OWNER’S EQUITY

Accounts Prepaid Office Accounts Modesto,
Cash Receivable Insurance Equipment = Payable Capital Revenue Expenses
a 120,000 120,000
Bal. 120,000 0 0 0 0 120,000 0 0

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EVALUATE

Name: _________________________________________ Time: ______________________

Presented below is the balance sheet for the Leopoldo Medina Nursing Home:

Leopoldo Medina Nursing Home

Balance Sheet
Dec. 31, 2014

ASSETS

Current Assets
Cash P 16,000
Accounts Receivable 165,000
Supplies 21,000 P 202,000
Non-current Assets
Land 90,000
Nursing Home 350,000
Nursing Equipment 160,000 600,000
Total Assets P 802,000

LIABILITIES AND OWNER’S EQUITY

Liabilities
Accounts Payable 47,000
Notes Payable 350,000
Total Liabilities 397,000

Owner’s Equity
Medina, Capital 405,000
Total Liabilities and Owner’s Equity P 802,000

During the month of January 2015, the following transactions tool place:
Jan. 2 Acquired supplies on account, P17,500.
6 Collected P82,000 from patients for services provided in 2014.
10 Acquired nursing equipment on account, P35,000.
11 Billed patients P167,000 for nursing fees.
12 Paid P31,000 on accounts payable.
17 Paid nursing salaries, P24,000.
20 Paid utilities expense, P 9,000.
25 Medina withdrew P10,000 from the business.
27 Received a bill from the Ryan Morales Ad Company for P12,500 for
advertising expense incurred during the month.
31 Paid P15,000 of the notes payable.

Required: (1) Enter the Dec. 31, 2014 balances in a financial transaction
worksheet. (2) Record the transactions for the month of January 2010.
(3) Determine the balances of accounts using T-account.

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Post-Assessment

Name: ________________________________________ Time: ________________________

On Dec. 1, 2014, Ramil Sarabia opened a videotape rental store, Kalibo Video,
by investing P250,000 cash from his personal savings account. During the
month of December, the following transactions took place.

Dec. 1 Acquired supplies on account, P67,000.

4 Acquired videotape costing P235,000, on account.
5 Paid P85,000 to creditors.
8 Received P78,000 cash from ACA Video for rental fees.
11 Billed video city for video rentals, P105,000.
16 Paid salaries, P65,000.
17 Collected P77,000 from video city.
23 Sarabia withdrew P47,000 from the business.
24 Paid rent for the month, P41,500.
30 Paid utilities bill for the month, P17,500.

Required: Record the transactions for the month of December 2014 using a
financial transaction worksheet. Use the following accounts: Cash; Accounts
Receivable; Supplies; Videotape; Accounts Payable; and Sarabia, Capital.

Determine the balances of the T-account.