Transaction analysis

Example
Chichay decided to open a computer
programming service which she
named Gigabyte
(1)

On 1 September, she invested P15 000 cash in the

business
Assets
= Liabilities +
Owners Equity
Chichay,
Cash
=
Capital
(1) +P15 000
=
+P15 000 Investment

Transaction analysis

continued

(2) Gigabyte purchased computer

equipment for P7000 cash
Assets

= Liabilities
+ Owners Equity
Chichay,
Cash
+
Equipment
=
Capital
Old balance P15 000
P15 000
(2)
-7 000
P7 000
New balance P 8 000 +
P7 000
=
P15 000
P15 000
P15 000

Transaction analysis

continued

(3) Gigabyte purchased P1600 supplies on

credit from Acme Supply Company
Assets

Liabilities

Owners

Equity
Accounts
Cash

Chichay,

+ Supplies + Equipment = Payable

+
Capital
Old bal.
P8 000
P7 000
P15 000
(3)
+P1 600
+P1 600
New bal. P8 000 +
P1 600 +
P7 000
=
P1 600
+
P15 000
3
P16 600
P16 600

Transaction analysis

continued

(4) Gigabyte received P1200 cash from

customers for services provided
Assets
Owners Equity

= Liabilities

Accounts
Chichay,
Cash + Supplies + Equipment = Payable +
Capital
Old bal. P8 000 P1 600
P7 000 P1 600
P15 000
(4)
+1 200
+1 200 Service Revenue
New bal. P9 200 + P1 600 + P7 000
= P1 600 +
P16 200
P17 800
P17 800

Transaction analysis

continued

(5) Gigabyte received a bill for P250 for

advertising and decides to pay later
Assets
Owners Equity

Liabilities

Accounts
Chichay,
Cash + Supplies + Equipment = Payable +
Capital
Old bal. P9 200 P1 600
P7 000 P1 600
P16 200
(5)
+ 250
- 250 Advertising Exp
New bal. P9 200 + P1 600 + P7 000
= P1 850 +
P15 950
P17 800
P17 800

Transaction analysis

continued

(6) Gigabyte provided P3500 of services

for customers of which P1500 is for cash
and the rest is on account
Assets
Owners Equity

= Liabilities

Accounts
Accounts
Chichay,
Cash + Receivable + Supplies + Equipment = Payable + Capital
Old bal. P 9 200
P1 600
P7 000
P1 850
P15 950
(6)
+1 500 +2 000
+3 500 Service Rev
New bal. P10 700 + P2 000 + P1 600 + P7 000
= P1 850 + P19 450
P21 300
P21 300

Transaction analysis

continued

(7) Paid cash for monthly expenses: Store

rent P600, Salaries P900, Utilities P200
Assets
Owners Equity

= Liabilities

Accounts
Accounts
Chichay,
Cash + Receivable + Supplies + Equipment = Payable + Capital
Old bal. P10 700
P2 000
P1 600
P7 000
P1 850
P19 450
(7)
-1 700
- 600 Rent Exp
- 900 Salaries Exp
- 200 Utilities Exp
New bal. P 9 000 + P2 000 + P1 600 + P7 000
= P1 850
+ P17 750
P19 600
P19 600

Transaction analysis

continued

(8) Gigabyte paid its P250 advertising bill in

cash This was previously recorded as an
Accounts Payable in (5)
Assets
Owners Equity

Liabilities

Accounts
Accounts
Chichay,
Cash + Receivable + Supplies + Equipment = Payable + Capital
Old bal. P 9 000 P2 000
P1 600
P7 000
P1 850
P17 750
(8)
- 250
- 250
New bal. P 8 750 + P2 000 + P1 600 + P7 000
= P1 600 + P17 750
P19 350
P19 350

Transaction analysis

continued

(9) Gigabyte receives P600 in cash from

customers who had been billed for
services
Assets in (6)
= Liabilities

Owners Equity
Accounts
Accounts
Chichay
Cash + Receivable + Supplies + Equipment = Payable + Capital
Old bal. P8 750 P2 000
P1 600
P7 000
P1 600
P17 750
(9)
+ 600
- 600
New bal. P 9 350 + P1 400 + P1 600 + P7 000
= P1 600 + P17 750
P19 350
P19 350

Transaction analysis

continued

(10) Chichay withdrew P1300 cash from

Gigabyte for her personal use
Assets
Owners Equity

= Liabilities +

Accounts
Accounts
Chichay,
Cash + Receivable + Supplies + Equipment = Payable + Capital
Old bal. P 9 350 P2 000
P1 600
P7 000
P1 600
P17 750
(10)
-1 300
-1 300 Drawings
New bal. P 8 050 + P1 400 + P1 600 + P7 000
= P1 600 + P16 450
P18 050
P18 050

10