Name: __________________________________________________________ Date: ___________

Course&Year: ______________________

I.

A. Total assets of ABC Company equal to 500,000 and its equity is P160,000. What is the amount of its
liabilities?
SOLUTION:

B. Total assets of XYZ Company equal to P600,000 and its liabilities and equity amounts are equal. What
is the amount of its liabilities? What is the amount of its equity?
SOLUTION:

C . Use the accounting equation to compute the missing financial statement amounts (a),(b), and (c).

Company Assets = Liabilities + Equity

A P450,000 P(a)____ P300,000
B P(b)____ P250,000 P750,000
C P860,000 P320,000 P(c)____
SOLUTION:

D. If the total liability is 1/3 of the total assets and total equity stood at P650,000. What is the amount of
total assets?
SOLUTION:

E. The company earned total service revenues in 2008 of P450,000 and incurred total expenses equal to
¼ of the total service revenues. The owner made initial investment of P1,000,000 and made additional
investment of P250,000. During the year, the owner withdrew cash amounting to P100,000. The total
assets of the company at the end of the year amount of P2,000,000. What is the amount of total
liabilities?
SOLUTION:
II.

Direction: Given the following accounts, identify whether it is an asset, liability or equity accounts.
Write A if it is an asset account, L if it is a liability account and E if it is an equity account before the item
number.

__________ 1. Account Payable

__________ 2. Cash and Cash equivalents

__________ 3. Accrued Expenses

__________ 4. Prepaid Expenses

__________ 5. Notes Payable

__________ 6. Withdrawals

__________ 7. Office Equipment

__________ 8. Marketable Securities

__________ 9. Bank Loan Payable

__________ 10. Accounts Receivable

__________ 11. Notes Receivable

__________ 12. Deferred Revenue

__________ 13. Land

__________ 14. Office Building

__________ 15. Unused Office Supplies

__________ 16. Interest Receivable

__________ 17. A, Capital

__________ 18. Goodwill

__________ 19. Franchise

__________ 20. Office Furniture

III.

I. Owner invested land and building worth P3,000,000.00 and P1,500,000.00 respectively.

Transactions

January 1, 2020 – Owner made an initial Investment of P1,000,000.

January 2, 2020 – Purchased office supplies in cash for P55,000.

January 3, 2020 – Acquired office equipment on credit for P110,000.

January 4, 2020 – Paid business & operating expenses of P66,000.

January 5, 2020 – Paid office equipment purchased last January 3, 2020.

January 6, 2020 – Rendered services on account worth P225,000.

January 7, 2020 – Sold goods in cash for P176,000.

January 8, 2020 – Collected 1/3 of the services rendered last January 6, 2020.

January 9, 2020 – Owner withdrew P25,000.

January 10, 2020 – Sold goods on cash worth P110,000 with 5% discount.

January 11, 2020 – Owner sent his machinery to be used in the business worth P1,100,000.

January 12, 2020 – Purchased materials on cash worth P175,000 with 12% discount.

January 13, 2020 – Made additional purchases on account worth P70,000.

January 14, 2020 – Returned defective materials to the supplier valued 1/7 of the total material cost
(purchases was made last January 13)

January 15, 2020 – Paid 1/2 of the employee’s salary for the cut off.

January 16, 2020 – Allotted budget for the employees 13th month pay for the month of January (monthly
employee salary is P240,000)

January 17, 2020 – Paid maintenance P10,000

Rent P22,000

Electric and Water P9,000

Tel & Internet P4,500

January 18, 2020 – Allotted depreciation to the machineries which has P100,000 salvage value/ 10 years
life expectancy.

January 19, 2020 – A customer issued pay to cash for the services to be rendered for one year (jan-dec)
worth P120,000.

January 20, 2020 – Received P1,200,000 for a loan applied to the bank with 7% interest rate per month
(loan payable rent for 24 months)

January 21, 2020 – Received payment for the unused warehouse of the company worth P47,000.

January 22, 2020 – Issued 1st month payment for the loan in Bank including a quarter of interest
expense.

January 23, 2020 – Deposited P250,000 in the bank.

January 24, 2020 – Sold goods in cash worth P1,225,000 inclusive of 10% discount.

January 25, 2020 – Paid P90,000 for employees trainings & seminars abroad.

January 26, 2020 – Issued payment for the cleaning company for their whole 1 year of service worth
P120,000.

January 27, 2020 – Paid P70,000 for company’s insurance.

January 28, 2020 – Purchased additional materials worth P90,000 exclusive of 10% discount.

January 29, 2020 – Paid another half of employee’s salary.

January 30, 2020 – Owner returned his withdrawal last January 9, 2020.