Activity 2 - Transaction Analysis (FLORES)

FLORES ANGELA D.
BSA ACT 201

PROBLEMS:
1.1 Juan Carlos is a Barber and on July 1 of the current year, Carlos Barber Shop had the
following statement of Financial Condition:
CARLOS BARBER SHOP

Statement of Financial Condition
July 1, 20CY
ASSETS
Cash P 25,000.00
Shop Supplies 23,500.00
Shop Fixtures 55,000.00
Shop Equipment 170,000.00
TOTAL ASSETS P 273,000.00
LIABILITIES
Accounts Payable P 25,000.00
OWNER’S EQUITY
Juan Carlos, Capital 248,500.00
TOTAL LAIBILITIES and OWNER’S EQUITY P 273,500.00
The following transactions were made during the month.
a. Purchased equipment on account, P11,500

b. Withdrew P6,000 for personal use
c. Paid P10,000 of the accounts payable.
d. Cash receipts for the month totaled P65,000 for services rendered
e. Expenses paid for the month totaled P24,000.
f. Shop supplies worth P4,500 was used during the month.
REQUIRED: Indicate the effects of the above transaction on the accounting equation shown
Below
ASSETS = LIABILITIES + OWNER’S EQUITY
Shop Shop Shop Accounts J. Carlos reve-
Cash Supplies Fixtures Eqpmnt. = Payable + Capital nues Expenses
Bal. 25,000 23,500 55,000 170,000 = 25,000 + 248,500
a. 11,500 = 11,500 +
Bal. 25,000 23,500 55,000 181,500 36,500 248,500
b. (6,000) = +. (6,000)
Bal. 19,000 242,500
c. (10,000) = (10,000) +
Bal. 9,000 26,500
d. 65,000 = + 65,000
Bal. 74,000
e. (24,000) = + (24,000)
Bal. 50,000
f. (4,500) = + (4,500)
Bal. 50,000 19,000 55,000 181,500 26,500 242,500 65,000 (28,500)
P 305,500 = P 305,500
1.2 Andrea Bonito has decided to go into business for herself as a professional photograph and the following
transactions transpired in October:
a. She invested P300,000 to open the AB Photo arts.

b. Paid rental for the month, P12,000
c. Purchased for cash camera equipment worth P220,000.
d. Bought photo and developing supplies worth P18,000 on account
e. Bought office equipment worth P45,000 on credit from Burroughs
Company.
f. Received P25,000 for Photography services rendered.
g. Andrea Bonita Invested a computer valued at P30,000, in the business
h. Andrea Bonita withdrew P12,000 from the business for her personal use.
i. Paid Borroughs Company P30,000 as partial payment of account.
j. Took wedding pictures and agreed to accept payment fifteen days later,
P12,000
k. Paid salary of assistant for the month, P6,000
l. Photo supplies used for the month, P4,000
REQUIRED:
1. Record the peso amount under the appreciate heading below to show the effect of
each transaction on the accounting equation and determine the balances after
every transaction. (See solution pattern below).
ASSETS = LIABILITIES + OWNER’S EQUITY

Accounts Photo Camera Accounts A. bonito
Cash Receivable Supplies Equipment = Payable + Capital + Revenues - Expenses
a. 300,000 300,000
bal. 300,000
b. (12,000) (12,000)
bal. 288,000
c. (220,000) 220,000
bal. 68,000
d. 18,000 18,000
bal. 68,000
e. 45,000 45,000
bal. 68,000 265,000 63,000
f. 25,000 25,000
bal. 93,000
g. 30,000 30,000
bal. 93,000 295,000 330,000
h. (12,000) (12,000)
bal. 81,000 318,000
i. (30,000) (30,000)
bal. 51,000 33,000
j. 12,000 12,000
bal. 37,000
k. (6,000) (6,000)
bal. 45,000 (18,000)
l. (4,000) (4,000)
bal. 45,000 12,000 14,000 295,000 33,000 318,000 37,000 (22,000)
P 366,000 = P 366,000
1.3 After determining the final balances of the accounts in Problem 1.2 above, prepare the
Following financial statements of AB Photo Arts for the moments of October of the
current year.
REQUIRED:
1. Statement of Comprehensive Income

2. Statement of Changes in Equity
3. Statement of Financial Condition
4. Statement of Cash Flows
1.)
AB PHOTO ARTS
Statement of Comprehensive Income
For the month ended October 31, 2019
Service Income P37,000
Less Operating Expenses:
Rental Expense P12,000
Salaries Expense 6,000
Supplies Expense 4,000 22,000
NET INCOME P15,000
2.)
AB PHOTO ARTS
Statement of Changes in Equity
Bonito, Capital October 1 P330,000
Add Net Income 15,000
Total 345,000
Less Drawings 12,000
Bonito, Capital, October 31 P333,000
3.)
AB PHOTO ARTS
Statement of Changes in Equity
October 31, 2019
Cash P45,000 Accounts Payable P33,000
Accounts Receivable 12,000 Bonito, Capital 333,000
Photo Supplies 14,000
Camera Equipment 295,000
Total P366,000 Total P366,000
4.)
AB PHOTO ARTS
Statement of Cash Flows
Cash flows from operating activities:
Cash received from cash service rendered 25,000
Cash period for payment of account 30,000
Cash paid for expenses (18,000)
Net cash paid by operating activities P23,000
Cash flows from investing activities:
Cash paid for purchase of PPE
Net cash used by investing activities (220,000)
Cash flow for financing activities:
Investment by Bonito 300,000
Withdrawal by Bonito (12,000)
Net cash provided by financing activities 288,000
Net Increase in cash 45,000
Cash Balance October 1 0
Cash Balance October 31 P45,000

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FLORES ANGELA D.

BSA ACT 201

CARLOS BARBER SHOP

The following transactions were made during the month.

a. Purchased equipment on account, P11,500

a. She invested P300,000 to open the AB Photo arts.

ASSETS = LIABILITIES + OWNER’S EQUITY

1. Statement of Comprehensive Income

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