Cabauatan Jericho PDF

Cabauatan, Jericho Allan L.
BSECE-5
1. a. State the expanded accounting equation.

Assets = Liabilities + (Beginning Owner’s Equity + Revenue–Expenses)
b. Explain the meaning of each term in the equation
• Assets – (economic resources) examples are cash, land, building, furniture

• Liabilities – (outsider claims) financial obligations to outsiders called the
• creditors.
• Owner’s Equity – (insiders claim) claims held by the owners of the business.
• This means that if the business has no liabilities then all the assets belongs
to the
• owner because assets = owner’s equity.
• Revenue – Income
• Expenses - The cost required for something; the money spent on
something.
2. On January 1, Orange Crates had assets of P30,000 and owner’s equity of
P20,000. During the year, the company had cash revenue or income of P10,000,
cash expenses of P8,000, paid 3,000 to its creditors, and its owner withdrew
P1,000. What are the assets, liabilities, and owner’s equity at the end of the
year?
Assets Liabilities Owner’s Equity
Cash ------------ Owner’s Revenue Expense
Equity
P30,000 P10,000 P20,000
P10,000 P10,000
-P8,000 -P8000
-P3,000 -P3,000
-P1,000 -P1000
=P28,000 =P7000 =P21000
3. Determine the value received and value parted with for the following
transactions:
a) Paid rent.
Value received – Place to stay
Value Parted With – Cash
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b) Rendered professional services for cash.
Value received – Cash
Value Parted With – Professional Services
c) Withdrew P100 for personal service.

Value received – Personal service
Value Parted With - P100
d) Paid the balance of P350 on a typewriter previously purchased on account.

Value received – typewriter
Value Parted With - P350
e) Purchased office supplies.

Value received – Office Supplies
Value Parted With - Cash
4. Raymond opened the Muscles Fitness Gym in August. The Following

transactions occurred during the first month of the business:
a) Raymond invested P100,000 in cash and 30,000 in gym equipment in the
business.
b) Paid P10,000 for the first month’s rent.
c) Purchased supplies costing P4,000 on credit.
d) Purchased exercise equipment costing P25,000 for 15,000 cash and the rest
on account.
e) Recorded income for the first half of the month of P6,500 in cash and P3,500
on account.
f) Paid P2,750 to a creditor on account.
g) Received payment from a customer on account for P1600.
h) Raymond withdrew P500 for a graduation gift.
i) Paid aerobics instructor her salary, P3,000.
j) Paid miscellaneous expense P1,500
k) Recorded income for the second half of the month of P5,600 in cash. Prepare
a new accounting equation every time a transaction occurs.
ASSETS LIABILITIES + CAPITAL
A 130,000 130,000
B 10,000 -10,000
C 4,000 4000 -
D 10,000 10000 -
E 10,000 10000
F 2750 2750 -
G - -
H 500 (-500)
I 3000 3000
J 1500 1500
K 5600 5600
END =141,850 =11,250 =130,600
5. In the design of an automobile engine part, an engineer has a choice of

either steel casting or an aluminum alloy casting. Either machine provides the
same service. However, the steel casting weighs 8 ounces, compared with 5
ounces for the aluminum casting. Every pound of extra weight in the automobile
has been assigned a penalty of $6 to account for increased fuel consumption
during the life cycle of the car. The steel casting costs $3.20 per pound, while the
aluminum allow can be cast for $7.40 per pound. Machining cost per casting
are $5.00 for steel and $4.20 for aluminum. Which material should the engineer
select, and what is the difference in unit costs? 1 pound = 16 ounce,
Steel Aluminum
$/pound 1 16ounce
$6*8ounce* 1pound =1pound
$12 1 16ounce
$6*5ounce* 1pound = 1pound
=$19.2
Casting $3.20
*(
pound
)=0.26666666667
$7.40
*(
pound
)=0.3854166667
1pound $12 1pound $19.2
Machining cost per $5/0.26666666667 $4.20/0.3854166667

casting
Total cost per casting $18.74999998 $10.89729729
Aluminum is the better choice because it’s cheaper.
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Cabauatan, Jericho Allan L.

1. a. State the expanded accounting equation.

• Assets – (economic resources) examples are cash, land, building, furniture

c) Withdrew P100 for personal service.

d) Paid the balance of P350 on a typewriter previously purchased on account.

e) Purchased office supplies.

4. Raymond opened the Muscles Fitness Gym in August. The Following

5. In the design of an automobile engine part, an engineer has a choice of

Machining cost per $5/0.26666666667 $4.20/0.3854166667

Total cost per casting $18.74999998 $10.89729729

Aluminum is the better choice because it’s cheaper.

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