Reference no: EM132940965
Question - Analyze the transactions and prove the accounting equation.
March Transaction
01 Kenneth Smith opened a tour and travel service by contributing cash of P50,000. He has three cars worth P1,200,000 but contributed only two cars worth P750,000.
03 Smith borrowed P100,000 cash from PNB for use in his business.
07 Bought tables and chairs from Blim's and paid cash, P45,000.
15 Various equipment were purchased on account from National Winners for P55,000.
18 Smith made cash withdrawal of P5,000 for personal use.
20 The account due to National Winners was paid in cash.
21 A tourist hired the services of the agency for a tour in Baguio. Cash of P15,000 was received from the tourist.
22 Cash was paid for the following: gas and oil, P500 and repair of car, P1,000.
24 Mr. Gray hired the services of the agency for his visitors and promised to pay P16,000 on March 31
25 Paid telephone bill for P500.
27 This day, the Faculty Club of Angelicum Academy hired the services of the agency for a tour in Manila. A bill was issued to them for P20,000, 50% of which was collected the same.
30 Mr. Gray paid one half of his account in cash
31 Paid for rental of office space, P10,000 and Salaries of employees and workers P9,000.
April Transactions
To continue with the Smith Tour & Travel Business, the following transactions took place for the month of April. Bring forward the ending balances from the previous month and analyze the effects of the transactions on the accounting equation. make also the four financial statements.
Apr 3 Received P15,000 cash form clients for various trips around the country
Apr 8 Mr. Gray paid the balance of his account in full.
Apr 16 Bills received and paid P8,000: utility, P3,000; gas and oil, P2,000; Repair of cars P3,000
Apr18 Paid P20,000 cash on the loan payable
Apr 20 Billed SMB Cooperative for a trip to Tagaytay, P7,500.
Apr 25 Collected P5,000 from the Faculty Club of Angelicum.
Apr 27 Received the PLDT bill for April, P750.
Apr 29 Paid for rent, P10,000 and salaries, P9,000.
Apr 30 Smith made another cash withdrawal of P5,000 for payment of a personal Liability.