question archive Integrating Problem (5 points, 5 points with correct formatting of journal entries)
Integrating Problem (5 points, 5 points with correct formatting of journal entries)
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Integrating Problem (5 points, 5 points with correct formatting of journal entries).
1. What is the total Debit/Credit of the transaction?
Cesar, a sole proprietor, started a business. During January 2022, the first month of operations, the following transactions occurred:
January
a. 1- Invested cash in the business, P100,000.
b. 2- Bought various office supplies for cash, P20,000.
C. 3- Loaned P50,000 from a bank for additional funds.
d. 3- Hired a worker to assist him in the business for a salary of P5,000 per month.
e. 10- Bought office furniture on account, P30,000.
f. 10- Bought an equipment worth P60,000. The company made 60% cash down payment and the balance on open account.
g 15- Invested additional cash in the business, P5,000.
h. 15- Bought another equipment worth P80,000. The company made 50% cash down payment and issued a promissory note for the balance.
i. 18- Withdrew P2,000 for personal use.
j. 20 - Paid P10,000 of the amount due in transaction (e).
k. 25 - Settled the promissory note in transaction (h) using the owner's own cash.
Your answer with solution please
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The total of each column for debit and credit is 397,000.
| Date | Particulars | Debit | Credit |
| 01-Jan |
Cash Cesar, Capital |
100,000 |
100,000 |
| 02-Jan |
Office supplies Cash |
20,000 |
20,000 |
| 03-Jan |
Cash Loans payable |
50,000 |
50,000 |
| 03-Jan | No entry required. | ||
| 10-Jan |
Office furniture Accounts payable |
30,000 |
30,000 |
| 10-Jan |
Office equipment Cash Accounts payable |
60,000 |
36,000 24,000 |
| 15-Jan |
Cash Cesar, Capital |
5,000 |
5,000 |
| 15-Jan |
Office equipment Cash Notes payable |
80,000 |
40,000 40,000 |
| 18-Jan |
Cesar, Withdrawals Cash |
2,000 |
2,000 |
| 20-Jan |
Accounts payable Cash |
10,000 |
10,000 |
| 25-Jan |
Notes payable Accounts payable |
40,000 |
40,000 |
| Total | 397,000 | 397,000 | |
For further explanations, please refer below.
Step-by-step explanation
From the journal entries above, the following are emphasized since it may be the confusing part of the transactions listed:
- Transaction D. No entry to be made because mere hiring of employee does not trigger a journal entry. The accrual or actual payment of salaries expense will trigger the need for a journal entry.
- Transaction K. The business is a different entity from the owner, therefore the settlement of promissory note in Transaction H using owner's own cash creates a payable from the business to the owner.
Throughout the accounting process, the accounting equation Assets = Liabilities + Equity must be followed with the debits and credits tallying. Hope this helps. Thanks! :)
