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)

Subject:AccountingPrice:9.82 Bought3

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

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

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! :)

Related Questions