Q1. Explain what will happen to the accounting equation if equipment were purchased for P50,000 and on account?
Q2. Explain what will happen to the accounting equation if the first out of ten installments of the bank loan was paid in cash for P44,000?
Q3. Explain what will happen to the accounting equation if the owner made a cash withdrawal of P5,000.
Q4. A list of transactions appears below. Indicate which accounting elements of the business are affected by placing in the respective columns the amount and the + (increase) or - (decrease) sign or NA, if the element is not affected. Ariel is the owner-manager of Domino Pizza. Unless otherwise atated, the transactions are all for the business.
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Transactions
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Assets
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Liabilities
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Owner's Equity
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a) Ariel receiver a retirement pay of P1,000,000 cash and invested half of this top put up his business.
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b) From the remaining pension of P500,000, he got a car for his own use, P750,000 and issued a note for the balance.
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c) He hired a cook, a cashier and a server for a monthly salary of P5,000 each worker.
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d) He bought cooking equipment and paid P350,000.
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e) He bought office equipment from Da Best for P125,000 on credit.
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f) He paid half of the account due to Da Best.
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g) He took home P5,000 cash for his own use.
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