Transaction Analysis for a Service Entity

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TRANSACTIONTRANSACTIONANALYSIS FOR AANALYSIS FOR A

SERVICE ENTITYSERVICE ENTITYCHAPTER 2CHAPTER 2


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Transaction analysis usingTransaction analysis using

the accounting euationthe accounting euation

The !ollo"ing are the selecte#The !ollo"ing are the selecte#

transaction o! a laun#ry sho$transaction o! a laun#ry sho$

#uring its !irst %onth o!#uring its !irst %onth o!

o$erationso$erations


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Transaction &' cashTransaction &' cash

in(est%ent )y o"nerin(est%ent )y o"ner

Tessie Ra%os #eci#es to o$en aTessie Ra%os #eci#es to o$en a

laun#ry sho$ registere# aslaun#ry sho$ registere# as

Tessie Laun#ry Sho$ on *uly &+Tessie Laun#ry Sho$ on *uly &+

2,&&-2,&&-

She in(este# P.,,+,,, cashShe in(este# P.,,+,,, cash


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Transaction 2' Purchase o!Transaction 2' Purchase o!

eui$%ent "ith #o"n $ay%ent/eui$%ent "ith #o"n $ay%ent/

)alance on account)alance on account On *uly 2+ 2,&&+ she )oughtOn *uly 2+ 2,&&+ she )ought

"ashers an# #ryers !or"ashers an# #ryers !or

P0,+,,,/ $aying P1,+,,, asP0,+,,,/ $aying P1,+,,, as

#o"n $ay%ent an# the )alance#o"n $ay%ent an# the )alance

$aya)le in 1 #ays-$aya)le in 1 #ays-


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Transaction .' $ay%ent o!Transaction .' $ay%ent o!

%onthly rental%onthly rental

On *uly .+ 2,&&+ $ai# the *ulyOn *uly .+ 2,&&+ $ai# the *uly

rental !or P1+,,,-rental !or P1+,,,-


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Transaction ' recei(e# a )illTransaction ' recei(e# a )ill

!or ra#io a#(ertise%ent!or ra#io a#(ertise%ent

On *uly .+ 2,&&+ recei(e# a )illOn *uly .+ 2,&&+ recei(e# a )ill

!ro% ra#io )eretas !or!ro% ra#io )eretas !or

a#(ertising the o$ening o!a#(ertising the o$ening o!

Tessie Laun#ry Sho$+ P2+,,,-Tessie Laun#ry Sho$+ P2+,,,-


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Transaction 1' $ai# the annual !ireTransaction 1' $ai# the annual !ire

insurance $re%iu% in a#(anceinsurance $re%iu% in a#(ance

On *uly + 2,&&+ $ai# one3yearOn *uly + 2,&&+ $ai# one3year

insurance $olicy e!!ecti(e *uly &+insurance $olicy e!!ecti(e *uly &+

P2+,,-P2+,,-


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Transaction 4' $urchase#Transaction 4' $urchase#

laun#ry su$$lies on accountlaun#ry su$$lies on account

On *uly 1+ 2,&&+ $urchase#On *uly 1+ 2,&&+ $urchase#

laun#ry su$$lies on account+laun#ry su$$lies on account+

P+2,,-P+2,,-


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Transaction 5' $urchase#Transaction 5' $urchase#

laun#ry su$$lies !or cashlaun#ry su$$lies !or cash

On *uly 5+ 2,&&+ $urchase#On *uly 5+ 2,&&+ $urchase#

laun#ry su$$lies !or cash+laun#ry su$$lies !or cash+

P+,,,-P+,,,-


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Transaction 0' $ay%ent o!Transaction 0' $ay%ent o!

salariessalaries

On *uly &1+ 2,&&+ $ai# t"o "ee6sOn *uly &1+ 2,&&+ $ai# t"o "ee6s

salaries o! e%$loyees+ P5+,,,salaries o! e%$loyees+ P5+,,,


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Transaction 7' ren#ere# laun#ryTransaction 7' ren#ere# laun#ry

ser(ices "ith #o"n $ay%entser(ices "ith #o"n $ay%ent

On *uly &4+ 2,&&+ laun#ry ser(icesOn *uly &4+ 2,&&+ laun#ry ser(ices

$ro(i#e# to custo%ers$ro(i#e# to custo%ers

a%ounte# to P2&+,,,- Cash o!a%ounte# to P2&+,,,- Cash o!

P&1+,,, is recei(e# an# theP&1+,,, is recei(e# an# the

)alance o! P4+,,, is )ille# on)alance o! P4+,,, is )ille# on

account-account-


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Transaction &,' $artialTransaction &,' $artial

$ay%ent o! accounts$ay%ent o! accounts

On *uly 2,+ 2,&&+ $artial $ay%entOn *uly 2,+ 2,&&+ $artial $ay%ent

!or the *uly 1 $urchase o!!or the *uly 1 $urchase o!

laun#ry su$$lies+ P.+,,,laun#ry su$$lies+ P.+,,,


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Transaction &&' recei(e# cash inTransaction &&' recei(e# cash in

a#(ance !or laun#ry ser(ices nota#(ance !or laun#ry ser(ices not

yet ren#ere#yet ren#ere#On *uly 2&+ 2,&&+ cash a#(anceOn *uly 2&+ 2,&&+ cash a#(ance

a%ounting to P.+,,, is recei(e#a%ounting to P.+,,, is recei(e#

!ro% custo%er *oil Pension!ro% custo%er *oil Pension

House+ the laun#ry ser(ices areHouse+ the laun#ry ser(ices are

e8$ecte# to )e $ro(i#e# )y thee8$ecte# to )e $ro(i#e# )y the

en# o! *ulyen# o! *uly


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Transaction &2' $ay%ent o!Transaction &2' $ay%ent o!

electricityelectricity

On *uly 20+ 2,&&+ $ai# electric )illOn *uly 20+ 2,&&+ $ai# electric )ill

!or P.+1,,!or P.+1,,


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Transaction &.' "ith#ra"nTransaction &.' "ith#ra"n

cash !or $ersonal usecash !or $ersonal use

On *uly 27+ 2,&&+ Tessie Ra%osOn *uly 27+ 2,&&+ Tessie Ra%os

"ith#ra"s P.+,,, !or $ersonal"ith#ra"s P.+,,, !or $ersonal

use-use-


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Transaction &' ren#ere#Transaction &' ren#ere#

laun#ry ser(ices !or cashlaun#ry ser(ices !or cash

On *uly .,+ 2,&&+ ren#ere#On *uly .,+ 2,&&+ ren#ere#

laun#ry ser(ices !or cashlaun#ry ser(ices !or cash

P25+,,,P25+,,,


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tele$hone an# "ater )illtele$hone an# "ater )ill

On *uly .,+ 2,&&+ recei(e# an#On *uly .,+ 2,&&+ recei(e# an#

$ai# tele$hone an# "ater )ill !or$ai# tele$hone an# "ater )ill !or

P5,, an# P1,, res$ecti(elyP5,, an# P1,, res$ecti(ely


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salaries at %onth3en#salaries at %onth3en#

On *uly 27+ 2,&&+ $ai# salaries o!On *uly 27+ 2,&&+ $ai# salaries o!

e%$loyees !or P 5+,,,- there ise%$loyees !or P 5+,,,- there is

un$ai# salaries o! P&+,,,un$ai# salaries o! P&+,,,


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Pre$aration o! !inancialPre$aration o! !inancial

state%entsstate%ents

State%ent o! !inancialState%ent o! !inancial

$er!or%ance or Inco%e$er!or%ance or Inco%e

state%entstate%ent

State%ent o! changes in euityState%ent o! changes in euity

State%ent o! !inancial $ositionState%ent o! !inancial $osition

or )alance sheetor )alance sheet

Cash !lo" state%entCash !lo" state%ent


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9sing the accounting euation+9sing the accounting euation+

ans"er each o! the !ollo"ingans"er each o! the !ollo"ing

uestions'uestions'


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&- The lia)ilities o! Ace :i!t Sho$&- The lia)ilities o! Ace :i!t Sho$

are P.,,+,,, an# the O"ner;are P.,,+,,, an# the O"ner;

euity is P12,+,,,-


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The total assets o! ThreeThe total assets o! Three

Angels; Ca!> are P.2,+,,, an#Angels; Ca!> are P.2,+,,, an#

its o"ner;s euity is P4+,,,-its o"ner;s euity is P4+,,,-

"hat is the a%ount o! its total"hat is the a%ount o! its total

lia)ilities=lia)ilities=


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The total assets o! 9no Tra#ingThe total assets o! 9no Tra#ing

are P4&,+,,, an# its lia)ilitiesare P4&,+,,, an# its lia)ilities

are eual to ? o! total assets-are eual to ? o! total assets-

Ho" %uch is the o"ner;sHo" %uch is the o"ner;s

euity=euity=


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The lia)ilities o! S6y Tra(elThe lia)ilities o! S6y Tra(el

Agency are P2,+,,, an#Agency are P2,+,,, an#

o"ner;s euity is P&0,+,,,-o"ner;s euity is P&0,+,,,-

"hat is the a%ount o! total"hat is the a%ount o! total

assets=assets=


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The total assets o! ElginThe total assets o! Elgin

Truc6ers are P2+&,,+,,, an# itsTruc6ers are P2+&,,+,,, an# its

o"ner;s euity is P&+1,,+,,,-o"ner;s euity is P&+1,,+,,,-

"hat is the a%ount o! total"hat is the a%ount o! total

lia)ilities=lia)ilities=


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In the colu%ns )elo" in#icateIn the colu%ns )elo" in#icate

"hether the transactions"hether the transactions

increase# @B+ #ecrease# @3B+ orincrease# @B+ #ecrease# @3B+ or

ha# no e!!ect @neB on assets-ha# no e!!ect @neB on assets-

Lia)ilities an# o"ner;s euityLia)ilities an# o"ner;s euity


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Purchase# su$$lies on accountPurchase# su$$lies on account

ille# custo%ers !or ser(icesille# custo%ers !or ser(ices

ren#ere#ren#ere#

Collections o! accounts recei(a)leCollections o! accounts recei(a)le Recei(e# a )ill !ro% s6yca)leRecei(e# a )ill !ro% s6yca)le

Pro$rietor;s cash "ith#ra"alPro$rietor;s cash "ith#ra"al

Purchase o! eui$%ent on accountPurchase o! eui$%ent on account Pay%ent o! salariesPay%ent o! salaries


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Pay%ent o! cre#itorsPay%ent o! cre#itors

Incurre# a#(ertising e8$ense onIncurre# a#(ertising e8$ense on

accountaccount

Recei(e# a )ill !ro% :lo)eRecei(e# a )ill !ro% :lo)e

Teleco%Teleco%


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Transaction'Transaction'

Recor# the transaction as theyRecor# the transaction as they

ta6e $laceta6e $lace

Transactions "ill result in anTransactions "ill result in an

#ecrease or #ecrease in one or#ecrease or #ecrease in one or

%ore o! assets+ lia)ilities an#%ore o! assets+ lia)ilities an#

euity accountseuity accounts


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Account'Account'

9se# to grou$ an# su%%ariDe9se# to grou$ an# su%%ariDe

the changes cause# )ythe changes cause# )y

transactiontransaction

Is a recor# in the general le#gerIs a recor# in the general le#ger

to collect #e)it an# cre#itto collect #e)it an# cre#it

a%ountsa%ounts


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T3ACCO9NT'T3ACCO9NT'

Si%$li!ie# !or%at o! an accountSi%$li!ie# !or%at o! an account

It has . $artsIt has . $arts

Nor%al )alance o! an account isNor%al )alance o! an account ison the si#e "here an increase inon the si#e "here an increase in

the account is recor#e#the account is recor#e#


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O9LE3ENTRYO9LE3ENTRY

ACCO9NTIN: SYSTEACCO9NTIN: SYSTE

Transaction is recor#e# "ith atTransaction is recor#e# "ith at

least & #e)it an# & cre#itleast & #e)it an# & cre#it

e)it an# cre#it %ust )e euale)it an# cre#it %ust )e eual


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Rules o! #e)it an# cre#it an#Rules o! #e)it an# cre#it an#

nor%al )alancesnor%al )alances

e)ite)it Cre#itCre#it NN

AA 33 #r#r

LL 33 crcrEE 33 crcr

33 #r#r

RR 33 crcrEE 33 #r#r


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AnalyDe the transaction )yAnalyDe the transaction )y

entering the account in theentering the account in the

a$$ro$riate #e)it or cre#ita$$ro$riate #e)it or cre#it

colu%ncolu%n a6e a T3ACCO9NTa6e a T3ACCO9NT

COP9TE THE ACCO9NTCOP9TE THE ACCO9NT

ALANCESALANCES


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Transaction Analysis for a Service Entity

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