The following are the transactions that transpired on October 2022: 1 Oct. 1 Oct. 1 Oct. 1 Oct. 2 Oct. 2 Oct 3 Oct. 5 Oct. 6 Oct. 7 Oct. 8 Oct. 9 Oct. 10 Oct. 10 Oct. 11 Oct 13 Oct. 13 Oct. 15 Oct. 15 Oct. 16 Oct. 17 Oct. 18 Oct. 18 Oct. 20 Oct. 21 Oct. 22 Oct. 23 Oct. 24 Oct 25 Oct. 28 Oct. 28 Oct. 29 Oct. 30 Oct. Ganda Angel invested P500,000 to put up the merchandising business Pretty Purchased office tables and chairs from TIBAY Furniture at P36,650, Cash Angel basis. Paid taxes and license renewals to the city government, P8,500.75 Purchased computers from the Office Hardware at P35,800 with terms: n/EOM Paid three months rent in advance to the Leasing Corp. at P18,600. Purchased goods from Ups and Downs at P32,750 with terms: 3/10, n/60 Cash purchases, P8,500 Paid insurance expense for six months, P7,500. Sold merchandise to Blue Corp., P54,750. Terms: 50% downpayment and the balance payable within 60 days. Paid freight on the above sales, P859.45. Received from Labrador Trading a 60-day, 6% note for merchandise sold at P12,500. Sold merchandise to Bago Trading, P75,000 with terms 2/10, n/60 Bago trading returned defective goods, P12,350. Borrowed money from Lucky Bank, P20,000 and paid advance interest in the amount of P1,200. Sold goods to Ram Trading at P85,650 with terms 2/10, n/60 Issued a 30-day note to Care Enterprise amounting to P10,000 for merchandise purchased. Bago Trading returned defective goods, P15,000. Paid the following expenses: Electric bill Telephone bill Rent Advertising Bago Trading made a partial payment of P25,000 Ram Trading returned defective goods, P6,000 Paid the note issued on 13 Oct. Bago Trading paid its account in full; refer to transactions on 9, 10,13, and 15 Oct. Issued a 30-day note to Eusebio Enterprise for merchandise purchased at DIE P15.250. Angel withdrew P20,000 for her personal use. Paid note issued on 18 Oct. Cash sales amounting to P48,500 Purchased from Sim Trading with list price of P35,000 (terms: 2/10,n/30 with trade discount of 5%) Paid freight on the above purchases, P4,200 Returned defective chairs to TIBAY furniture and received a refund of P4,250. Gave a cash refund for defective merchandise returned by customers, P5,000 Made partial payment to Sim Trading, P12,000 Returned defective goods to Sim Trading and received a credit memo for P6,500 Paid the following expenses: Salaries Prepaid Insurance Furniture and Fixtures Office Equipment Accounts Payable P3,500 3,000 6,300 7,450 Subscription and Publications Commission Office Supplies ACCOUNT TITLES TO BE USED: Cash Sales Discount Notes Receivable Accounts Receivable Prepaid Rent Notes Payable Loan Payable Ganda Angel, Capital Ganda Angel, Drawing Sales Returns and Allowances Sales P22,000 550 2,500 2,400 Purchases Freight-in Purchase Returns and Allowances Purchase Discount Salaries Expense Freight-out Advertising Expense Rent Expense Subscription and Publications Expense Commission Expense Office Supplies Expense Taxes and Licenses Expense Interest Income Interest Expense Utilities Expense
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![SY 2022-2023
The following are the transactions that transpired on October 2022:
1 Oct.
1 Oct.
1 Oct.
1 Oct.
2 Oct.
2
Oct.
3 Oct.
5 Oct.
6 Oct.
7 Oct.
8 Oct.
9 Oct.
10 Oct.
10 Oct.
11 Oct.
13 Oct.
13 Oct.
15 Oct.
15 Oct.
16 Oct.
17 Oct.
18 Oct.
18 Oct.
20 Oct.
21 Oct.
22 Oct.
23 Oct.
24 Oct.
25 Oct.
28 Oct.
28 Oct.
29 Oct.
30 Oct.
Ganda Angel invested P500,000 to put up the merchandising business Pretty
Purchased office tables and chairs from TIBAY Furniture at P36,650, Cash
Angel.
basis.
Paid taxes and license renewals to the city government, P8,500.75
Purchased computers from the Office Hardware at P35,800 with terms: n/EOM
Paid three months rent in advance to the Leasing Corp. at P18,600.
Purchased goods from Ups and Downs at P32,750 with terms: 3/10, n/60
Cash purchases, P8,500
Paid insurance expense for six months, P7,500.
Sold merchandise to Blue Corp., P54,750. Terms: 50% downpayment and the
balance payable within 60 days.
Paid freight on the above sales, P859.45.
Received from Labrador Trading a 60-day, 6% note for merchandise sold at
P12,500.
Sold merchandise to Bago Trading, P75,000 with terms 2/10, n/60
Bago trading returned defective goods, P12,350.
Borrowed money from Lucky Bank, P20,000 and paid advance interest in the
amount of P1,200.
Sold goods to Ram Trading at P85,650 with terms 2/10, n/60
Issued a 30-day note to Care Enterprise amounting to P10,000 for
merchandise purchased.
Bago Trading returned defective goods, P15,000.
Paid the following expenses:
Electric bill
Telephone bill
Rent
Advertising
Bago Trading made a partial payment of P25,000
Ram Trading returned defective goods, P6,000
Paid the note issued on 13 Oct.
Bago Trading paid its account in full; refer to transactions on 9, 10,13, and 15
Oct.
Tec
Issued a 30-day note to Eusebio Enterprise for merchandise purchased at
P15,250.
Angel withdrew P20,000 for her personal use.
Paid note issued on 18 Oct.
Cash sales amounting to P48,500
Purchased from Sim Trading with list price of P35,000 (terms: 2/10,n/30 with
trade discount of 5%)
Paid freight on the above purchases, P4,200
Returned defective chairs to TIBAY furniture and received a refund of P4,250.
Gave a cash refund for defective merchandise returned by customers, P5,000
Made partial payment to Sim Trading, P12,000
Returned defective goods to Sim Trading and received a credit memo for
P6,500
Paid the following expenses:
Salaries
P3,500
3,000
6,300
7,450
Accounts Receivable
Prepaid Rent
Prepaid Insurance
Furniture and Fixtures
Office Equipment
Accounts Payable
Subscription and Publications
Commission
Office Supplies
ACCOUNT TITLES TO BE USED:
Cash
Sales Discount
Notes Receivable
Notes Payable
Loan Payable
Ganda Angel, Capital
Ganda Angel, Drawing
Sales Returns and Allowances
Sales
P22,000
550
2,500
2,400
Purchases
Freight-in
Purchase Returns and Allowances
Purchase Discount
Salaries Expense
Freight-out
Advertising Expense
Rent Expense
Subscription and Publications Expense
Commission Expense
Office Supplies Expense
Taxes and Licenses Expense
Interest Income
Interest Expense
Utilities Expense](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6771f9dc-b399-4174-a41a-d513a8b32c16%2Ffe90922c-d2ea-4f6a-806a-983e8cf498aa%2Fpkc476_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 4 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337552127/9781337552127_smallCoverImage.gif)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337552127/9781337552127_smallCoverImage.gif)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)