https://file.aiquickdraw.com/mathbot/file/1725889876976pot2zn6i.jpg

To analyze the transactions using the accounting equation, we'll consider the formula:

\[
\text{Assets} = \text{Liabilities} + \text{Owner's Equity}
\]

### Let's break down the transactions one by one:

1. **Transaction (a):** The owner invested P 15,000 cash into the business.
   - **Effect on Accounting Equation:**
     - **Assets (Cash)** increase by P 15,000.
     - **Owner’s Equity** increases by P 15,000.

   \[
   \text{Assets} = \text{Liabilities} + \text{Owner’s Equity}
   \]
   \[
   +15,000 = 0 + +15,000
   \]

2. **Transaction (b):** Purchased office supplies by cash P 500.
   - **Effect on Accounting Equation:**
     - **Assets (Office Supplies)** increase by P 500.
     - **Assets (Cash)** decrease by P 500 (since it was paid in cash).

   \[
   \text{Assets} = \text{Liabilities} + \text{Owner’s Equity}
   \]
   \[
   (+500, -500) = 0 + 0
   \]

3. **Transaction (c):** Purchased office furniture by cash P 8,000.
   - **Effect on Accounting Equation:**
     - **Assets (Office Furniture)** increase by P 8,000.
     - **Assets (Cash)** decrease by P 8,000.

   \[
   \text{Assets} = \text{Liabilities} + \text{Owner’s Equity}
   \]
   \[
   (+8,000, -8,000) = 0 + 0
   \]

4. **Transaction (d):** Made a sale of P 1,000 on credit (to be collected later).
   - **Effect on Accounting Equation:**
     - **Assets (Accounts Receivable)** increase by P 1,000.
     - **Owner’s Equity (Revenue)** increases by P 1,000.

   \[
   \text{Assets} = \text{Liabilities} + \text{Owner’s Equity}
   \]
   \[
   +1,000 = 0 + +1,000
   \]

5. **Transaction (e):** Purchased office supplies P 400 on account.
   - **Effect on Accounting Equation:**
     - **Assets (Office Supplies)** increase by P 400.
     - **Liabilities (Accounts Payable)** increase by P 400.

   \[
   \text{Assets} = \text{Liabilities} + \text{Owner’s Equity}
   \]
   \[
   +400 = +400 + 0
   \]

6. **Transaction (f):** Paid P 250 cash in respect of office supplies purchased in (e).
   - **Effect on Accounting Equation:**
     - **Assets (Cash)** decrease by P 250.
     - **Liabilities (Accounts Payable)** decrease by P 250.

   \[
   \text{Assets} = \text{Liabilities} + \text{Owner’s Equity}
   \]
   \[
   -250 = -250 + 0
   \]

7. **Transaction (g):** Received P 700 cash for the credit sale in (d).
   - **Effect on Accounting Equation:**
     - **Assets (Cash)** increase by P 700.
     - **Assets (Accounts Receivable)** decrease by P 700.

   \[
   \text{Assets} = \text{Liabilities} + \text{Owner’s Equity}
   \]
   \[
   (+700, -700) = 0 + 0
   \]

---

Would you like more details on any of these transactions, or have further questions?

### Related Questions:
1. What happens if we receive more cash for a credit sale than the amount initially recorded?
2. How does paying liabilities affect both sides of the accounting equation?
3. Why is it important to distinguish between cash and credit sales?
4. How do multiple transactions affect the owner's equity over time?
5. What are other examples of liabilities that might appear in a business?

### Tip:
Always ensure that every transaction keeps the accounting equation in balance—this is fundamental to double-entry accounting!

Make a transaction analysis using the accounting equation based on the provided transactions in pesos.

Learn how to analyze business transactions using the accounting equation with step-by-step explanations. The example includes cash investments, credit sales, and purchases in pesos. Suitable for students learning the basics of accounting.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation