Practice Exercises

Accounting 2 - Senior High School

1. Beginning owner’s equity amounted to P300,000. Net loss for the year totaled P45,000.
No additional investments and withdrawals for the period. Compute for the total
increase in equity for the year,

2. Ending owner’s equity amounted to P70,000. Additional investments during the year
amounted to P30,000. Withdrawals totaled P50,000. Compute for the company’s net
income for the year assuming beginning equity is P10,000.

3. Owner, Juan invested an initial capital amounting P50,000 in order to put up his
janitorial services company. During the first year of Operations (2016), the company
had a loss of P25,000. Because of this, Juan invested additional capital amounting to
P50,000 in 2017. In the secnd year (2017), the company had a net income of P100,000
and Juan withdrew P10,000 for personal use. Compute for the ending capital balance of
Juan for the year 2017.

4. Owner, Juana invested P100,000 to start her laundry business. During the first year of
operations (2016), the company had a net income of P15,000. Juana invested additional
P100,000 to grown the business. In 2017, the business earned P50,000. As of
December 31, 2017, Juana’s capital balance is P200,000. How much is Juana’s
withdrawal?

5. The following balances were retrieved from the records of Juan’s Janitorial Services for
the year ended December 31, 2016.

Capital, January 1, 2016 P 500,000.’

Withdrawals 100,000.
Additional investments 50,000.
Net Loss 45,000

Prepare the Statement of Changes in Equity.

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Practice Exercise – Acctg. 2

Identify which of the following transactions fall under operating, investing and financing
activities:

a. Cash received from customers

b. Cash paid to suppliers
c. Cash paid to employees
d. Cash paid to purchase equipment (company does not sell equipment)
e. Cash received from sale of furniture (company’s main line of business is not related to
furniture)
f. Depreciation expense
g. Sale of goods on credit
h. Purchase of goods on credit
i. Cash received from getting a loan from a bank
j. Cash paid to owners.

Juana’s sari-sari store had the following transactions during the year:

a. Purchase of goods. Paid cash P100,000.

b. Sale of goods. Received cash. 150,000.
c. Paid utilities 30,000.
d. Paid rent 10,000.
e. Sold equipment for cash 100,000.
f. Owner’s withdraws investment 10,000.

a. Compute the net cash flow generated by/used in operating activities.

b. Compute the net cash flow generated by/used in investing activities.
c. Compute the net cash flow generated by/used in financing activities.

Prepare a Cash flow Statement.