Exercises: To practice how the use of debits, credits, and double entry accounting affect individual T accounts and thus The Accounting Formula, consider the following situations. Prepare T accounts as required and write the corresponding accounting formula. 1. Kimchi purchased a small cafe in a town with P600,000 of her own money. Help her prepare her T accounts for her first month of operations using the following information. a. Kimchi invested P600,000 cash in the cafe. Cash Owners Equity b. Kimchi purchased P3,500 in food, all of which is to be paid next month (accounts payable). Food Inventory Accounts Payable c. Kimchi generated P10,000 in revenue, all received in cash. Cash Revenue d. Kimchi paid her employees P3,600 this month with payroll checks (cash account). Cash Salaries and Wages 2. Pita purchased a small roadside inn in April with inheritance money he received from his wealthy aunt. Help him prepare his T accounts for his first month of operations using the information provided. a. Pita invested P5,000,000 cash in the inn. Cash Owners Equity b. Pita purchased a P50,000 point of sale (POS) system with P5,000 cash and P45,000 notes payable. Cash POS system Notes Payable c. Pita generated P75,000 in revenues with P52,000 cash and P23,000 accounts receivable. Cash Accounts Receivable Revenues d. Pita paid utilities of P750 in cash. Cash Utilities Expense 5. Onion Pub opened on 1st April and the following six transactions occurred in its first week of business. Record the transactions in appropriately headed T-accounts for the Pubs manager. a) Owner invested P4,000 in a newly opened bank account for the pub. b) Purchased P5,000 of inventory on account. c) Paid cash P450 for a delivery of potato crisps and salted peanuts. d) Purchased a cash register for P1,000 on credit. e) Banked the first weeks bar takings of P350. f) Determined that the cost of inventory sold in the first week was P150.