TEST 1:

1. The initial investment of the owner in his business is P75,000. At the end of the year, the total assets of the business amounted to P100,000, consists of P50,000 cash and P50,000 equipment. The equipment has unpaid balance of P20,000, the only liability of the business. How much is the owners' equity at the end of the year?

2. The total cash payments made by the business for the period amounted to P100,000 as follows: Purchase of equipment for business use, P50,000; Salaries of the employees, P35,000; Water and electric used in business, P10,000; Taxes and licenses of the business, P5,000. How much is the total operating expense from these payments?

3. The owner of the business reported the following expenses for the period: Salaries of business employees, P5,000; Salaries of house help in the owner's residence, P3,000; Cleaning supplies consumed in the conduct of business, P1,000; and Cleaning supplies used in the owner's family car, P500. How much is the total business expenses deductible from business income to determine the business profit or loss?

4. At the start of the year, the owner of the business contributed P75,000 as its initial capital. The following is the summary of transactions during the year. Purchased supplies for cash, P30,000; Purchased equipment amounting to P80,000, 25% down payment and the balance on account; Services rendered for cash, P60,000; Paid electric bill, P5,000; and Services rendered on account, P3,000. Determine the cash balance at the end of the period.

5. At the start of the year, the total assets of the business are P150,000, and its liabilities were P50,000. At the end of the year, the total assets are valued at P220,000, and the residual claim of the owner is P150,000. How much is the liabilities to the creditors at the end of the year?

TEST 2: