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For Activity Numbers 4-6, Refer To The Given Data Below.: December
For Activity Numbers 4-6, Refer To The Given Data Below.: December
a. ₱10,000,000 today; or
b. ₱30,000,000 seven years from now
Which payment will you choose if relevant interest rate is 10%? Explain your choice and support it with a
complete computation.
1. As a future investor, entrepreneur, or a financial analyst, how can you contribute in molding a
strong foundation of financial independence, business opportunities, and career growth to the
society as well as the economy?
2. If you are to invest, what specific type of investment you are going to venture in? Why?
COMPREHENSIVE PROBLEM
The following transactions were completed during December of the year 2019:
DECEMBER
1 Ms. Dina Pinili deposited P832,000 in a bank account for the purpose of buying Metro Sails, a
business offering the use of small sailboats to the public at a large indoor pool with a fan system
that provides wind.
2 Bought Metro Sails for a total price of P2,133,000. The assets include sailboats, P208,000; fan
system, P85,000; pool structure, P1,440,000; land, P400,000. Paid P644,000 down, and signed a
mortgage note for the balance.
3 Received and paid bill for newspaper advertising, P14,800.
3 Received and paid bill for property insurance for 12-months, P10,800.
3 Bought additional boats from DIY Manufacturing Co. for P65,200, paying P32,000 down, with
the remainder due in thirty days.
4 Signed a contract with a vending machine service to lease them space for their vending machines.
The rental income agreed upon is 10% of the sales generated from their machines, with the
estimated total rental income payable in advance. Received estimated cash payment for P3,500.
4 Received bill from PrintMo Printing for promotional handouts, P3,680.
5 Signed a contract for leasing sailboats from Naol Boat Co. and paid rental fee for the year,
P6,320.
5 Paid cash for miscellaneous expenses, P925.
6 Received P26,325 cash as rent for the use of the boats.
8 Bought additional fans on account from ECQ Pool Supply, P8,360.
15 Paid salaries to employees for the period ending December 15, P42,000.
16 Paid the bill for promotional handouts.
16 Pinili withdrew cash for personal use, P10,520.
17 Bought additional sails from SAP Products, Inc., P8,540; payment due in thirty days.
18 Received P30,430 cash for the use of the boats.
19 Paid cash for miscellaneous expenses, P430.
20 Paid cash to DIY Manufacturing Co. as partial payment on account, P4,800.
22 Received P50,820 for boat rentals.
23 Received a reduction in the outstanding bill from DIY Manufacturing Co. for a boat received in a
damaged condition, P4,520.
24 Received and paid telephone bill, P840.
26 Paid cash to ECQ Pool Supply to apply on account, P4,180.
27 Received and paid electric bill, P14,200.
29 Made an installment payment on the mortgage, P18,800. Of this amount, P6,800 represents a
reduction in the principal, and the remainder is interest.
29 Received and paid water bill, P4,320.
30 Bought additional boats from Keng and Cong for P48,520; paying P4,520 down, with the
remainder due in thirty days.
30 Pinili withdrew cash for personal use, P11,560
31 Received P46,320 for boat rentals.
31 Paid salaries for period ending December 31, P46,520.
31 Sales from vending machines for the month amounted to P53,200.
Additional information:
a. Insurance expired during the month, P900.
b. Depreciation of fan system for the month, P1,630.
c. Depreciation of pool structure for the month, P6,000.
d. Depreciation of sailboats for the month, P8,040.