1.

credit sales (1,250,000 x 75%) = 937,500

sales returns on credit (15,000 x 90%)= ( 13,500)
credit sales (net) = 924,000
times percentage doubtful x 1%
doubtful accounts expense P 9,240

2. Assets = Liabilities + Owner’s Equity Assets = Liabilities + Owner’s Equity

75K = 25K + O.E. 150K = 1.5x + x
O.E = 50K (beginning balance) x = 60 K (ending balance)

O.E., beg. 50,000

Additional investment 25,000 (squeeze)
Withdrawal (40,000)
Net Income 25,000
O.E., end 60,000

3. Total Assets 185,000 NCF from Operating Activities 55,000

Total Non current assets (70,000) NCF from Investing Activities
(10,000)
Total Current assets 115,000 NCF from Financing Activities (9,470)
Total Non-Cash Assets (30,000) increase (decrease) in cash 35,530
Cash Balance, End 85,000 85,000 – 35,530 = 49,470 cash balance,
Beg.

4. Down payment (855,000 invoice price x 10%) 85,500

Remaining balance (net of allowance)
(855,000 x 90% balance -5,000 allowance ) 764,500
100%-3% discount =97% x97% 741,565
Installation & Test Runs 15,000
Cost of rewiring 2,500
Insurance while in transit 3,000
Acquisition Cost 847,565

5. Invoice Price (50,000 x 98% x 99%) 48,510

100% - 2% discount = 98% x98% 47,539.80
Partial Payment (10,000.00)
37,539.80
Freight paid by seller 600.00
Amount to be paid by Wiseman Trading 38,139.80

6. Purchase 10,000
Purchase Return (1,000)
Net Purchases 9,000 x 2% = 180

7. Beginning Capital 170,000

Additional Investment 35,000
 Withdrawal (5,000)
Expenses paid using personal account 15,000
Ending Capital 215,000
8. Annual Depreciation of Office Equipment =450,000 x 90% / 10 = P40,500
Accumulated Depreciation, end 193,550
Depreciation Expense - Office Equipment ( 40,500)
Accumulated Depreciation,beg. - Office Eqpt. (126,800)
Depreciation Expense – Computer 26,250
Divided by 5/12 months
Annual Depreciation Expense – Computer 63,000
Acquisition Cost = 63,000 annual dep. X 10 yrs. / 0.90 = P700,000

9. Merchandise Inventory, Beg. 450,000

Purchases 1,400,000
Transportation In 10,000
Merchandise Inventory, End (25,000)
Cost of goods sold 1,835,000
x 150%
Sales 2,752,500
Collection from customer w/o disc. (1,312,400)
Collection from customer w disc. (1,352,400/ 98%) (1,380,000)
Accounts Receivable, End P 60,100

10. Mr. Lim required investment = P125,000(ms. Angel investment)/1/3x2/3 =P250,000

Cash 8,000
Accounts Receivable 50,000
Allowance for B.Debts (5,000)
Merchandise Inventory 100,000
Furniture & Fixtures 60,000
213,000 250,000-213,000=P37,000 additional cash

11. Summary of payment:

Repair of Computer 384
Supplies Expense 1,200
Restaurant bill for a client 1,070
Net income overstated 2,654

12. Cash balance per bank 35,500

Deposit in Transit 10,250
Outstanding Checks (3,250)
Correct Cash Balance P42,500

13. Share capital 2,500,000

Share Premium 270,000
Accumulated Profits-free 750,000
Appropriated for Contingencies 500,000
 Subscriptions Receivable (20,000)
Total 4,000,000 /25,000 shares = P160 BV/sh

14. Net Income 575,000

less: Share of Preference in NI:
Pref. Sh. Capital 450,000
Subs. Pref. Sh. 200,000
Treasury Share ( 15,000)
Total 635,000
Times x 8% (50,800)
Available for Ordinary shares 524,200 / 6,000 shares = P87.37

15. P1,575,000 / P5 = 315,000 shares

315,000 shares / 900,000 shares = 35%

16.
Assets Liabilities Owner’s Equity
Cash Non-Cash Acc. Payable M.,loan M (50%) G (30%) E (20%)
22,500 322,125 75,000 37,500 82,500 93,375 56,250
(37,500) 37,500
22,500 322,125 75,000 - 120,000 93,375 56,250
232,125 (322,125) (45,000) (27,000) (18,000)
254,625 - 75,000 75,000 66,375 38,250
(75,000) (75,000)
179,625 - 75,000 66,375 38,250

17. Cash Priority Program:

Perry Carl Ang
Capital Balance 10,000 45,000 50,000
Share in NI 24,000 14,400 9,600
34,000 59,400 59,600
Perry, Loan 8,000
Total 42,000 59,400 59,600
Share in loss of sale in non-cash asset (15,000) (9,000) (6,000)
27,000 50,400 53,600
Divided by 50% 30% 20%
54,000 168,000 268,000
(100,000) x 20% = 20,000
54,000 168,000 168,000
(114,000) (114,000) 114k x20% = 22,800
54,000 54,000 54,000 114k x 30% = 34,200
Cash, beg. 50,000
Sale of Non cash asset 90,000
Total 140,000
Payment to creditors (99,000)
Total cash available 41,000
1st 20k for Ang (20,000)
21,000 x 3/5 for Carl = 12,600
x 2/5 for Ang = 8,400