Proj

ect PROBLEM:

in Accounts
The comparative pre-closing* adjusted trial balances
of Entity A on December 31, 20x2 are shown below:

20x1 20x2

Gov
Dr./(Cr.) Dr./(Cr.)
Cash-Collecting Officers 30,000 30,000
Cash-Treasury/Agency 290,000 250,000
Dep., Reg.
Accounts Receivable 80,000 120,000

ern
Allowance for Impairment- - (5,000)
A/R
Office Supplies Inventory - 20,000
Buildings 800,000 800,000

men
Accumulated Depreciation- (650,000) (680,000)
Buildings
Office Equipment 340,000 660,000
Accumulated Depreciation- (180,000) (200,000)
Office Equipment

t
Accounts Payable (60,000) (90,000)
Due to BIR (20,000) -
Due to GSIS (4,000) -
Due to Pag-IBIG (2,000) -
Due to PhilHealth (1,000) -

Acc
Accumulated Surplus (160,000) (333,000)
(Deficit)
Tax on Delivery Vans and (40,000) (50,000)
Trucks

ount
Waterworks System Fees (192,000) (240,000)
Subsidy from NG (934,000) (1,167,000)
Salaries and Wages, Regular 303,000 380,000
PERA 16,000 20,000
Office Supplies Expense 104,000 130,000
Submitted to:

ing
Water Expenses 16,000 20,000
Electricity Expenses
Telephone Expenses
Ms. Weddie
48,000
32,000
Mae Villariza60,000
40,000
Janitorial Expenses 64,000 80,000

and
Security Expenses 80,000 100,000
Submitted
Depreciation-Bldgs. and
other Structures by: 24,000 30,000

Depreciation- Machinery Ms. Rosy E. Morados

16,000 20,000
and Equipment

Acc
Impairment Loss- Loans - 5,000
and Receivables
Totals - -

Requirements:
A. Prepare a compartive statement of financial Position showing cross-references to
the notes for the following line items:
1. Receivables
2. Property, Plant and Equipment
3. Inter-agency Payables
B. Prepare a comparative statement of financial performance showing cross-
references to the notes for the following line items:
4. Personnel Services
5. Maintenance and other Operating Expenses
6. Non-cash Expenses
C. Prepare a comparative statement of changes in net assets/equity.
D. Prepare the 20x2 statement of cash flows.
E. Prepare the 20x2 statement of comparison of budget and actual amounts.
F. Prepare a comparative partial notes showing the breakdowns of the cross
referenced line items.
Adjustments:

A. Cash-Treasury/Agency Dep., Reg 1,050,000

Subsidy from NG 1,050,000

Subsidy from NG 43,000

Cash-Treasury/Agency Dep., Reg 43,000

B. Cash-Collecting Officers 50,000

Subsidy from NG 50,000

C. Cash-Treasury/Agency Dep., Reg 240,000

Subsidy from NG 240,000

D. Cash-Treasury/Agency Dep., Reg 140,000

Subsidy from NG 140,000

E. Salaries and Wages 60,000

Due to GSIS 20,000
Due to PhilHealth 20,000
Due to Pag-IBIG 20,000

F. Personnel Services 90,000

Maintenance and Other Operating Expenses 20,000
Purchase of Inventories 10,000
Due to BIR 20,000
Inter-Agency Payable 110,000

G. Office Supplies 20,000

Accounts Payable 20,000
 ENTITY A
ADJUSTED TRIAL BALANCE
DECEMBER 31, 20X2
ACCOUNTS 20X2
Debit Credit
Cash-Collecting Officers 80,000
Cash-Treasury/Agency Dep., Reg. 1,637,000
Accounts Receivable 120,000
Allowance for Impairment-A/R 5000
Office Supplies Inventory 20,000
Buildings 800,000
Accumulated Depreciation-Buildings 680,000
Office Equipment 680,000
Accumulated Depreciation- 200,000
Office Equipment
Accounts Payable 110,000
Due to BIR 20,000
Due to GSIS 20,000
Due to Pag-IBIG 20,000
Due to PhilHealth 20,000
Accumulated Surplus(Deficit) 333,000
Tax on Delivery vans and trucks 50,000
Waterworks System Fees 240,000
Subsidy from NG 2,604,000
Salaries and Wages, Regular 440,000
PERA 20,000
Office Supplies Expense 130,000
Water Expenses 20,000
Electricity Expenses 60,000
Telephone Expenses 40,000
Janitorial Expenses 110,000
Security Expenses 100,000
Depreciation-Bldgs. and 30,000
other Structures
Depreciation- Machinery 20,000
and Equipment
Impairment Loss- Loans 5,000
and Receivables
Personnel Services 90,000
Maintenance and Other Operating 20,000
Expense
Inventory 10,000
Inter-Agency Payable 100,000
 TOTAL 4,402,000 4,402,000

Requirement (a) Comparative Statement of Financial Position

ENTITY A
STATEMENT OF FINANCIAL POSITION
(REGULAR AGENCY FUND)
AS AT DECEMBER 31, 20X2

Notes 20x2 20x1

ASSETS
Current Assets
Cash and Cash Equivalent 30,000 30,000
Receivables 1 115,000 80,000
Inventories 20,000 -
Total Current Assets 165,000 110,000

Noncurrent Assets
Property, Plant and 2 580,000 310,000
Equipment
Total Noncurrent Assets 580,000 310,000
Total Assets 745,000 420,000

LIABILITIES
Inter-Agency payable 3 100,000 -
Others payable 190,000 87,000
Total Liabilities 290,000 87,000

Total Assets Less Total 455,000 333,000

Liabilities

NET ASSETS/EQUITY
Accumulated Surplus 455,000 333,000
(Deficit)
Total Net Asset/Equity 455,000 333,000
Requirement (b) Comparative Statement of Financial Performance

ENTITY A
STATEMENT OF FINANCIAL PERFORMANCE
(REGULAR AGENCY FUND)
FOR THE YEAR ENDED DECEMBER 31, 20X2

Notes 20x2 20x1

REVEUE
Tax revenue 50,000 40,000
Service and Business Income 240,000 192,000
TOTAL REVENUE 290,000 232,000

Less: Current Operating

Expenses
Personnel Services 4 400,000 319,000
Maintenance and other Operating 5 430,000 344,000
Expenses
Non-Cash Expenses 6 55,000 40,000
TOTAL CURRENT 885,000 703,000
OPERATING EXPENSES

Surplus (Deficit) from 595,000 471,000

Current Operations
Net Financial Assistance/ 1,050,000 934,000
Subsidy
Accumulated Surplus (333,000) (160,000)
(Deficit))
Losses (122,000) (303,000)
Surplus (Deficit) for the 595,000 471,000
period
Requirement (c) Comparative Statement of Changes in Net Assets/Equity

ENTITY A
STATEMENT OF CHANGES IN NET ASSETS/EQUITY
(REGULAR AGENCY FUND)
FOR THE YEAR ENDED DECEMBER 31, 20X2
Accumulated Surplus/
(Deficit)
20x2 20x1
Balance at January 1 2,765,000 2,243,000
Add/(Deduct):
Other adjustments 1,723,000 -
Restated Balance 4,488,000 2,243,000
Add/(Deduct):
Changes in Net Assets/
Equity
Surplus(Deficit) For the -333,000 -160,000
Period
Adjustments of net revenue 1,637,000 290,000
Balance at December 31 5,792,000 2,373,000
Requirement (d) Statement of Cash Flow

ENTITY A
STATEMENTS OF CASH FLOWS
(REGULAR AGENCY FUND)
FOR THE YEAR ENDED DECEMBER 31, 20X2

Cash Flows from Operating Activities

Receipt of Notice of Cash Allocation 1,050,00
Collection of Income/Receivables 50,000
Collection of receivables 200,000
Total Cash inflows 1,300,000

Remittance to National Treasury 250,000

Payment of Expenses 830,000
Payment of Accounts Payable 110,000
Total Cash Outflows 1,190,000

Net Cash Provided by Operating Activities 2,490,000

Cash Flows from Investing Activities

Proceeds from Sale/ Disposal of Property, Plant and 1,560,000
Equipment
Receipt of Cash Dividends 1,167,000
Total Inflows 2,727,000

Net Cash Provided by Investing Activities 2,727,000

Increase in cash and cash equivalents 180,000

Cash and cash equivalent, January 1 30,000
Cash and cash equivalent, December 31 210,000
 Requirement (e) Statement of Comparison of budget and actual amounts

ENTITY A
STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
(REGULAR AGENCY FUND)
FOR THE YEAR ENDED DECEMBER 31,20X2
Particulars Budgeted Actual Difference
Amounts Amounts Final
Original Final comparabl Budget and
e Actual
Basis
Notes
RECEIPTS
Tax Revenue 40,000 40,000 50,000 -10,000
Services and Business 260,000 260,000 200,000 60,000
Income
Total Receipts 300,000 300,000 250,000 50,000

PAYMENTS
Personnel Services 420,000 420,000 400,000 20,000
Maintenance and Other 480,000 480,000 450,000 30,000
Operating Expenses
Capital Outlay 300,000 300,000 320,000 -20,000
Total Payments 1,200,000 1,200,000 1,170,000 30,000

NET RECEIPTS/ 1,500,000 1,500,000 1,420,000 80,000

PAYMENTS
Requirement (f) Partial Notes to the financial statements

Note1: Receivable

20x2 20x1
Accounts Receivable 120,000 80,000
Allowance for Impairment - (5,000) -
A/R
Net 115,000 80,000

Note 2: Property, Plant and Equipment

20x2 20x1
Buildings 800,000 800,000
Equipment 660,000 340,000
Total Cost 1,460,000 1,140,000

Accum. Depr.-Buildings 680,000 650,000

Accum. Depr.-Equipment 200,000 180,000
Total Accum. Depr. 880,000 830,000

Total Book Value- 120,000 150,000

Buildings
Total Book Value- 460,000 160,000
Equipment
Total Book Value 580,000 310,000

Note 3: Inter-Agency Payable

20x2 20x1
Personnel Services 90,000 -
Purchase of Inventories 10,000 -
Total 100,000 -

Note 4: Personnel Services

20x2 20x1
 Salaries and Wages 380,000 303,000
PERA 20,000 16,000
Total 400,000 319,000

Note 5: Maintenance and Other Operating Expenses

20x2 20x1
Office Supplies Expense 130,000 104,000
Water Expenses 20,000 16,000
Electricity Expenses 60,000 48,000
Telephone Expenses 40,000 32,000
Janitorial Expenses 80,000 64,000
Security Expenses 100,000 80,000
Total 430,000 344,000

Note 6: Non-Cash Expenses

20x2 20x1
Depreciation-Bldgs. And 30,000 24,000
Other Structures
Depreciation-Machinery 20,000 16,000
and Equipment
Impairment Loss-Loans and 5,000 -
Receivable
Total 55,000 40,000